The optimism pulsing through the Metro Toronto Convention Centre at last year’s PDAC offered hope for an end to the long and painful mining industry downturn that began in 2013, but the final verdict on 2018 was one of disappointment.
There were signs of recovery early in the year, but “the pendulum swings both ways, and we gave back a lot of the gains as the year progressed and commodity prices retreated,” said PDAC president Glenn Mullan.
Exploration expenditures in Ontario increased only marginally from C$539.7 million to C$567.5 million. The year was especially challenging for junior miners, who depend on public capital markets for financing, as weak commodity prices, investment apathy, cannabis, cryptocurrency and competition from other jurisdictions conspired against them.
Senior mining companies held their own, said Mullan, but “if you were trying to access capital to build a mine or continuing the late stages of exploration or feasibility, 2018 was a very difficult year.”
The numbers from Natural Resources Canada back him up. Exploration expenditures by junior mining companies actually fell from C$199.1 million in 2017 to C$172.1 million last year. Slumping commodity prices didn’t help.
Gold, for example, was US$1,312.05 in January, fell to a low of $1,178.40 in August and only rebounded to $1,279 by year-end. Nickel began the year at $5.60 per pound, hit a high of $7.00 and fell steadily to finish the year south of $5.00.
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