As hundreds of mining officials packed their bags in the exhibit booths, organizers of the Prospectors and Developers Association of Canada convention are preparing to launch a strategic review to determine what they might do differently in future years.
As we await the results, here are some random thoughts on this year’s PDAC show.
As expected, the convention broke another attendance record, with 30,000 showing up in Toronto this year for what has become the biggest networking event on the Canadian mining calendar. That’s an increase from the previous record of 27,000 set in 2011.
The convention, now in its 80th year, attracts investors, analysts, mining executives, geologists, prospectors and international government delegations from all over the globe. The trade show and Investors Exchange combined feature over 1,000 exhibitors.
But the sheer scale of the event has some attendees wondering if it is getting too big. “It can be a little overwhelming with the number of juniors that are here,’’ said Wendy Cutler, a spokeswoman for Energy Fuels Inc. (TSX: T.EFR, Stock Forum), a U.S. vanadium and uranium explorer.
“Imagine if you were a regular investor trying to look at things,’’ added Doug Leishman, a Vancouver-based mining analyst, and consultant to Klondike Gold Corp. (TSX: V.KG, Stock Forum), among others.
Mining officials say the PDAC is such a huge draw that is very difficult to find hotel space on the days when the conference is on. One complained that local hotels are charging as much as $1,000 per night for a room. As a result, some companies are having to find accommodation either in bed and breakfast houses or in the suburbs.
Strange disconnect
Companies who haven’t attended the convention before must now get in line in order to secure exhibition space.
But others say the convention is so important that they can’t afford not to be there. “Because we are in the midst of construction, a lot of suppliers want to come by and talk to us,’’ said Olav Svela, a spokesman for Canada Lithium Corp. (TSX: T.CLQ, Stock Forum).
“We have seen a lot of traffic through here both on the investor and exploration side of things,’’ Svela said.
One veteran attendee said he found it odd this year to see such a disconnect between the high price of metals and the low share price of the juniors.
“The market probably thinks that the price of the metals will go down to where the juniors are,’’ said Bruce Mc Knight, a Vancouver-based advisor and consultant to Barkerville Gold Mines Ltd. (TSX: V.BGM, Stock Forum), Constantine Metal Resources Ltd. (TSX: V.CEM, Stock Forum), and Cue Resources Ltd. (TSX: V.CUE, Stock Forum), and others.
“Right now, everything is so expensive,’’ he said. “Even dirt is not dirt cheap.”
New Technology
The annual Tuesday night McEwen Mining Inc. (TSX: T.MUX, Stock Forum) (NYSE: MUX, Stock Forum) Reception, which this year featured rocker Kim Mitchell, has emerged as the key social event of the four-day PDAC convention.
But earlier in the day, CEO Robert McEwen took the time to plug Nevada Exploration Inc. (TSX: T.NGE, Stock Forum), a Vancouver junior, which uses ground water chemistry to explore for gold.
“The concept is quite unique, and very clever,” McEwen explained. The company has found a way to find trace amounts of gold in the water located near existing and former mines. “The thought is that if you go around the state and find the greatest concentration of gold in the water, it might be a good chance for finding a deposit there,’’ he said.
Under an agreement, McEwen Mining has engaged Nevada Exploration to complete a hydro chemistry project across the silver state to identify and delineate new exploration target areas in exchange for a service fee. Any projects that McEwen Mining elects to acquire will be considered designated properties, which McEwen will acquire for an initial payment of up to $25,000, leaving Nevada Exploration with a 30% carried interest.
But even if the technology doesn’t work, it won’t be considered a waste of time and effort.
“You just have to keep scratching the surface in the mining industry, looking at technologies that might give you an insight as to where a deposit might be,’’ McEwen said. “We thought that this was one of those technologies that was well worth a try.’’