HALIFAX (Scrap Monster): The mining industry’s aggregate market capitalization fell in April to $1.82 trillion, the lowest level since December, said the Metals Economics Group (MEG), a mining research and consultancy group on Tuesday.
According to MEG, its pipeline activity index showed that significant drilling results also appear to be stalling. Gold drilling has remained flat since peaking in November and base metals results are at levels similar to late 2010-early 2011 after a moderate spike in February.
“Drilling activity remains lower than the highs of 2011 as adverse markets continue to make financing very difficult for early-stage explorers. Many junior explorers are reporting sufficient cash on hand to continue work, but some will likely scale back their programs to conserve cash,” MEG continued.
The bright spot in the data are the rise in initial resource announcements made in both March and April. “It is the first time since early 2009 that there were 15 announcements in a single month, and the two-month total of 30 is the highest since July-August 2008,” they added.
MEG also added that, its pipeline activity index measures the level and direction of overall activity in the supply pipeline, incorporating significant drill results, initial resource announcements, project development milestones, and significant financings into a single comparable index.
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