Rates Aren't Coming Back Down, and Mining Valuations Know It
Discount rates on long-life resource assets have reset for good, and it's valuation discipline, not leverage, that will keep portfolios intact.
The cost of capital facing resource assets has shifted upward in a lasting way, and a modest easing in policy rates won't undo that. Projects priced up during the cheap-money years are still carrying valuations built on a discount rate the market simply isn't offering any more.
In practice, this means projects that only worked because capital was cheap and patient are being shelved or restructured rather than pushed forward. We see that as a good thing — scarce capital brings back the risk pricing that the last cycle had smoothed away.
In our own credit work we apply cautious long-term price assumptions and stress-test the timeline as hard as we stress the commodity price. If a structure only works when the metal price, the schedule and the recovery rate all land perfectly, we won't put our name to it.
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Further items.
Where the Money Is Actually Made in Physical Metals Finance
The real margin comes from logistics, paperwork and picking the right counterparties — not from guessing where the gold price goes next.
Read →OperationsThe Real Obstacle in Mining Now Is Permitting, Not Geology
It's licence certainty, community buy-in and power access — not ore grade — that now decides which projects meet our return bar.
Read →ESGWhy Community Buy-In Now Belongs in the Financing Model
Social licence has stopped being a box-ticking exercise and has become a real driver of schedule, cost and what can ultimately be recovered.
Read →