Canadian Mining Equities Slight Improvement

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Left to Right (Jim Madder, President, Confederation College; Paul Parisotto, Chief Executive Officer, Noront Resources Ltd. and David Paul Achneepineskum, CEO, Matawa First Nations Management. Courtesy of Jason Rasevych.
Left to Right (Jim Madder, President, Confederation College; Paul Parisotto, Chief Executive Officer, Noront Resources Ltd. and David Paul Achneepineskum, CEO, Matawa First Nations Management. Courtesy of Jason Rasevych.

Mining News Cliffs Natural ResourcesMining Prospects Play Huge Role in Economy

THUNDER BAY – Mining – Growth in the mining sector is considered key for the economic future in Northwestern Ontario. International markets, prices for minerals and the overall health of the global economy must all come together in order for the mining sector to prosper.

According to Ernst and Young, “Canadian mining equities witnessed a slight improvement in performance during the third quarter, but cautious investor sentiment remains. The Canadian Mining Eye index increased 5% in Q3 2013, but has fallen 50% in the past 12 months. Approximately half the index constituents are gold companies, and in that context we note that gold prices witnessed a moderate recovery during Q3, underpinned by increased demand following speculation of US intervention in Syria. Further, gold prices were supported by the US Federal Reserve’s decision to abstain from decreasing the pace of monthly bond purchases. As the US debt ceiling deadline loomed, gold prices continued to react to changing sentiments around the political machinations”.

Following the short-term agreement to raise the US debt ceiling, Dagong Global Credit Rating Co. cut its local and foreign currency credit rating for the US to A- from A. This again helped to underpin gold prices. With muted investments across the mining sector, capital access remains challenging for mining companies.

“Despite a moderate improvement in the Canadian Mining Eye index this quarter, the near-term performance of the sector remains uncertain,” according to the EY’s latest Eye on Mining. “Mining companies have and continue to respond to softer prices by trimming their input costs and rationalizing their asset portfolios, while debt levels on their balance sheet continue to pose risk. While the sector continues to face headwinds in raising capital, mining companies have started to focus inward on their operations”.

“Companies are preparing themselves for the near- term challenges due to decelerating metal prices. Most miners’ finance teams are working closely with operations management to plan scenarios to manage downside metal price risks. The debt market witnessed a few fundraising deals in the sector, but accessing debt capital at favorable terms will be increasingly tough going forward if market capitalizations continue to erode. With the near-term outlook for precious metals remaining cautious, investors continue to be restrained. In these uncertain market conditions, we look forward to seeing mining companies sustain portfolio growth and be innovative in their approach to tap any potential funding opportunities available in the market”.

Labour Opportunities for Northwestern Ontario

The Ring of Fire Training Alliance is working to build capacity for Matawa First Nations people to gain the skills needed to have a career in mining. Hundreds of students in the programs being run in Thunder Bay and in Matawa First Nation Communities across the north will be trained.

However the numbers of new apprenticeships and training opportunities in the rest of Northwestern Ontario are lagging behind the potential demand. 

The North Superior Workforce Planning Board has been outlining some of the issues facing the region in terms of labour issues. 

Energy Capacity for Mining in Northern Ontario

At the recent Thunder Bay District Municipal League, Iain Angus presented the case for more power capacity for Northwestern Ontario.

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