VIDEO - Kai Hoffman: Flow-through Deals Could “Save Your Investment Bacon”

Resource Investing News

Kai Hoffman, CEO of Soar Financial Group, shares insight on the state of financing in the resource space in this interview from PDAC.

Last year wasn’t stellar for the resource space, but Kai Hoffman, CEO of Soar Financial Group, believes there’s hope for investors in 2019. 

“2018 was a pretty bad year for junior mining,” he explained at this year’s Prospectors & Developers Association of Canada (PDAC) convention. “We’ve seen no bigger financings, the market has dropped off, the numbers have dropped off; the number of deals has almost halved.”

In his opinion, “the only positive thing was [that] the average amount raised per financing remained fairly flat. It was only down 12 percent, and that was $2.9 million.”

So what’s the upside he sees in 2019? “I think flow through has been picking up, I think that’s one really important trend,” he said.

According to Hoffman, flow-through financings act as “sort of a safe haven — [they are] a safe backup, it’s a safety net for many companies … it helps you advance projects, it helps create news flow in a time where news flow is very rare.”

Soar Financial Group recently released a report on financing in the resource space in conjunction with PDAC, and Hoffman also pointed to a number of other trends highlighted in that document, stating that he sees uncertainty in the market influencing financing activity.

At a macro level “it’s the US and China trade talks — that’s really bad for the base metals, we’re just waiting for a resolution there,” he said. “I think any deal would probably help those base metals prices.”

On a smaller scale Hoffman pointed to the recent mega mergers in the gold space. “The Barrick Gold (TSX:ABX,NYSE:GOLD)/Newmont Mining (NYSE:NEM) feud … is causing sort of a vacuum right now.”

Hoffman continued, “nobody knows what’s happening … and of course we’ll see probably a pause in M&A activity until this has been resolved.”

Watch the video above for more of his insight on financings in the resource space. You can also click here to view our full PDAC 2019 interview playlist on YouTube.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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