CMP raises $80 million

Masse’s view is based on CMP’s experience with its first fund closing earlier this year, which raised $80 million. He feels that total flow- through financing this year will range between $200-$250 million with the strong possibility that even this might be optimistic.

Part of the government’s forecast is based, Masse says, on the expectation that major mining companies would use more flow- through this year. “But these are companies in cash flow and making profits. They don’t need us anymore,” Masse said, explaining why companies with earnings are reluctant to give up future tax exemptions.

Although the initial CMP offering netted only $80 million, Masse says the fund will make another offering later in the year. The second offering will seek to raise between $50 million and $100 million, he added.

Investing in a bear market is no easy task. A majority of this year’s funds will be placed in highly capitalized, liquid mining company shares. The fund is committed to placing a minimum of 30% of its cash into companies with a market capitalization exceeding $65 million. “I’ll beat that this year,” Masse added.

Less than 45% will likely find its way into the treasuries of companies with market capitalizations of less than $20 million. “We want a liquid portfolio. As a result we’re heavily invested in the majors.”

Another result of the downturn, especially in gold, is that this year’s portfolio will reduce its exposure to gold stocks. Whereas in past years 75% was invested in golds, only 60% will seek out gold shares this year. For the first time, 12% will go into oil and gas companies. The remaining will be invested in the shares of base metal companies.

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