Development, Exploration and Trading

In 2006, a small junior mining company with a market cap of AU$15 million (around US$9.7 million) was able to raise US$350 million in equity markets and later be acquired for US$1.35 billion by Equinox Minerals, which was subsequently acquired by Barrick Gold. This gave the mining giant complete control over Jabal Sayid, the now-operating copper mine under the joint venture with Ma’aden (Ma’aden Barrick Copper Company).

That is how Inés Scotland, executive chair of Metal Bank, shared the story of Citadel Resources, that small junior. "It is easy to look at the result, but the journey involved countless steps and extensive groundwork over five years," she said.

Before diving into the past, it is better to start by mentioning that Inés Scotland, along with the team that advanced the Jabal Sayid project, is reentering Saudi Arabia with a new strategy after applying for and winning an exploration license for the Wadi Al Junah site in Aseer, which contains copper, zinc, silver and gold. This was part of the sixth round, announced by the Ministry of Industry and Mineral Resources in November 2024.

Much has been written so far about Vision 2030, and much more will be written about the Saudi government’s support for the sector in the following pages. However, Scotland’s experience serves as a benchmark for assessing how the industry was back then and how it is today.

According to the executive director of this Australian-based company, when they first entered Saudi Arabia through Citadel Resources, Ma’aden was the only active mining company, with four operating mines. Today, it has seven. The government was also different back then, as a deputy ministry handled mineral resources under a larger petroleum ministry. Despite the differences between then and now, Scotland still maintains that they saw the commitment we all hear about today, having allowed the company to complete drilling and pre-feasibility and feasibility studies in just five years: “Today, things are very different, with the government offering incentives up to roughly US$1.5 million per 100 m2, which make it financially viable to test deeper IOCG-style deposits that could lie 300 m or more below the surface. These deep holes are high risk and also very costly […]. Such support is transformative, especially for deep drilling in the Arabian Shield, which has little exploration below 100 m,” she added.

This incentive mentioned by Scotland is part of the governmental Exploration Enablement Program (EEP), an initiative launched in April 2024 to boost mineral exploration. The EEP is a bi-ministerial program managed by the Ministry of Industry and Mineral Resources and the Ministry of Investment. It promises to provide access to SAR 685 million (around US$182 million) in incentives to stimulate mineral exploration activities in "strategic and critical minerals, improve geological knowledge, identify new frontiers of mineral potential in greenfield areas, and expand the capabilities of local talent." To apply for the EEP, companies must hold an active exploration license for Class A minerals under the new Mining Investment Law, focus on greenfield exploration sites, and run the program from 2024 to 2030. It will finance up to 25% of approved exploration costs, with a cap of SAR 4 million (US$1.06 million) and additional labor funding of up to SAR 3 million (US$800,000).

Alan Davies, CEO of Moxico Resources, also commented on how the Saudi government has been a “tremendous ally” with programs like the EEP, which have been of “much help.”

Moxico jumped from Zambia, a jurisdiction where they brought the Mimbula copper mine into production and are currently ramping up operations, to partner with local Ajlan & Bros and become one of the first companies to participate in the bidding rounds organized by the ministry. In 2022, they won the bid for the Khnaiguiyah zinc-copper project. “As we prepare to initiate the construction phase, we are in advanced discussions with the Saudi Industrial Development Fund (SIDF) to secure the final funding package. We are just awaiting the final signoffs from the expert panel advising the SIDF, with expectations to close this financing in the first half of 2025. Once the full financing package is secured, we will move into construction of the main plant a zinc and copper concentrator that will pro-duce concentrates for both metals,” added Davies. The missing piece: An incubator for Saudi Arabia’s junior market

While we can say that Saudi Arabia might hold the title of "the capital of the Super Region," we can be sure that Toronto is the capital of the junior world because it is home to the TMX and the TSX-V, where juniors can raise capital, grow and, eventually “graduate” to the TSX, the senior market. “Over 300 mining companies listed on TSX began as juniors, a feat few other markets can match. Even with challenging equity conditions, miners raised CAD8.5 billion in the first nine months of 2024, including CAD5 billion from junior companies alone. These companies operate not just in Canada but across Latin America, Africa Australia and other key jurisdictions,” commented Graham Dallas, head of business development, Europe, Middle East and Africa, Toronto Stock Exchange and TSX Venture Exchange.

In October 2024, the Minister of Industry and Mineral Resources Bandar Ibrahim Alkhorayef met with TMX CEO John McKenzie and TMX President Louis Anastasopoulos to discuss opportunities for cooperation. One of the key points the Saudi junior segment hoped they would address was the establishment of a local junior market. “While financing options are improving, there is still room for growth, such as the potential establishment of a junior stock exchange. Listing on the Saudi exchange poses challenges for junior explorers due to requirements like three years of profitability, which is often not feasible for asset-focused companies like ours,” explained Sean Wade, CEO of Power Metal Resources, an exploration-incubator exploring in KSA under its local subsidiary Power Arabia.

In fact, there is always room for improvement in any jurisdiction. In the case of KSA, Power Metal views the situation as an “incredible opportunity for foreign investment,” particularly after signing an MoU with the Ministry of Investment nearly a year ago. “We have received outstanding support from the government, which has facilitated key introductions and helped us navigate local processes efficiently. Strong government relations are crucial in any country, but they are significant in KSA, given the focus on Vision 2030, with mining positioned as the third pillar of the economy,” he added.

It seems that the lack of a local junior market is offset by governmental support. That is what John Webster, CEO of Gold and Minerals, told GBR. The company, which operates out of Bisha, is developing the Jibal Qutman gold project, which is close to being "production ready," as Webster stated, and the Hawiah deposit, a larger site that holds gold, copper, silver and zinc.

When he was asked how his job as a CEO differed in Saudi Arabia compared to more mature mining jurisdictions, at least on the financing side, he responded that his experience in Canada showed him how the cyclicality of the market is supported by mechanisms like flow-through financing: “Therefore government incentives, like SIDF, are critical here. They help offset the lack of established equity financing options,” he commented, adding: "If a project meets international and bankable feasibility standards, SIDF can provide loans at competitive interest rates, covering up to 75% of the project value a level of support virtually unheard of elsewhere. I have spent over 40 years in the mining industry and led companies since the mid-90s, and I have had to be focused extensively on fundraising. Here, my job is primarily focused on rapid project development optimization and development of in-house skills."