Development finance for junior metal mines with no dilution

Digital Metal Exchange opens a new class of digital assets, to simplify and speed up the financing of metal exploration and mine development.

Twenty eight junior mining companies in Australia raised $10M or more in the March Quarter of last year, more than doubling the number of successful fundraising rounds quarter on quarter. While good news for the companies involved, it has been predominantly done via public capital markets, diluting the shareholders and incurring high compliance costs. Exploration and development companies in Australia are seeing healthy capital inflows, and investment in junior gold mines in Australia is growing but new means of securing development funds are needed. 

Now is the time for rapid innovation. The world’s metals business is worth nearly $3 trillion per annum in physical metal alone, but it is not getting any easier to finance new exploration and development. Digital Metal Exchange (DMX) comes onto the market at a moment when industrial demand for metals is growing quickly, driving an urgent need for more assets to be explored and developed.

Most existing methods of securing capital involve significant dilution – in terms of equity or ongoing profits. Dilution is a fact of life when raising cash through share issues or streaming, but is entirely absent from the DMX model. DMX allows investment and trading in metal while it is still in the ground, in the form of a new class of digital assets. These are created using a proprietary pricing  and tokenisation mechanism, allowing mines to secure funding by forward-selling some of their future production and traders to buy and trade metals at deep discounts (for future delivery.) The DMX exchange provides a launch platform and liquid secondary market for these digital assets. It is a full-featured, institutional-grade commodities exchange focused on the metals market operating under strict regulatory permits and exemptions. 

DMX due diligence process is focused on serving the needs of both miners and investors. It is transparent, easily updated, and designed from the perspective of frictionless user experience, instead of administrative rigidity. Importantly, the DMX funding mechanism is tied to development milestones. This drives mines to continue delivering on their exploration schedule and gives surity of funding through to production, while providing investors with measurable results.

Digital Metal Exchange has been developed over the last twenty four months or so by an international team headquartered in Melbourne but distributed also across Europe and the USA. The company is in the process of onboarding the first gold mine – located in Australia – and forward selling USD $20M of gold at approximately 25-30% discount.  

Jeremy Samuel, CEO of the Digital Metal Exchange said: “Feedback on the DMX funding process which we have had from mines in Australia and elsewhere has been very positive and we are excited to be going live with our first gold mining project early this year”.