The principal source of funding the working capital
requirements of gold miners has traditionally been equity. However in the 1980s,
with a substantial increase in activity in the exploration for, and the
production of, gold the traditional sources of equity finance became no longer
sufficient to meet demand. With the often high cost of raising equity, the need
for developing alternative financing structures became critical, especially
since the stockmarket crash of 1987 which at least until recently, adversely
affected the amount of equity capital available for investment in
mining.