February 2011

International finance conference in China looks to the East

Canadian financial heavyweights evaluate opportunities in Asia

By Genny Griffiths

China-conference 

Speakers and organizers from the conference, from left to right: David Mcintyre (Gowlings), Gill Peng (CIMG), Andre Gauthier (Lara Exploration), Keith Spence (Global Mining Capital Corp. and conference chairman), Joe Hinzer (Watts, Griffis and McOuat),  Pat Mohr (Scotia Capital Markets), Marc Parisien (Canadian Embassy in Beijing), Luke Evans (Scott Wilson RPA), and Mike Samis (Ernst and Young) | Photo courtesy of Keith Spence and Gill Peng


As 2010 came to a close, some of Canada’s top mining finance experts gathered in Beijing for a look into the industry’s future at the inaugural International Mining Finance and Capital Markets Conference. Organized by CIM in cooperation with the China International Mining Group, the conference followed in the footsteps of successful Mining Finance days at CIM’s Conference & Exhibitions for the past two years, attracting approximately 100 attendees to the China World Summit Wing Hotel on November 19.

Keith Spence, president and partner of Global Mining Capital Corporation and an organizer of the event, called Beijing “a natural fit.” As the world’s biggest consumer of metals and minerals and one of its foremost and fastest growing international mining investors, China has grabbed the attention of the global mining industry.

“China is quickly becoming the dominant force in the global and Canadian mining and metals business,”co-organizer and CIM president Chris Twigge-Molecey said of the choice of country. “We need to build bridges to enhance the understanding and opportunities for our members.”

In recent years, China has invested vast sums in mines around the world, with an emphasis on Australia, Africa and South America. Although Twigge-Molecey puts the country’s investment in Canada at over $5 billion per year, he expects a surge in coming years as China finally taps into the extensive mining opportunities in Canada.

The inaugural conference featured a dozen speakers, discussing topics such as capital markets, mine financing, valuation, risk analysis and regulatory environment. The conference’s focus on mining finance and the popularity of topics like “Methods of Valuation for the Development Stage of Mining Projects — Use of Real Options” reflects China’s interest in a part of the mining process that Spence says Canada is “very, very good at.” He sees the development of mining finance in China, with the help of Canadian expertise, as an important collaboration between the two countries in coming years.

The conference was divided into four sessions. The early morning session dealt with an overview of mining capital markets with presentations from Egizio Bianchini, managing director and head of mining, BMO Capital Markets, and Patricia Mohr, vice-president and commodities strategist at Scotia Capital. The mid-morning session delved into the world of mining finance. The keynote address was given by Christine Lie, vice-president, issuer marketing department of the Hong Kong Stock Exchange. The afternoon session was devoted to mining valuation methods and risk analysis.

Joe Hinzer, president of geological consulting firm Watts, Griffis and McOuat and another conference organizer, called the event “an outstanding success” and said it would lay the groundwork for similar events in emerging markets around the world.

Although the conference was a success, it very nearly did not happen at all. It was “a big rush lining up sponsors to ensure financial viability,” said Twigge-Molecey. Toronto-based law firm Gowlings “got the ball rolling and committed fairly early,” said Spence; by show time, the conference had an impressive lineup of sponsors including Postro Wealth, CIBC, Silvercorp Metals and Ausenco.

“It was worth it,” said Postro Wealth president Patrick Postrehovsky. “The caliber of speakers at the event was first class and the size provided productive sharing of knowledge and lots of networking opportunities.”

“Canada and China are both world leaders in the mining industry,” added David McIntyre, a partner at Gowlings who spoke at the conference. “It is great that we are now coming together at events like this.”

The organizers intend to build on the success of the first conference to make it an annual event. The opportunity is certainly there, said Twigge-Molecey. “The Chinese will be a large part of the future of mining and metallurgy, globally, over the next decade or two.”

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