If they weren't sufficiently jaded already, mining executives were probably feeling a little more bruised after attending this year’s Prospectors and Developers Association of Canada conference in Toronto, which wrapped up on Thursday.
Anyone who legged it from Toronto’s downtown hotels to the conference rooms in bowels of the Convention Centre had to navigate their way around an obstacle course of unfinished construction at the Union subway station as the city scrambles to prepare for the Pan American Games in July.
It meant a long walk in bitterly cold weather for many of the 23,578 attendees who showed up at the 4-day conference this year.
Given that the junior minerals sector is locked in an entrenched slump, many were surprised that the conference halls were so busy.
Some were astonished by the long lineups at the Mining Night dance on Tuesday, even though everyone who got in received two free beer tickets at the door.
The large, albeit lower than expected turnout, meant that those that took booth space in the trade show area were faced with the usual challenge of how to stand out from the crowd.
Folks at
McEwen Mining Inc. (
TSX: T.MUX,
Stock Forum) seemed to have the answer.
Anyone who stopped in at the McEwen booth could have their picture taken for free with a 400-ounce gold bar [worth about $500,000 at current prices). Many took advantage of the opportunity.
Mindful of the industry’s fragile state,
Ivanhoe Mines Ltd.(
TSN: T.IVN,
Stock Forum) Executive Chairman Robert Friedland tried to set a positive tone by telling a commodities seminar on Sunday that the ladies and gentlemen who go out and look for minerals are the “good guys.”
The problem is they aren’t finding them in quantities that are necessary to draw investors and institutions back into junior resource stocks.
Even Friedland, a Singapore-based billionaire, with major discoveries under his belt, is facing challenges with Ivanhoe trading at 85 cents in a 52-week range of $2.04 and 67 cents.
“There are not a lot of new discoveries,’’ complained Bill Roscoe, Chairman Emeritus and Principal Geologist at RPA Inc. in Toronto. With so many companies having trouble raising cash, Roscoe said he is doing a lot of property evaluation work these days for private equity firms.
“It’s a very well entrenched recession for juniors and it’s hard to say when things are going to come back.’’
Toronto based consultant Michael Power said that in his opinion there was too much emphasis on dressing up old properties under new banners and trying to flog them to investors.
Ecuador was one of this year’s PDAC country sponsor’s, and it wasn’t surprising to see the large number of
Lundin Gold Inc. (
TSX: V.FST,
Stock Forum) banners on the glass sides of the elevators leading down to the conference rooms.
After recently acquiring the Fruta del Norte mine from
Kinross Gold Corp. (
TSX: T.K,
Stock Forum) for US$240 million, Lundin (formerly Fortress Minerals Ltd.) will try to succeed where Kinross failed by putting the mine into production.
But Lundin faces as uphill battle, as Fruta del Norte isn’t the only mine in Ecuador that is currently stalled by taxes that are among the highest of any in the region, with the government picking up around 51%, according to a study by consulting group Wood Mackenzie, and reported by Reuters News Service.
Meanwhile commodity price forecasters were not offering up much hope for a quick rebound.
“This year is going to be fairly dull,’’ said Jonathan Leng of Wood McKenzie in a speech about global zinc prices.
Dundee Capital Markets analyst Martin Mureenbeld wasn’t much more optimistic about the price of gold, which he expects to average US$1,255 an ounce in 2015.
On the spot market, gold was trading at US$1177.08 an ounce on Friday.