SNL Metals & Mining Releases March Monthly Industry Monitor
Finds gloomy market conditions for the international mining industry
Announced today, SNL Metals & Mining’s latest Monthly Industry Monitor reveals another set of depressing statistics. The first two months of the New Year have failed to dispel the gloomy market conditions for the international mining industry.
SNL’s Pipeline Activity Index (PAI) has four constituents: the number of exploration announcements, initial resources, completed financings and positive development “milestones.” The PAI fell in February, for the fifth consecutive month, despite two of the constituent measurements showing a month-on-month improvement (see graph).
Although SNL’s metals price index had improved fractionally in January, it fell to 108 in February. Indeed, there were falls for all eight constituents of the index — cobalt, copper, gold, molybdenum, nickel, platinum, silver and zinc. While the industry’s aggregate market cap bucked this trend by increasing to US $1,350 billion at the end of the month, early indications for March suggest the industry’s value will resume its downward trajectory.
The number of distinct projects reporting drilling activity fell to 113 last month, compared with 160 projects in January. Gold-exploration activity accounted for 59 per cent of the total, but after the encouraging increase the previous month there was a fall to 67 gold projects in February. Projects reporting copper assays fell to 18 from 26 in January, with nickel and silver projects each halving to eight. The activity for other metals was little changed.
Only five initial resources were announced in February, valued by SNL at just US$2.72 billion. Almost 68 per cent came from companies listed on the Toronto Stock Exchange, with base and other metals resources accounting for US$2.24 billion of the month’s total. By comparison, initial resources were valued at US$11.8 billion in December and US$13.8 billion in January.
SNL monitors development “milestones” but there was only one positive development recorded in the SNL database in February. Like the two positive developments in January, this milestone related to a copper project in Latin America. However, financings by junior and intermediate companies — those with annual revenue of less than US$500 million — improved sharply in February after a disappointing January. There were 21 financings of over US$2 million in the SNL database during February, amounting to a total of US$642.1 million. Of this total, 88 per cent was from share issues, and companies listed on the TSX Group accounted for fully 95 per cent of the total.
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