JOHANNESBURG (miningweekly.com) – Following a comparatively larger gain of 42% in the second quarter, financial services firm EY's Canadian Mining Eye index gained a modest 4% during the third quarter, which EY Canadian mining and metals leader Jim MacLean attributed to an increase in the price of base metals.
“The earnings are accentuated by more production and lower all-in sustaining costs. As mining companies also start to embrace digital technologies to improve productivity, we're seeing costs come down even more,” noted MacLean.
The third-quarter further suggests that gold prices will continue to be a safe-haven asset amid global macroeconomic challenges.
Some of the key commodity changes in the third quarter included zinc prices rising by 13%. This is expected to gain further traction as zinc continues to operate in favourable market conditions.
Nickel prices rose 12% in the quarter under review, following an 11% increase in the second quarter, while copper prices were flat in the third quarter and are expected to remain under pressure for the rest of the year.
Meanwhile, EY's mining and metals transactions leader Jay Patel highlighted that the outlook for the Canadian mining sector in general was positive. "We're seeing considerable investment in new and pending projects – on top of a general rebound in the commodities market. The sector is in a much different place now than it was a year ago," he said.
The report also features an interview with Dundee Precious Metals president and founder Rick Howes who discussed strategies for embracing digital mining opportunities, as well as how innovation is leading to reinvention in the sector.
"Technology is advancing to the point that we can apply it to our operations without a significant amount of investment. It has the potential to transform many aspects of our industry,” he noted.
EY's Canadian Mining Eye index tracks the performance of 100 TSX and TSX-V midtier and junior companies with market capitalisations that fall between C$1.6-billion and C$47-million.