Despite a resources boom, mining and resource companies are doing it tough in the current economic climate. Skilled worker shortages, taxation issues, increased scrutiny from the ASX, a market with no appetite for risk, limited off-market debt and political intervention are just some of the major challenges faced by the mining industry that threaten sustainable growth. To raise capital for growth, investors must trust the brand, strategy and leadership of the company and believe in its potential through the highs and lows of market volatility.
In the current market conditions, this isn’t easy for companies as the fight for shareholder capital remains fierce and the capacity to raise a mainstream profile diminishes. A reduction in the ability to spread awareness regarding exploration, development and production activities has been sparked by the downsizing of Australian media outlets. Issues such as coal seam gas exploration, land development, and taxes currently dominate the headlines. Mid cap miners need a multi-channel approach if they are to reach the investment community and the people or institutions that produce trusted information. Companies need to be present in online channels and networks as much as traditional forums to back strategic investor communications. This requires a well articulated investment proposition wrapped in a compelling story as well as understanding shareholder perceptions, investment strategies and behaviour.
Ellis Jones Managing Director and qualified geologist, Rhod Ellis-Jones, has joined with Tom Niklai, a former investment banker and George Feher, a corporate lawyer, to establish Caldera, a firm that addresses the unmet demand for sophisticated communications and compliance advice. Caldera is a specialised investor relations firm to the mining, resources and energy sectors, that has been developed specifically to serve companies dealing with challenging regulatory and capital conditions.
In a nutshell, Caldera aims to make its clients a preferred investment. The launch of Caldera will coincide with the Australasian Joint Ore Reserves Committee’s (JORC) response to the ASX release: ASX Listing Rules Review Issues Paper: Reserves and Resources Disclosure Rules for Mining and Oil & Gas Companies. The increased scrutiny – at a time when the compliance burden is already very high for Australian miners – will make Caldera’s services more important than ever to mining and resource companies who will find themselves caught in a collision of regulating rules.
Caldera’s analysis of key resource exchanges worldwide reveals that the ASX is unique in its call for increased reporting obligations. The firm has invested significant resources in intellectual property development and has created a four-tiered compliance process so clients can be absolutely sure of their ASX reporting. Stretegic investor relations are vital to the growth of any public company.
Caldera supports strategic advice with production of materials and web based technology in three service areas:
- Investor communication
- Exchange compliance advice
- Investment market and perception research.
What differentiates Caldera is the unique combination of extensive and relevant experience held by its partners in these key service areas to ensure personnel, the investment community and the media, can all be sure they’re talking to people who understand their objectives. If it is the mining and resources sector that will ultimately see us through this global recession, mining companies need to find a way to win over cautious investors and to overcome the uncertainty posed by conflicting regulating rules and the complexities of the current market. Caldera will be there to provide the clarity and assurance sought by mining and resource companies and to attain the capital required for growth.