Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.
Never in over 30 years of writing for CMJ, have I seen a week so devoid of news in the mining industry. It has been said that no news is good news, but I think it is a case of everyone holding their collective breath to see what 2009 will bring.
The news during the last quarter of 2008 was mostly bad, and analysts have little good to say about the next six to 12 months. Perhaps they are waiting to see exactly how low metal prices will go. Predictions seem to be made grudgingly, and there is no consensus. The only bright spot appears to be gold, but even experts who follow that commodity are guessing US$1,000 an ounce to US$2,000. Or perhaps the industry movers and shakers have been enjoying the holiday season.
The vast majority of press releases hitting my inbox in the last week have been about private placements. Most of those were small, in the $500,000 to $1.5 million range. Most often the proceeds are to be used for working capital and debt reduction. Sorry to say, that sounds like an industry just trying to get by in the short term.
Our industry appears to be at a standstill, frozen we might say in the depths of a Canadian winter. Call me a cock-eyed optimist, but I don’t believe at all that “roughly half of Canada’s mining companies could go bankrupt” as was suggested by a Canadian Press item.
I trust our industry to use its resources—in the ground and in the treasury—with prudence. We have seen cyclical downturns before and weathered them. Overall, I believe the Canadian mining industry will be in a good position to profit from the next upturn as they did the last one.