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2014 ends on a disappointing note for explorers as negative trend continues

DOWNWARD TRAJECTORY
There were drill announcements from only 111 projects in December, compared with 142 in November

DOWNWARD TRAJECTORY There were drill announcements from only 111 projects in December, compared with 142 in November

27th February 2015

By: Ilan Solomons

Creamer Media Staff Writer

  

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The continuation of a 12-month-long negative trend in the global mining industry resulted in 2014 ending largely on a disappointing note for the exploration sector, says professional services firm SNL Metals & Mining.
According to the company’s January 2015 ‘Monthly Industry Monitor’ report, the final month of 2014 mostly added to the gloomy market conditions that prevailed throughout the year for the international mining industry.

“December is a period that inevitably sees lower levels of exploration and resource announcements, and December was every bit as disappointing as expected,” states the report.
At the end of 2014, the mining industry had a combined market capitalisation of under $1.3-billion, compared with the more than $1.34-billion at the end of November and more than $2-billion in February 2012.
Reflecting the poor market conditions, SNL Metals & Mining’s Pipeline Activity Index (PAI) declined for the third consecutive month in December 2014.

The report notes that there were drill announce- ments from only 111 projects in December, compared with 142 in November.
Moreover, SNL Metals & Mining says that, although its indexed metals price improved slightly in December, ending a four-month decline, the net positive value of the industry’s project milestones in 2014 was only $501-billion, compared with $645-billion in 2013.

“On a yearly basis, the mining industry has just suffered its fourth consecutive year of declining net milestone values,” the report highlights.
However, according to the company’s PAI, initial resource announcements and completed financings improved in December, but this was not enough to offset the seasonal slump in drilling.
“Junior and intermediate companies’ fundraising more than doubled from November to $334-million in 49 financings, as some explorers cashed up for the coming season. Despite the month-on-month increase, December’s total fell short of the $463-million raised in December 2013, and was the lowest December total since before SNL began tracking financings in 2008.”

The 2014 total of $5.55-billion in 329 financings was “moderately” short of the $5.92-billion in 399 financings in 2013.

There were four initial resource announcements in December, with a total on-site value of $11.79-billion derived mostly from Canadian mineral exploration company NGEx Resources’ $4.3-billion Filo del Sol project, in Argentina.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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