Canadian mining equities down 45% year-over-year according to Q4 Canadian Mining Eye
Sources available to offer insight on fourth quarter and year-end results
(Toronto, 6 February 2014) Canadian mining equities witnessed a 45% decrease in market capitalization over the course of 2013, according to EY’s Canadian Mining Eye: Q4 2013.
The index decreased 9% in Q4 alone as concerns around global economic growth and uncertainty surrounding the Federal Reserve stimulus program continued.
Declining metal prices also spurred significant write-downs in the value of assets across the sector. Companies were reluctant to raise equity capital on dilutive terms and witnessed less capital readily available in a soft market. Total proceeds raised were approximately $6.9b, down 49% compared to the same period in 2012.
Though these market forces are already setting the stage for a modest year of transaction activity, growth opportunities continue to exist for companies across the sector. In 2014, expect:
- Majors to continue disposing of non-core assets
- Mid-tiers with cash flexibility to take advantage of inorganic growth opportunities
- Juniors with good quality assets and de-risked projects to attract buyer interest
The Canadian Mining Eye index tracks Canadian mining sector performance of 100 TSX and TSXV mid-tier and junior companies with market capitalizations between $1.6b and $100m.
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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