Financings

How mining companies raise money

A company you follow just announced a financing. Here is what the different kinds mean for shareholders, and how to read the news release.

Why juniors raise money so often

Most exploration companies have no revenue. Every drill program, survey and camp season is paid for by selling something: new shares, a share of the project, or a share of future production. Each choice has a cost to existing shareholders.

Sell sharesFast and common. The cost is dilution: your slice of the company gets smaller.

Sell part of the projectA partner pays to earn a stake. Fewer new shares, but the company owns less of the asset.

Borrow or pre-sell productionLoans, royalties and streams. No dilution up front, but a claim on future cash or metal.

Exploration: finding the deposit

Small, frequent raises, mostly from selling shares. This is where most BC and Yukon juniors are.

Private placement

The company sells new shares, often as units with warrants, directly to chosen investors without a full prospectus.

In a release, look for: "non-brokered" or "brokered private placement", "units", "gross proceeds".
For shareholders: More shares on issue. The new shares usually cannot be resold for four months and a day.
Watch for: The price compared with the recent market price, and whether insiders are buying.

Example on BCYM: Giga Metals private placement »

Flow-through shares

Investors pay for shares and the company spends the money on eligible Canadian exploration. The company "renounces" those expenses so investors can deduct them. Individuals may also claim a 15% federal credit (30% for critical minerals) and, for BC exploration, a 20% BC credit.

In a release, look for: "flow-through units", "Canadian exploration expenses", "critical mineral".
For shareholders: The money has to go into the ground in Canada, not office costs. Flow-through investors often pay a premium over the market price.
Watch for: Some flow-through buyers sell once their hold period ends, which can weigh on the share price.

Example on BCYM: Red Canyon flow-through financing »

LIFE offering

The listed issuer financing exemption lets listed companies sell shares to the public without a full prospectus, within set limits. Shares are free to trade right away.

In a release, look for: "LIFE offering", "listed issuer financing exemption", "offering document".
For shareholders: No hold period, so new shares can be sold immediately.
Watch for: The size of the raise against the company's market value.

Example on BCYM: Goldstorm Metals LIFE offering »

Warrant exercise

Investors who hold warrants from an earlier financing pay the set price to turn them into shares.

In a release, look for: "warrants exercised", "proceeds from the exercise", "acceleration".
For shareholders: More shares, but often a sign the share price is above the warrant price.
Watch for: An "acceleration" notice that shortens the time warrant holders have to exercise.

Shares for debt

The company pays a bill, often owed to insiders, contractors or consultants, with shares instead of cash.

In a release, look for: "shares for debt", "debt settlement".
For shareholders: Saves cash, but adds shares.
Watch for: Who is owed the money and the price per share used.

Option or earn-in deal

A partner earns a stake in a property by spending on exploration or making payments over several years.

In a release, look for: "option agreement", "earn-in", "exclusive option to acquire".
For shareholders: Little or no dilution, but the company gives up part of the project if the partner completes the deal.
Watch for: How much the partner must spend, by when, and what share it ends up with.

Example on BCYM: Apex Resources option to ReOsiris »

Development: proving and building the mine

Bigger cheques: studies, permits and construction. More partners and more complex deals.

Public offering and bought deal

Shares sold to the public under a prospectus, usually through investment dealers. In a bought deal, the dealers agree to buy the whole issue at a fixed price and resell it.

In a release, look for: "bought deal", "underwriters", "over-allotment option", "prospectus".
For shareholders: Larger dilution, usually at a discount to the market price.
Watch for: The discount, and whether the dealers can buy extra shares (the over-allotment option).

Rights offering

Every existing shareholder gets rights to buy new shares, usually at a discount, in proportion to what they already own.

In a release, look for: "rights offering", "record date", "standby commitment".
For shareholders: Take up your rights or your share of the company shrinks. Rights can sometimes be sold.
Watch for: The deadline, and who has agreed to buy any shares left over.

Strategic investment

A major miner, royalty company or other industry player buys a block of shares.

In a release, look for: "strategic investment", "investor rights agreement", "participation right".
For shareholders: Dilution, but often seen as a vote of confidence.
Watch for: Board seats and rights to keep its percentage in future financings.

Example on BCYM: Banyan Gold and Franco-Nevada »

Convertible debt

A loan that the lender can turn into shares at a set price.

In a release, look for: "convertible debenture", "conversion price", "maturity".
For shareholders: Interest now, possible dilution later.
Watch for: The conversion price, the interest rate and when it must be repaid.

Royalty financing

The company sells a percentage of future revenue from the mine, usually a net smelter return (NSR) royalty, for cash today.

In a release, look for: "NSR royalty", "buyback right".
For shareholders: No new shares, but a permanent slice of future revenue goes to someone else.
Watch for: The royalty percentage and whether the company can buy part of it back.

Streaming agreement

A buyer pays cash up front for the right to buy part of the mine's future metal, often a by-product, at a low fixed price.

In a release, look for: "stream", "deposit", "ongoing payment per ounce".
For shareholders: No new shares, but part of future metal is sold at a discount.
Watch for: The share of metal, the ongoing price and how long the stream lasts.

Production: running the mine

With cash flow, companies can borrow and sell output in advance.

Debt and project financing

Loans, credit lines or bonds, repaid from mine cash flow.

In a release, look for: "credit facility", "senior secured notes", "project finance".
For shareholders: No dilution, but lenders get paid first if things go wrong.
Watch for: The interest rate, conditions on the loan, and any requirement to hedge metal prices.

Example on BCYM: Skeena US$750 million notes »

Offtake-linked financing

A smelter or metals trader lends money or invests in exchange for the right to buy the mine's concentrate.

In a release, look for: "offtake agreement", "prepayment".
For shareholders: Secures a buyer and funding, but locks in who the product is sold to.
Watch for: Pricing terms and how long the offtake lasts.

Joint venture or stake sale

The company sells part of the project to a partner who then pays its share of costs.

In a release, look for: "joint venture", "sale of a % interest".
For shareholders: Cash in and less spending, but a smaller share of the mine.
Watch for: The price per percentage point and who runs the operation.

How to read a financing release

A real example: Red Canyon Resources' flow-through financing, announced October 1, 2026. Each line is the release in plain words, with what it means.

1A proposed non-brokered flow-through private placement.

No dealer leads the deal; the company finds its own buyers. "Proposed" means it has not closed yet.

2Up to 5,000,000 flow-through units at $0.20 each, for up to $1,000,000.

"Up to" is a ceiling. Check the closing news release for what was actually raised.

3Each unit is one flow-through share plus one-half of a warrant.

Two units give you one whole warrant.

4Each whole warrant buys one more share at $0.30 for 18 months.

If the shares trade above $0.30, warrant holders may exercise, which brings in more money and more shares.

5Money goes to eligible Canadian exploration expenses that qualify as critical mineral expenditures.

This is what makes the federal 30% credit available to individual investors, plus a 20% BC credit for BC residents.

6All securities have a statutory hold period of four months and one day.

Buyers cannot sell until the hold ends.

7Finders' fees may be paid under Canadian Securities Exchange policies.

Some of the money may go to people who bring in investors.

8Closing needs CSE approval. Directors and officers may buy units, a related party transaction.

Insiders buying is worth noting; the rules require it to be disclosed.

Our story on the Red Canyon financing »The full release on TheNewswire ↗

Glossary

Terms you will see in financing releases.

Unit: A package sold in a financing, usually one share plus a warrant or part of a warrant.
Warrant: The right to buy another share at a set price before a set date.
Hold period: Time during which newly issued shares cannot be resold. Four months and a day is the usual period for private placements.
Gross proceeds: The total raised before fees and costs.
Brokered / non-brokered: Whether an investment dealer runs the sale (brokered) or the company sells the shares itself (non-brokered).
Finder's fee: Cash or warrants paid to someone who introduces investors.
Flow-through premium: The extra a buyer pays for a flow-through share over a regular share, because of the tax benefits.
Dilution: The drop in each existing shareholder's percentage when new shares are issued.
Related party transaction: A deal involving insiders such as directors or officers. It has extra disclosure rules.
Over-allotment option: Lets dealers sell extra shares, often up to 15% more, if demand is strong.
NSR royalty: Net smelter return royalty: a percentage of the mine's revenue after smelting and transport costs.
Tranche: One closing of a financing that closes in stages.