The publication of PwC’s BC Mine report gave a boost to Canadian mining stocks this week with news that gross revenues from mining in British Columbia reached a record high last year.
BC miners posted gross revenue of C$12.3 billion, compared with C$11.7bn in 2017, even as capital expenditures fell to C$1.2bn, from C$1.5bn. The revival of the Golden Triangle by an exciting array of junior gold miners is a major factor behind the mining boom in BC.
“These results suggest that confidence and investment are returning to British Columbia’s mining industry. As always, there are some success stories and some struggles. The key for the future is for British Columbia to strive to encourage responsible new investment in the province to maintain the pipeline of projects that eventually turn into mines. Investments in exploration projects today will lead to the producing mines in the next decade and beyond,” PwC’s experts said.
This year’s BC Mine report included a special feature on the Golden Triangle, which the authors described as “home to some of the world’s most promising new mines and mining projects, such as Pretium Resource’ s Brucejack Mine and Seabridge Gold’s KSM Project, among others.”
Also singled out for mention were Skeena Resources, which is working to revive two of Canada’s most successful high-grade precious metal mines of the 1980s and 1990s; and Ascot Resources, which is working to revive the Premier gold and silver mine, which was the largest gold mine in North America before its closure in 1952.
News of growing revenues in Canada’s most important mining state came as a welcome boost after the Financial Post became the latest outlet to air concerns over investment in Canada’s mining stocks.
Citing a recent conference in New York by the Vancouver-based research and advisory firm Oreninc, the article said Canadian-listed mining companies are raising less money and forging fewer deals this year than at any point in the last decade. One reason for the drought is said to be investor’s current infatuation with cannabis companies, which raised $4bn in 2018 and are dominating fundraising on the TSX-Venture exchange.
What would help junior gold stocks in particular, of course, is a definitive upturn in the price of the yellow metal. In his column The Daily Gold, Jordan Roy-Byrne wondered if the trade war between the SS and China ever would lead to a new bull market in precious metals, given the muted reaction to this week’s escalation.
“The short answer is yes, if it leads to a downturn and Fed rate cuts,” he concluded.
Meanwhile on the Seeking Alpha blog, Frank Holmes recommended exposure to gold stocks as a way of hedging against expected market volatility. His pick of the gold stocks included no true junior miners, but his shortlist of three had a distinctly Canadian flavour: Wesdome Gold Mines, K92 Mining, and Wheaton Precious Metals.
In further mining news, Canada’s miners were called upon to hire more women, as former Anglo American boss Cynthia Carroll said the sector needs to do more to support gender diversity.
With women making up just 18% of the mining workforce in Canada, diversity is a growing issue within the sector and was a major topic during the CIM 2019 Conference in Montreal at the start of the month.
“It’s a very, very conservative industry and it needs to change,” said Carroll in an interview with Bloomberg. “They have got to be casting their net more broadly, and they’ve got to be looking at women.”