Exploration Continues To Dip In Mining Sector – SNL Metals & Mining

(Kitco News) - SNL Metals & Mining’s Pipeline Activity Index (PAI) fell again in February and is now riding a five-month fall, despite half of the index performing well.

The PAI is made up of four elements; number of exploration announcements, initial resources, completed financings and positive development "milestones."

According to their Monthly Industry Monitor report, all eight metals that make up SNL’s metals price index – cobalt, copper, gold, molybdenum, nickel, platinum, silver and zinc – tumbled in February, despite an industry aggregate market cap beating out the downturn by increasing to $1,350 billion in the month. 

In their report, SNL said it expected a return to “its downward trajectory” in March.

Drilling activity dropped month-on-month as only 113 ‘distinct projects’ reported drilling activity, while January showed 160. 

“Gold-exploration activity accounted for 59% of the total, but after the encouraging increase the previous month there was a fall to 67 gold projects in February,” SNL said. “Projects reporting copper assays fell to 18 from 26 in January, with nickel and silver projects each halving to eight.”

“The activity for other metals was little changed," the company said.

Looking at initial resources, SNL noted the significant slump in February as only five resources were named, totaling $2.72 billion – of that, $2.24 billion were due to base metals.

Focusing on the last two months, “initial resources were valued at $11.8 billion in December and $13.8 billion in January.”

SNL did point out some positive news for the junior space. 

“[F]inancings by junior and intermediate companies — those with annual revenue of less than $500 million — improved sharply in February after a disappointing January,” it said. “There were 21 financings of over $2 million in the SNL database during February, amounting to a total of $642.1 million.

“Of this total, 88% was from share issues, and companies listed on the TSX Group accounted for fully 95% of the total.”

Courtesy: Kitco News