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Just how bad is it for miners trying to raise money?

SNL Metals Economics Group calculates a proprietary index that tracks the value of mining financing around the world, and its latest reading came in lower than the worst days of 2008 at the height of the financial crisis. Only 49 significant financings – raising at least $2-million (U.S.) – were completed in May and June, the lowest two-month total since SNL started tracking financings in early 2008.

And junior and intermediate miners are drowning. They raised $585-million (Canadian) over the past two months, which is a stunning 70 per cent less than March-April and two-thirds lower than the same period in 2012.

For miners, it's not enough to have good projects anymore. "The number of companies able to secure funding based solely on the strength of their assets continues to dwindle," SNL noted.

All of this affects Canadian investment bankers, who are already struggling to make ends meet without mining deals. Small dealers are closing up shop, and according to people on Bay Street, some of the big investment banks are way off their fiscal year budgets.

The odd thing about the financing slump is that while metals prices have dropped, they still aren't in nearly as rough shape as they were during the crisis. According to SNL's own metals price index, on average these prices are still about 125 per cent above their levels at the start of 2008.

But investors don't seem to care. They won't pony up for new deals, and they keep dumping mining stocks. SNL calculates an industry-wide market cap, and the current value of $1.24-trillion is the lowest since June, 2009. That means mining stocks have wiped out the vast majority of their post-crisis gains.

(Tim Kiladze is a Globe and Mail banking reporter.)

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