[Chart] Outlook on Junior miners: is it doom, gloom or boom?
It’s been a tough year for the mining industry as some of the biggest names in the sector have experienced massive financial losses. For junior miners, 2015 has been a hellacious ride.
In its latest Junior Mine 2015 report, PwC takes a look at the Top 100 junior mining companies traded on the TSX Venture exchange. The report found that the average market caps of exploration companies is down 51.2 percent from 2014 to 2015, and the amount of money raised in equity and debt markets for exploration companies is down 33.4 percent over the same time period. To make matters worse, the average company on the Top 100 list has approximately $7 million cash on hand, which is down from $10 million the previous year.
• Related content: Valuation of mining industry falls below $1 trillion: report
However, there could be signs of life to come. Data collected over the last two months shows that market conditions of junior miners hasn’t any gotten worse, and could potentially be getting better.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.