Professional services firm SNL Metals & Mining’s Pipeline Activity Index (PAI) slumped to 40.8 in April, approaching the all-time monthly low of 40.2 recorded in 2014.

However, in spite of the weakness in metals prices, the PAI rose in June, but this was insufficient to offset the low numbers in April and May, leaving the PAI for the quarter as a whole at 44.3.

By early August, SNL had captured production announcements for the June quarter from over 200 companies, including 104 gold producers, 74 copper producers and 18 iron-ore producers.

“If the announcements by these companies turn out to be representative of all producers, then there has been an increase in production for all three metals in the June quarter, compared with both the three months to end-March and the 2014 June quarter,” reports SNL’s State of the Market snapshot for the June 2015 quarter.

Mergers and Acquisitions

The number of merger and acquisition deals registered on SNL’s database increased to 35 in the June quarter, compared with 23 in March. The value of these transactions for precious and base metals more than doubled from the previous quarter’s $2.93-billion to $6.59-billion.

SNL says that this is “comfortably ahead” of the $1.8-billion recorded in the 2014 September quarter but is still short of the $11.1-billion achieved in the 2014 June quarter.

Mining Finance

Over $5-billion in financing has been recorded so far on the SNL database for the June quarter for 732 projects, compared with 586 projects in the March quarter. The amount raised, as reported by early August, increased to $11.2-billion, compared with $10-billion in the March quarter.

SNL notes that this funding is still low, however, compared with the $15.4-billion raised in the December 2014 quarter and the (restated) $25.4-billion in the September 2014 quarter.

In the previous State of the Market publication, covering the three months to end-March 2015, SNL reported on a decline in metals prices and production, but an improvement in projects reporting drilling activity.

However, SNL now reports that there has been something of a reversal in the June quarter, with a decline in drilling activity but an increase in the production of gold, copper and iron-ore.

The June quarter also saw an increase in the value of initial resources, a significant rise in the level of mergers and acquisitions and a small improvement in financing. The latter, however, has not led to an increase in aggregate cash holdings, which appear to have fallen between the end of March and end-June.

“Last year was probably the worst for mined commodities since 2008, and the trend has continued,” SNL notes.

The three months to end-June 2015 was another challenging quarter, with an overall fall in the price of five of the eight constituents (gold, molybdenum, nickel, platinum and silver) of the SNL metals price index but an improvement in the price of three (cobalt, copper and zinc). As a result, the SNL index fell to 103, compared with 107 at the end of March.

Exploration

The falling metals prices were reflected in the lower level of global drilling activity in the June quarter, with 363 projects reporting results, compared with 380 in the March quarter and 418 in the December 2014 quarter.

“However, total drilling activity during the second quarter of 2015 was 8% higher than for the corresponding period in 2014,” SNL’s State of the Market snapshot concludes.