"The consolidation of the brokerage industry has meant a reduction in retail investment. Whilst investment in junior mining stocks used to be commonplace, that it is no longer the case. Investment specialized in mining attracts people within the industry and those with specialized knowledge, not the wider public. The boutique brokerage firms that specialize in mining dominate the capital markets."

Denis S. Frawley

PARTNER, ORMSTON LIST FRAWLEY LLP

May 20, 2020

Which mining-related projects of interest has Ormston List Frawley LLP been involved in in the last 12 months?

An important client of Ormston List Frawley is Noble Minerals. We are assisting them on matters related to a large property they own of more than 50,000 hectares in Northern Ontario. The results from canvassing in this property show that there is a large nickel ore deposit that merits further exploration.

Their model is to work in partnership with other exploration companies. One of Noble’s strategies is to be a project generator because this allows them to leverage the potential of their resources. The project has several advantages because it is in a mining-friendly part of the province and there is already a lot of existing infrastructure.

The current agenda is to consolidate ownership of the property. At the moment, it is partially owned by Noble but there is another public company that has an earn-in right. The idea is to take that project and spin it out into a separate public company. That takes time and there are a number of steps involved. There is money being raised directly and new management coming up. It is coming to fruition.

Can you expand on how changes to the Canadian Securities Laws have impacted the regulatory framework in Ontario?

The regulator is moving to a model where data collection is prioritized. The reporting of extra information has made transactions longer and more complex. Additionally, Canada has the oddity of having many security jurisdictions; each province has its own set of regulations. Often there are many similarities and regulations across provinces can be harmonized. However, increasingly we are seeing more exceptions and this has complicated compliance. Nevertheless, the Regulation Commission has announced that they are looking for ways to reduce the regulatory burden.

Despite favorable precious metals prices, the junior mining sector is still struggling to raise capital. Do you think the equity markets have changed?

The consolidation of the brokerage industry has meant a reduction in retail investment. Whilst investment in junior mining stocks used to be commonplace, that it is no longer the case. Investment specialized in mining attracts people within the industry and those with specialized knowledge, not the wider public. The boutique brokerage firms that specialize in mining dominate the capital markets. 

To what extent do federal elections impact the country’s mining climate?

Regardless of which political party in Canada, the transition is relatively smooth for mining and there is rarely a dramatic impact. I do not think the general electorate is that interested in minerals; a more relevant issue for them is oil and gas because of the pipelines. Mining is not viewed as being that closely related to climate change and therefore it does not have that dynamic, however, this may change in the future when the general public realizes how important strategic minerals are for technologies such as electric vehicles. Mining in Canada is more of provincial responsibility.

What type of mining clients does Ormston List Frawley work with, and what can the firm offer them?

Ormston List Frawley works with junior and exploration-stage mining companies. Our lawyers recognize that business and legal needs in the mining space are distinct from those of other industries, especially for small to mid-cap companies. We understand that they need legal counseling that is affordable, quick, relevant and convenient. In addition to this, we are also able to fulfill many of the back-office functions related to documentation and permitting that companies without their own legal departments cannot fulfill alone.

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