Mining and Exploration Slow Down – Long Term?

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By peterc on February 8, 2016. No Comments

New Gold Blackwater

 

Exploration and mining has hit a slow down that has never been seen before. It should be back this summer. Wait till PDAC and then you will see the money flow! – overheard by a 30some year old geologist at Round Up 2016

Ok there was some free beer at Round Up but compared to the past number of years, I picked a good time to cut back on my “cheap free beer” diet. In relation to the comment by this 30some year old, mining is not coming back immediately and PDAC is not the answer. Commodity prices are down. How much are they down (all prices in US $)

July 2011               Feb 2016
Copper          $4.30                      $2.00
Silver             $31.00                    $15.00
Moly              $18.00                    $5.40
Gold               $1850.00              $1100.00
Nickel           $13.00                    $4.00
Zinc                $1.10                       $0.78
Iron Ore       $187.00                 $50.00
Coal                $810.00                 $400.00
Oil                   $120.00                 $30.00
Natural Gas $4.30                      $2.00
Mines are shutting down (Huckleberry, Endako, Brule) and other projects with ready to go operations (Kitsault, Blackwater) are being delayed with put into care and Maintenance.

There are some new projects that have taken advantage of the current situation to lower operating costs and gain an advantage on the marker with new production and development (Red Chris, Pretium and Silvertip)

SO what does this mean for exploration? Last year was slow. Expect this year to be slower. The projects that tend to have some excitement for moving forward this summer tend to be gold focused. (Barkerville, Skeena, Gold Reach).

This is part of the major up-and-down cycle of commodities. Get used to it. It has always been there and will be there also in the future.

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