Junior Mining Sector Capital-raisings: The Effect of Information Asymmetry and Uncertainty Issues
Year: 2013
Type: article
Abstract: While prospecting by junior mining companies (JMCs) is a vital contributor to modern wealth creation, attributes of the junior mining sector (JMS) limit JMC-fund raisings to external equity (shares). In considering responses by JMC principals to deep discounting and other JMC-investor strategies, potential responses were found to: increase returns to principals, increase JMS moral-hazard issues, and further deepen price discounts on JMC share offerings, especially IPOs. It is suggested that the attractiveness and moral-hazard consequences of these potential responses can be greatly diminished if mining-tenement fees are raised and JMC prospecting costs are allowed as an offset against those fees
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2119682205