Mining finance specialist, José Luis Martínez, recommended using option contracts to access the financing required by mining exploration project owners at an early stage to continue developing the works that make it possible to determine the mining potential and consequently its value.

In the conference entitled "Structuring and financing of exploration companies" that he gave on the third day of sessions of the 12th International Congress of Prospectors and Explorers - proEXPLO 2021, Martinez focused his attention on exploration projects of non-consolidated companies, because consolidated or large companies have access to the capital market.

Financing for an exploration project has a different scenario than when the project is already under development or construction. In that sense, it is relevant to ask oneself at what stage of the cycle we are in and from there evaluate how to position for the future.

Martinez said that in the discovery stage and preliminary works it is very difficult to determine the project's value and therefore it is also difficult to attract the attention of mining companies, classic sources or other sources. Here what can make the difference is the technical team available and to keep in mind that the value is created along the way.

He also warned that at this stage, what any financing does is dilute the ownership of the project, partly because there is not much value at the initial stage. If the property or project is visible with the few results it has, the owner will be solicited; although this is not the common denominator.

On the other hand, he warned about the work of financial advisors who offer to obtain financing. "There is always someone who comes and says I will find financing for you," said Martínez, and in this regard, he recommended to take into account the background of such advisors. He did not rule out that for projects with progress, law firms can provide access to financing.

He also recommended to have the information organized, taking into account how the already consolidated companies present their information. He stated that a well-structured option contract is a mechanism that protects property and can facilitate project financing based on the progress made.