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decisions they wouldn't have to make in better times. Some decisions could include cutting spending to free up funds the company still has. This includes terminating any non-essential exploration work as well as any plant expansions. On the human resources side, it may also mean a hiring freeze or reductions in staff as Barrick Gold Corp. did in June when it announced one-third of its corporate staff in Toronto were being let go as well as dozens of workers in Australia and 55 employees in the U.S. The next step is to consider equity financing options or other alternatives such as commodity streaming, commodity-linked notes or preferred-share offerings, high-yield note offerings, or traditional debt-like offerings. There's also the concept of partnering with equipment suppliers and construction management companies. "Commodity-linked notes and preferred-share-type offerings have been around before but not that prevalent," says Mason. "A lot of companies are starting to turn to these alternative deals. We've worked on a number that are in the pipeline or in negotiations. They're not anyone's first choice because they tend to be more complicated or more expensive but they are the way the lucky companies can bridge the gap to better times." Streaming transactions involve a company selling "forward" some of its future production or a lump sum to advance its project towards production. Silver Wheaton Corp. of Vancouver has been doing this for some time. In February of this year, the company announced a U.S.$1.9-billion acquisition of gold streams from Vale SA. "Silver Wheaton execs have said during 2006-08, when equity markets were flying, it was hard to get a streaming deal done because people had equity as the alternative, but now that equity is off the market, streaming has become a viable alternative for some companies and there have been a number of deals announced. It wouldn't be everyone's first choice but it works for both sides," says Mason. On the prevention front, it's also wise to keep an eye out for proxy battles from shareholder activists, says Mason. "I have a few clients who are struggling in the mining sector as most of them are and we're very concerned about proxy battles. I really think of proxy as the new M&A and there's no other way to look at it." That means keeping in touch with shareholders, building a strong and independent board of directors, and making sure all arrangements are in place to permit the board to react if a shareholder challenge comes up. Overall, Mason says despite the dark times, the mining industry is populated with people willing to take risk and ride them out. "You have to make the best of it. I find the mining executives I work with to be incredibly optimistic people. They are risk takers by nature otherwise they wouldn't be there and stay positive," he says. Laurel Hill continues to be selected for the largest M&A deals in Canada. Proxy Solicitation services regarding the proposed acquisition by Loblaw Companies Limited $12.4 Billion Our continued success demonstrates our commitment to excellence, the integrity of our company and our dedication to our clients. Thank you to our clients and their advisors for continuing to recognize Laurel Hill as the industry leader in shareholder communications. laurelhill.com LaurelHill_CL_Sep_13.indd 1 www.CANADIAN L a w ye r m a g . c o m 13-08-14 11:07 AM September 2013 49

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