Modern Mining May 2025

COVER STORY

In today's challenging resource sector environment, junior mining companies face an increasingly complex path from discovery to production.

In today’s challenging resource sector environment, junior mining companies face an increasingly complex path from discovery to production. The success of mining projects hinges on three interconnected factors: fundability, bankability, and buildability. Understanding and effectively addressing these elements has become essential for junior miners seeking to advance their projects through the project development cycle and delivery pipeline. The critical triad: fundability, bankability, and buildability for junior mining projects By Spencer Eckstein – Director, Ukwazi

Fundability: the gateway to development Fundability represents a project’s ability to attract investment capital at various stages of development. For junior miners, this typically begins with equity financing and potentially evolves to include strategic partnerships, royalty agreements, and eventually, debt financing. “Farm-in” agreements are also common in the industry, particularly where a junior partners with a major to fund exploration in exchange for an increased equity stake in the project. Recent industry data shows that only approximately 1 in 10 exploration projects secure adequate funding to reach the feasibility study stage. This funding gap has widened as institutional investors increasingly demand stronger environmental, social, and governance (ESG) credentials alongside traditional financial metrics. The bar for fundability has been raised significantly. Junior miners must now demonstrate not just geological potential but also clear pathways to permitting, community support, and environmental compliance to attract investment capital.

Bankability: from concept to financeable reality Bankability takes fundability to the next level, focusing on an owner’s team and project’s ability to secure project finance from banks and institutional lenders. This typically requires a definitive feasibility study that demonstrates robust economics across various commodity price scenarios. Key bankability factors include: • A clear, well-constructed public report that contains the information which stakeholders, interested parties, investors and their professional advisers would reasonably require, and reasonably expect to find for the purpose of making of a reasoned and balanced judgment regarding the investment in the project • Code compliant Mineral Resources and Mineral/ Ore Reserves • Reasonable prospects of eventual economical extraction • Technical feasibility with proven technology • Realistic capital and operating cost estimates and financial performance metrics, based on appropriate modifying factors

6  MODERN MINING  www.modernminingmagazine.co.za | MAY 2025