The annual conference of the Prospectors and Developers Association of
Canada (PDAC) is under way in Toronto and the mood on the floor and in the
Investors Exchange is, as one might expect, cautiously hopeful, even if about
a dozen booth spaces are unoccupied.
On Sunday afternoon, PDAC delegates packed the John Bassett Theatre to
listen to Ivanhoe
Mines Ltd. (IVN:TSX) Executive Chairman Robert Friedland deliver a
memorable keynote address about urbanization, and the relentless need for
copper and platinum group metals in these settings. He said one small car
uses roughly 30 grams of platinum in a catalytic converter, and 400M vehicles
are expected to be on China's roads by 2030. There are 90M currently.
Copper is used heavily in urban infrastructure and in cars, Friedland
said, especially electric cars, where 70% of a lithium-ion battery is copper.
He called urbanization the most profound phenomenon in the history of our
species, noting that two-thirds of the world's population will be living in
cities by 2050; about 54% already are.
Friedland and his Ivanhoe Mines team will receive the PDAC's Thayer
Lindsley Award for international mineral discoveries for the massive Kamoa
copper deposit in the Democratic Republic of the Congo. Ivanhoe won the same
award in 2004 for its discovery of the monolithic Oyu Tolgoi copper-gold
deposit in Mongolia.
Before the conference, Toronto-based Red Cloud Mining hosted an investor
event featuring 18 juniors, up from 15 at the October showcase. Hosted at the
Fairmont Royal York Hotel in Toronto, the meeting is akin to speed-dating for
mining investors and analysts. CEOs pitch up to a dozen people at a time in
small conference rooms. That gives investors and industry people a chance to
meet management and ask questions. About 250 people attended, roughly double
last year's number.
Presenters included Avnel Gold Mining Ltd. (AVK.TSX); Abitibi Royalties
Inc. (RZZ:TSX.V), Balmoral Resources Ltd. (BAR:TSX; BAMLF:OTCQX); Claude
Resources Inc., (CRJ:TSX), Excellon Resources Inc. (EXN:TSX; EXLLF:OTCPK), Integra Gold
Corp. (ICG:TSX.V; ICGQF:OTCQX), Kootenay Silver Inc. (KTN:TSX.V),
Kirkland Lake Gold Inc. (KGI:TSX), Klondex Mines
Ltd. (KDX:TSX; KLNDF:OTCBB), Lake Shore Gold Corp. (LSG:TSX), Richmont Mines
Inc. (RIC:TSX; RIC:NYSE.MKT), St Andrew
Goldfields Ltd. (SAS:TSX), Stornoway Diamond Corp. (SWY:TSX); Teranga
Gold Corp. (TGZ:TSX; TGZ:ASX), Wellgreen
Platinum Ltd. (WG:TSX; WGPLF:OTCPK), Western Copper and Gold Corp.
(WRN:TSX; WRN:NYSE.MKT), Victoria Gold Corp. (VIT:TSX.V); and Victory Nickel Inc.
(NI:TSX).
A couple of the presenters were recent industry award winners. Stornoway
Diamond President and CEO Matt Manson won the 2015 Prospectors and Developers
Association of Canada's Viola R. MacMillan Award after Manson raised almost
$1B to develop the Renard diamond mine in north-central Québec. For the
second straight year, Balmoral Resources President and CEO Darin Wagner
accepted the Prospector of the Year Award from the Association Minière du
Québec (AMQ) for Balmoral's Grasset nickel-PGE discovery in the Abitibi
region. In 2013, Balmoral received the same AMQ award for its discovery of
the Martiniere gold zone.
The event kicked off with a keynote address by BMO Capital Markets Vice
President and Commodities Specialist Jessica Fung, who reminded that audience
that there have been five recessionary periods over the previous 50 years and
global copper demand dropped during each. However, unprecedented quantitative
easing pulled global copper demand forward in the 2009 financial crisis, even
amid the worst recession since the 1930s.
Fung noted that while copper demand in the U.S., Europe and Japan dropped
by double digits in 2009, China's $590B stimulus package prompted a 38% pop
in copper demand in a key copper-consuming region. So the world essentially
borrowed its way to commodities consumption.
But that artificial demand growth meant that miners failed to cut supply,
and BMO now forecasts a surplus copper market through 2018. Fung said the
only answer is a supply-side response, owing to an ongoing lag in demand
growth.
The lunchtime panel discussed the merits of regulated equity crowdfunding
for mining. The concept had people listening, but many questions need to be
answered. Panelist Oscar Jofre founded KoreConX, an online platform and
portal builder. His company built and sold KlondikeStrike.com, the world's
first equity crowdfunding portal for mining. "In order for this to work,
you have to know how to make the crowd work for you. How are you selling your
story?" Jofre asked. "There is a massive crowd out there looking to
invest."
