Private funding is very difficult to access for exploration, and the best source of private capital for exploration is probably from high-net-worth career mining explorers or from mining operators that are looking to outsource exploration. Mexico is fortunate in that it has five or six private individuals who are themselves eager participants in the Mexican exploration industry. This is something even the Mexican industry does not understand about itself. The fact that national investors are eager to fund these projects gives foreign investors like ourselves some confidence.

In mining and mineral exploration, investors come from everywhere. There is a strong European appetite to invest in exploration companies in the Americas, so we have to be listed on their stock exchanges to make it easier for their nationals to participate in financing our projects. Our companies are listed on the TSX Venture Exchange, as well as the OTC-QB and Frankfurt Exchanges. Also, Southern Silver Exploration is listed on the Santiago Stock Exchange (BVS), which provided some ability to invest for Mexican investors. The TSX asked us to co-list on the BVS in Chile to benefit Mexican investors. We have not yet pursued a listing on the BVM, but we would be happy to consider doing so.

There is some nervousness about the upcoming political changes but overall, I think the climate is good. When speaking to the institutions that understand the industry, there should be no trouble getting financing. For us, FIFOMI’s funding has been sufficient and has helped us with our working capital, but there are always complaints about the level of funding being constrained. I think a big company that is looking for much more financing may feel it is not enough. That being said, there are always alternative funding options available. There are different opportunities, including private equity, which funds a lot of strong, early-stage projects. There is also access to the TSX or other exchanges, such as the Venture exchange. There are many listed mining companies and they have access to public markets. Some companies will finance via a stream or off-taker agreement. The opportunities definitely exist.

A group of investors, including myself, have acquired a stake in Accendo Banco, (formerly Investabank) and through this entity we have acquired Deutsche Bank Mexico, which will be merged into our bank. Within Accendo Banco, there will be a niche whereby we will focus on the mining sector in Mexico. We will provide typical mezzanine debt financing in Mexico, for projects in the development and production stages rather than exploration. This is not new to us, as we have done it before with mining companies in Mexico and Ecuador. But now we will be more proactively seeking to finance companies domesticallythat are worth investing in.

This 10-year global mining industry crisis has translated into very limited financing for mining companies, particularly for small to medium sized companies. Mexico, being one of the richest natural resources countries, does not have a bank that supports the sector. This crisis has presented us a unique opportunity to provide financing throughout the whole mining spectrum. We are the only Mexican bank that actively serves the mining industry. We serve the mining companies, as well as the whole supply chain, such as mining industry service provides, like drillers, contractors, and reagent producers, to name a few. Mining is one of the most important sectors that Accendo Banco targets with the aforementioned bespoke products.

The sector has a great deal of potential in Mexico simply because of the geological wealth of the country. We have a few mining companies listed on the BMV, but not enough. The mining sector represents 4 percent of the country’s GDP and there are many mining companies working in the country, but we have only four companies listed on the BMV: Peñoles, Grupo México, Autlán and Minera Frisco. These companies are able to take advantage of the BMV through different products since we do not exclusively focus on the stock market. In Mexico, there needs to be a greater diffusion of knowledge in terms of the benefits and the processes for listing on the BMV. The problem is that many companies that require financing to grow or to carry out their expansion plans are not familiar with the BMV or its products or requirements.

One of the biggest challenges we face is creating a more democratic access to finance. We are focused on strengthening our role as an intermediary between the Mexican mining industry, mining companies and financial institutions. We find that we can better meet the needs of the sector if we join forces with the financial industry to provide mining companies with a wider variety of financing options. Banks like the Industrial and Commercial Bank of China have contacted us in international forums with the purpose of connecting more of their investors with Mexico. Investors and international banks often contact us because they know that we can ease their entrance to the country and connect them with the right companies. In any given project we can offer a credit line of up to the maximum limit but, by collaborating with other banks, we can provide several times that amount.