How has Sidex’s approach to investment evolved over the past two years?

Sidex has shifted its focus to include more innovative companies and approaches into its scope of investment. The markets have been difficult over the last few years, and we continue to assist early stage junior companies who find it difficult to attract financing in challenging markets within the Québec mining industry. We will invest in junior companies that focus on innovation and want to try different approaches to mining. When proposing new techniques, it can be difficult to create interest and attract clients that are willing to take on the risks associated with new technology. 

Sidex is funded by the Government of Québec and the Fonds de Solidarité. Can you elaborate on the dynamic between these entities? 

Sidex was financed with C$50 million for the first five years of its existence. We are still operating on these funds and have not yet had the need to refinance. The company has also returned capital, in the form of dividends, to sponsors. Sidex is dedicated to providing financing to smaller mining companies, and thus the investments that we make are not very large. 

Every eight years, the Minister of Finance and the Fonds de Solidarité will come together to decide if the mission and objectives of Sidex still relate to the current environment and if there is a need for changes to be made. They then renew their commitment and will not intervene for the next eight years, giving Sidex independence and autonomy. 

To what extent has Sidex seen return on investment despite the challenging market conditions?

The market began decreasing in 2011, with 2015 being an extremely difficult year. In 2016, we started to see rejuvenation in the market and Sidex recouped all the investments the company had made since 2012 within one year. The rebound of the market did not last long and in 2017, we again saw very difficult market conditions, continuing into 2018. For Sidex, whether the market is in a downcycle or an upcycle, we are always looking for projects that make sense economically.

How have new markets such as cannabis and cryptocurrencies affected the investment climate for exploration companies?

Investment leaving the mining market is generally from speculative investors that follow the trends within the markets. When there is activity in the cannabis and cryptocurrency markets, speculative investors follow, but as soon as the spike is over, the investment again returns to more stable markets or markets with more activity. The mining industry, especially junior companies, are affected by new markets such as cannabis and cryptocurrencies, but these markets are still speculative, and we believe that investment will return in time. 

Why has Sidex decided to place a greater focus on innovation in recent times? 

The mission of Sidex is to invest in companies engaged in mineral exploration in Québec in order to diversify Québec’s mineral base by promoting projects with attractive market potential; to stimulate investments for the exploration of existing mining districts that show strong potential for diversification; and to promote new entrepreneurs and innovation.

Introducing new concepts and techniques within the mining industry can change the playing field and pave the road for more and better discoveries to be made. Sidex has a focus on innovation with the hope to find the next transformational technology or technique for the global mining industry. Innovation is necessary within any industry to keep up with changing environments, to optimize operations, and to effectively move forward. 

Can you highlight one of Sidex’s success stories? 

Sidex financed Midland Exploration with the aim to develop a serious junior exploration company with larger means. Midland Exploration had to raise the same amount that we invested, and we required that they added more people to their team to develop concepts and ideas. They have made a success of that investment and every year they are developing new projects. Additionally, in 2017, Sidex financed new entrepreneurs such as Kintavar and Harfang Resources. 

How would Sidex like to see Québec’s mining industry evolve moving forward, and how would the company play a part? 

We need a proper discovery of significant stature in Québec to attract further investment into the province. Sidex is continuously developing and we aim to try new approaches every year. In 2019, the company’s strategy is to enhance its focus on innovation and support entrepreneurs and early stage juniors that have big ideas. We are part of a group that brings together industry and academic institutions in collaboration to solve real-time problems, and Sidex is here to support projects with high potential, as well as innovative approaches that we hope will transform the industry in the near future.