Video: Debt fuels takeover bids for juniors, SCP chair says

Mining companies are returning to debt after years of banks stepping back, SCP Resource Finance chair Peter Grosskopf says in a video interview.

Banks, public bond underwriters and convertible-debt investors are competing with specialist lenders. They are trying to fill a funding gap that appeared when major banks reduced their junior financing, the market doyen said during the recent Rule Symposium on Resource Investment.

“Credit sources are much broader today,” Grosskopf told The Northern Miner’s western editor, Henry Lazenby, earlier this month in Boca Raton, Fla.

SCP Resource Finance now fields more project‑finance and equity‑finance mandates than ever, Grosskopf said. He recalled that during his 12-year tenure leading Sprott Lending until 2022, “we had to fill that gap as best we could.”

Equity issues remain out of favour. Junior share prices continue to trade below net asset values, prompting developers to weigh debt options instead of issuing fresh stock.

“Equity is still the short man at the party,” Grosskopf said, adding that companies now juggle bank loans, public debt and convertibles to secure optimal terms.

Grosskopf sees this debt revival as more than a stopgap. He predicts majors will combine low‑cost internal projects with bolt‑on acquisitions financed through a mix of debt and equity. That, he says, could unlock takeover bids for undervalued juniors.

Watch below the full interview: