TORONTO/WINNIPEG – Metal and mineral explorers battered by a protracted price slump are still from favor with investors, nevertheless the recent uptick in bullion prices and some tie-ups with larger miners are offering juniors a glimmer of hope.
The ray of optimism comes as the world’s mining sector prepares because of its largest annual gathering, the Prospectors and Developers Association of Canada convention in Toronto. The meeting set to start Sunday is anticipated to attract some 20,000 attendees.
Canada hosts most the world’s publicly-listed mining companies. Most are early-stage gold exploration companies, so a near 20 percent begin the spot gold price to above US$1,250 an oz has boosted gold miners of all sizes.
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“Something is going on within the gold market and individuals are getting out of bed into it,” said Agnico Eagle Mines Ltd Chief Executive Sean Boyd, noting that lacklustre global growth, the diminishing probability of a U.S. Fed rate hike and negative interest rates in lots of countries bode well for gold.
The NYSE Arca Gold Bugs Index, which includes some large gold miners, has risen some 55 percent this season. The S&P TSX Venture Composite Index, whose components include many small gold-exploration companies, is up nearly 20 per cent in the last month . 5.
“We’re now much more comfortable referring to a commodity price recovery. The task obviously, is what this recovery might look like?” said BMO analyst Jessica Fung, noting the mood was more positive this year at the bank’s annual mining conference that simply led to Florida.
“We believe it will likely be a long hard climb, but at least we are able to talk about it now.”
Even so, miners are hurting plus some may struggle to survive another year, particularly with limited price recovery around the base metals side.
“It’s only a very tough time for a prolonged period,” said Blake Langill, a mining expert with Ernst & Young.
Still, there has been some revived interest, 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 last year signed similar tie-ups with Rio Tinto Ltd .
“Last year, we all thought i was at bottom. That wasn’t the situation,” said PDAC president Rod Thomas. “We’re convinced we’re now at bottom and we visit a little bit of light at the end of the tunnel.”
? Thomson Reuters 2016
