Battered miners see glimmer of hope as industry gathers at PDAC in Toronto

TORONTO/WINNIPEG – Metal and mineral explorers battered by a protracted price slump are still out of favor with investors, however the recent uptick in bullion prices and a few tie-ups with larger miners are offering juniors a glimmer of hope.

The ray of optimism may come as the world’s mining sector prepares for its largest annual gathering, the Prospectors and Developers Association of Canada convention in Toronto. The meeting set to begin Sunday is expected to draw some 20,000 attendees.

Canada hosts most the world’s publicly-listed mining companies. The majority are early-stage gold exploration companies, so a near 20 per cent begin the spot gold price to above US$1,250 an ounce has boosted gold miners of any size.

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“Something is happening in the gold market and individuals are waking up into it,” said Agnico Eagle Mines Ltd Leader Sean Boyd, noting that lacklustre global growth, the diminishing likelihood of a U.S. Federal Reserve rate hike and negative rates of interest in lots of countries bode well for gold.

The NYSE Arca Gold Bugs Index, which includes some large gold miners, has risen some 55 per cent this season. The S&P TSX Venture Composite Index, whose components include many small gold-exploration companies, is up nearly 20 percent in the last month and a half.

“We’re now more comfortable referring to an investment price recovery. The challenge obviously, is what this recovery might seem like?” said BMO analyst Jessica Fung, noting the mood was more positive this year in the bank’s annual mining conference that simply led to Florida.

“We believe it will likely be an extended hard climb, but a minimum of we are able to talk about it now.”

Even so, miners are hurting plus some may find it difficult to survive another year, especially with limited price recovery on the base metals side.

“It’s only a very hard time for any prolonged period,” said Blake Langill, a mining expert with Ernst & Young.

Still, there’s been some revived interest, even for beleaguered base metal players, with copper explorer Aston Bay Holdings Ltd inking a tie-up with BHP Billiton Ltd on their own project, while two rivals, Avala Resources Ltd and Reservoir Minerals Inc late this past year signed similar tie-ups with Rio Tinto Ltd .

“Last year, all of us thought i was at bottom. That wasn’t the case,” said PDAC president Rod Thomas. “We’re convinced we’re now at bottom and that we visit a little bit of light after the tunnel.”
? Thomson Reuters 2016