Sources available to offer insight on most recent mining and metals results
TORONTO, May 28, 2015 /CNW/ - EY's Canadian Mining Eye index fell 1% in Q1 2015, compared to a 12% decline in Q4 2014. With a weak global macroeconomic backdrop, most players are working on controlling expenses, as declining grades will put continued pressure on costs.
"Things like fluctuating commodity prices, stretched balance sheets and exploration shutdown are all challenging miners," says Bruce Sprague, EY's Canadian Mining & Metals Leader. "But with challenges come opportunity. We're seeing many mining companies putting efforts into streamlining inventory, optimizing working capital, divesting non-core assets and strengthening their focus on portfolio management."
The Canadian Mining Eye: Q1 2015 highlights the following trends:
- Base metals experienced negative returns due to weak Chinese demand.
- The iron ore price index was down by 28% to US$51.40, the lowest since 2005.
- Companies are aiming to reduce capex, lower costs and strengthen their balance sheets in order to survive amid falling commodity prices.
- The valuation differential between precious metal producers and developers helped to stimulate M&A activity.
- During the period of higher gold prices in January, there was a surge in bought-deal financing activity.
The Canadian Mining Eye tracks Canadian mining sector performance of 100 TSX and TSXV mid-tier and junior companies with market capitalizations at the end, broadly falling between CDN$2.1b and CDN$160m.
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SOURCE EY (Ernst & Young)
EY's Canadian Mining & Metals team is available to offer insight into the report's findings. To reach a spokesperson, or for more info, please contact: Erika Bennett, [email protected], 403 206 5157; Sasha Anopina, [email protected], 416 943 2637; Julie Fournier, [email protected], 514 874 4308
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