Canadian gold miners keen to tap equity market as gold price pops

By Euan Rocha and John Tilak

TORONTO, Feb 22 (Reuters) - Initial public offerings in the Canadian market may be dead right now, but a bevy of publicly listed gold miners is scrambling to push through equity offerings to capitalize on a bullion price pop, bankers say.

With the price of gold above $1,200 an ounce for the first time in eight months, about half a dozen players are keen to take advantage of market conditions, said two bankers who asked not to be named to protect client relationships. They declined to identify the potential issuers.

"We're in a lot of dialogue. We expect there's going to be a few more," said the first banker, adding only select names will be able to tap the market and that the quality and structure of any offering remain key.

He expects most of the capital raises to range between C$20 million ($14.58 million) and C$150 million but sees chances of a bigger offering from a mid-tier or large companies.

"The bigger hurdle is who can come to market, not who wants to come," said the source. "It's a buyer's market for sure."

Erik Goldsilver, a partner at law firm Borden Ladner Gervais, said it will be harder for early stage exploration firms to raise money, as investors still view that part of the market as too speculative.

Many investors fled the sector amid a broader slump in gold prices and stock values since 2011.

Still the roughly 14 percent rally in the price of spot gold this year has at least some looking at bullion miners more favorably.

Canadian gold miners have raised C$1.47 billion in the year to date in Canada, up from C$1.2 billion over the same period last year, according to Thomson Reuters (Dusseldorf: TOC.DU - news) data. The numbers obscure the fact that there have been just four such secondary equity offerings from gold miners this year, down from 14 a year ago.

Roxgold (Other OTC: ROGFF - news) recently announced a C$20 million offering, shortly after Osisko Gold Royalties' C$150 million capital raise.

Those offerings were dwarfed by Franco-Nevada Corp's $920 million equity issuance, which was upsized from a $550 million offering. The proceeds are largely being used to fund the acquisition of a precious metals stream from Glencore (Xetra: A1JAGV - news) 's Antapaccay mine in Peru.

With the success of the Franco offering, the second source expects a flurry of capital raising among Canadian gold miners over the next month if bullion prices remain favorable.

($1 = 1.3713 Canadian dollars) (Reporting by Euan Rocha; Editing by Cynthia Osterman)