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Asia sees promising mining prospects following commodity downturn

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Global Mining Review,

A resurgence in international precious, base and battery metals exploration and development investment activity that has Asian finance channels coursing is giving a leading international mining consulting firm good reasons to celebrate the five year anniversary of its Hong Kong office.

SRK Consulting’s Hong Kong General Manager and Principal Geologist Dr Gavin Chan says the global firm is increasingly optimistic about prospects in the region as the mining industry continues to emerge from a protracted downturn.

As China’s US$12 trillion economy matures and spurs new demand for a wide range of commodities, the global mining industry is seeing renewed investment, and stronger pricing signals. Chan says new exploration and development opportunities are emerging in China and other Asian countries.

“Hong Kong was chosen to service both the Chinese and international finance sectors, Hong Kong-listed companies and state-owned enterprises,” Chan reflected on the opening of SRK’s seventh office in Asia, and 50th globally.

“With Hong Kong regarded as the first stop for Chinese outbound capital and a springboard to world markets, it is one of the world’s leading financial hubs.

“The first five years haven’t been all smooth sailing as major corrections of commodity prices resulted in a sharp decline of fundraising activities through equity and debt markets, and less mining activity in recent years. But that is certainly changing and regional project fundraising activity, not only in China, but also in North and southeast Asia, is picking up.”

Chan says SRK Hong Kong is seeing increased activity around technical due diligence, public reporting for capital raisings, mergers and acquisitions (M&A) and initial public offerings (IPOs).

“We are seeing requests for these services in a number of countries across a range of commodities including gold, copper, iron ore and coal, as well as battery minerals,” he said.

While gold remains the dominant commodity, there is also activity in the battery minerals space, including lithium, cobalt, nickel and graphite.

Recent work includes a resource estimation and valuation of a gold project located in northwest China; sampling support and resource estimation of a lead-zinc project in inner Mongolia, and a polymetallic (mainly tin and tungsten) also in Mongolia; and a resource estimation of a lithium hard rock project (lepidolite) in China. The company has also been involved with an underground gold feasibility study in Indonesia, as well as several lithium review projects for Chinese clients.

The provision of technical support for mine financing has always been a strength of SRK’s professionals. This includes support for new listings, maintaining existing listings and bank financing, as well as assurance services for companies contemplating mergers and acquisitions.

SRK Hong Kong’s sister practices in Australia are also actively working in the region, primarily in technical support roles.

Recent collaborative work included mine design for a limestone project in Malaysia, and a copper-gold project in Laos, and lead-zinc exploration and resource support work in Indonesia.

Major Japanese corporations are also seeking SRK’s expertise for their technical due diligence and assessment of investments into natural resources opportunities, Chan says.

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Asian mining news