Canadian mining equities laser-focused on cost management despite uptick in performance

Sources available to offer insight on Q3 Canadian mining and metals trends

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(Toronto, November 7, 2013) Canadian mining equities witnessed a slight improvement in performance during the third quarter, but cautious investor sentiment remains, according to EY’s Canadian Mining Eye: Q3 2013.

The index — which tracks Canadian mining sector performance of 100 TSX and TSXV mid-tier and junior companies with market capitalizations between $1.4b and $55m in Q3 — increased 5% in the third quarter, but has fallen 50% in the past 12 months.

Despite moderate improvement, the near-term performance of the sector remains unclear — especially with an uncertain outlook for metal prices reducing investor interest.

Mining companies are continuing to respond to softer prices by trimming their input costs and rationalizing their asset portfolios. Yet managing cost remains very challenging for majors and mid-tier companies.

Many looked to joint ventures to manage cost, optimize assets and drive operational efficiency in the face of restricted access to capital, cost pressure and cash burn in Q3. Companies are now also turning to the following cost management efforts:

  • Cease or delay of expenditures
  • Alternative financing options
  • Non-core asset disposals

EY’s Canadian mining and metals team is available to offer insight into the report’s findings. To reach a spokesperson, or for more info, please contact a member of our national PR team.

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