By Johannes
Kotilainen
How did this
year’s PDAC convention compare with shows in the past and what was the mood
like? SmallCapPower.com was proud to be a Gold Plus sponsor in 2015, and as a
result of our presence we were able to provide a unique perspective for those
unable to attend. SmallCapPower was given the opportunity to talk with industry
experts, CEOs and investors about their general thoughts and opinions regarding
small cap stocks, particularly in the junior mining sector. We have put
together a highlight video showcasing
the layout and activity that occurred this year. This is the first of three
articles addressing these questions and more. Look for the others to appear
within the next couple weeks.
This year’s
PDAC convention expanded its presence at the Metro Toronto Convention Centre to
include booths in the North Building, which contained mining vendors that
market products to mining companies. The South building housed the investor’s
exchange and the Trade Show, which was composed of countries and companies
providing products and services. The attendance this year was more than 23,000
people, compared to last year’s 25,000. Considering the conference was spread
out over a larger area this year, it allowed attendees to spend more time at
each booth. With the walkways being less crowded, attendee’s first impression
was that it was not as busy as the previous year. Despite this initial opinion
by some, the Convention Centre was buzzing with activity, with companies and
people from around the world, making the PDAC convention still one of the best
networking events in the world for the mining industry. And although there was
little in the way of company announcements this year, mining executives were
likely paving the way for future deals down the road.
This year
the lead up to PDAC 2015 was a bit gloomy, as the natural resource markets had
dropped significantly, and a lot of junior mining companies are challenged by
current market conditions. A few reasons behind the diminished interest in
mining include three key factors. First, many people have lost money in the
sector, particularly in gold-related juniors and are therefore reluctant to
invest. Currently there are many gold companies in the sector competing for a
decreased amount of capital. The final factor is the price of the commodities,
with gold prices closing at US$1212.80, and silver at US$16.53 on February 27,
2015 (the Friday before PDAC), compared to the closing prices of US$1333.80 and
US$21.31 on February 27, 2014, representing a decline of 9% and 22%,
respectively, on a year-to-year basis. This drop has caused some companies to
either slow or put their exploration and development projects on hold.
As the
conference progressed, there was a feeling that the small-cap companies are
accepting these facts and adjusting their expectations accordingly. Most
experts agree it is just a matter of riding out the storm. On the investor
side, SmallCapPower.com interviewed various industry experts about their beliefs
regarding junior resource stocks. The consensus was that despite the risks, in
the long term the good ones tend to outperform larger cap stocks and that
patient investors will be rewarded.
Over the
long run, demand for commodities will only increase as the global population
continues to migrate to cities, which improves their standard of living and
income.
Stay
tuned for our second article, which will highlight what the experts believe are
investment catalysts to turn the market around, and which commodities investors
should be watching.
