Canada’s Mining Execs Bullish: MRG in Vancouver Sun

Canada’s mining executives bullish on future
By Scott Simpson, Vancouver Sun January 5, 2010

VANCOUVER — Canadian mining executives are rapidly shedding anxiety about the economy in favor of bullish sentiments about the industry’s immediate and long-term prospects, according to a new survey.

Mining Recruitment Group surveyed executives with 74 companies, including substantial representation from British Columbia, and found that 70 per cent expect the industry will perform better this year compared with 2009.

Even more, 78 per cent have a strongly positive outlook on the industry over the long term, the group reported in its annual mining executive survey.

Gold, copper and uranium were the metals perceived to have the greatest upside for price in the coming year — although 71 per cent expressed either caution or extreme concern over the volatility of commodity prices.

“Sentiment is as high as I’ve ever seen it,” Mining Recruitment Group president Andrew Pollard said in an interview Tuesday.

“This time last year we did the same report and … at that point 85 per cent of them were bearish. Now only nine per cent are bearish to any degree over what’s going to happen over the next year.”

“There is less fear out there.”

Respondents expect easier access to capital compared to last year, when many companies had to shed employees and curtail or cancel the drill programs that are integral to new mine development.

Eighty-seven per cent anticipate that mineral exploration and project development activities will expand in 2010, and 68 per cent of respondents anticipate spending more on exploration and development.

Thirty-eight per cent indicated they will spend more on staffing, including new hires and salary-cut reversals.

“People have more of a focus on tomorrow, as opposed to just getting through today,” Pollard said.

“The first place they want to spend money is putting it in the ground, in exploration and development, and getting some of their capital projects underway again.”

The survey also found that 39 per cent of companies are actively seeking acquisitions.

“Some companies are still in a bit of a bind, still looking to shed some assets and get cash in that way — so acquisitions will be also be a key part [of activity in 2010].

“There is a lack of good projects available and a lot of companies after the same sorts of things, so there is going to be a war to see who can complete the deals,” Pollard said.

Meanwhile Vancouver-based Teck Resources more or less confirmed the sentiments uncovered in the survey, announcing on Tuesday that its Antamina copper-zinc mine partnership will spend close to $1.3 billion this year to expand production by about 30 per cent.

Teck has a 22.5-per-cent interest in the Peruvian mine, one of the world’s largest copper-zinc producers, and in the last fiscal year earned an operating profit less depreciation of $231 million US from Antamina.

“We believe that demand growth in copper is going to be very strong and the world is going to have trouble keeping up with supply to meet that demand, so we believe the market is going to be pretty tight,” Teck Mining vice-president for investor relations Greg Waller said in an interview. “We are quite bullish on the demand for copper and the pricing that is going to result from that.

“The project has got to the point just in the last few months to bring this expansion proposal forward to the partners, and the partners are obviously all on board for wanting to proceed at this time with it.”

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