By Kristine Owram, The Canadian Press

TORONTO - Lenders are still "very selective" when financing new mines but there now is significant liquidity available in the equity markets for companies that need to raise funds, according to the chief financial officer of major gold miner Agnico-Eagle Mines Ltd. (TSX:AEM).

"The amount of healing that's occurred in the market is remarkable," David Garofalo said Tuesday, speaking to a lunchtime gathering of the Canadian Investor Relations Institute in Toronto.

However, banks are still hesitant to issue long-term financing. In the mining industry, this reticence is hitting one-asset junior companies particularly hard, he said.

Luckily, juniors and other miners finding it difficult to get financing through the credit markets can now turn to the equity markets.

A year ago, share offerings as a way to raise capital were virtually non-existent due to a lack of investor confidence. Today, several miners have shown that this is no longer the case by successfully making major share offerings - including Barrick Gold Corp. (TSX:ABX), which managed to raise US$4 billion in September to eliminate its gold hedges.

"Money is available for juniors (in the equity markets)," Garofalo said, citing Minefinders Corp. (TSX:MFL), Gammon Gold Inc. (TSX:GAM), Northgate Minerals Corp. (TSX:NGX) and Osisko Mining Corp. (TSX:OSK) as examples of juniors that have successfully raised capital through the equity markets in recent months.

"We've seen valuations in the junior space escalate significantly and that's giving them the confidence to go out and raise money."

Garofalo said the outlook for gold miners is particularly encouraging due to shrinking supply and soaring demand for the yellow metal. Existing mines aren't enough to keep up with demand and new projects in stable jurisdictions are increasingly hard to come by.

"Any growth that will come will have to come from greenfield (new) projects and those have been few and far between, especially ones of scale," Garofalo said.

"So for the foreseeable future we're going to see mine supply continue to decline in spite of the fact we're at record nominal highs in gold price."

Gold is considered a safe haven from the effects of inflation as governments around the world continue to fund massive stimulus spending projects. This has caused the gold price to soar above US$1,100 per ounce in recent weeks.

"There's a competitive debasement of currencies going on and I think that will drive the gold price to unprecedented levels," Garofalo said.

"There's going to be a panic to buy gold when inflation rates start to spike up," he added.

Agnico-Eagle will continue to focus on exploration and development of new projects to increase its shareholders' leverage to the rising price of gold, Garofalo said. This strategy of increasing its gold reserve while keeping its share count down has worked for the company in the past - Agnico's leverage to the price of gold has increased five fold in 11 years.

"We're still exploring, finding inventory on the ground and increasing that gold-price leverage on a per-share basis," Garofalo said.

Agnico has brought several new mines online in the last year, including Kittila in Finland, Lapa in Quebec and Pinos Altos in Mexico. Although Garofalo admitted the company "laid an egg" with disappointing results in the third quarter - Agnico produced 30,000 fewer ounces of gold than it expected to due to difficulties at several of its mines - he said its new operations position the company well to take advantage of the rising gold price.

"All this production's coming on stream just as the gold price is starting to take off, so we're going to make a lot of money for our shareholders," he said.

Agnico-Eagle is one of the biggest gold miners in Canada, with operations or projects in Quebec, Nunavut, Finland, Mexico and the United States.