PDAC Convention; What I Learned Meeting with Mining Companies
This week, I attended the Prospectors & Developers Association of Canada (PDAC) International Convention. It’s where the Who’s Who of the mining industry go to meet and talk about the industry. It’s the place to be if you want to know what’s happening in the mining sector, to say the least.
I have been going to the PDAC convention for several years now. If I recall correctly, this year was my sixth year attending.
Why do I go to the PDAC convention? Mind you, it isn’t the only mining conference I attend; I go to several others on a yearly basis. I do this to see what’s happening in the mining sector. What’s more, you get to speak with mining companies directly and listen to what they have to say.
I would call the PDAC convention the mother of all mining conferences. Usually, about 1,000+ junior and senior mining companies are there, plus about 25,000 attendees. You get the perspective of mining companies, investors, and analysts. You also get to see if there any new technologies that could make mining better and easier.
Over the past few years that I had been attending this conference, the atmosphere had been dismal. You would see mining companies there, but not much excitement among them. You could clearly see that the whole sector was struggling. How so? I paid attention to the money that mining companies spent on their marketing materials—the so-called “swag.”
Keep in mind, a lot of investors come to this conference as well, so mining companies give out free stuff to lure investors to their booths. However, there wasn’t much of that recently. Put simply, it was very evident that companies were watching their expenses very closely over the past few years.
How Was the PDAC Convention This Year?
This year, there was certainly something different.
In the investors exchange area (where mining companies had booths), it was actually crowded. The atmosphere was upbeat rather than, “Hey, we are trying hard, and hoping gold and silver prices go higher.”
I talked to several mining companies I follow closely, plus a few others that I am looking out for. They actually talked about business, as well as about how they are focused on improving costs and trying to improve their cash situations. They also discussed how they are taking time to look for more metal (exploration).
It was definitely more about how they can improve themselves this year, rather than being dependent on gold and silver prices.
Dear reader, I clearly saw how the sell-off between 2013 and 2015 was a blessing in disguise. When the previous bull market began, mining companies forgot that they had to be a business. They made “profits” because the thing they were extracting from the ground was increasing in value. They were reckless about their costs and their liquidity situations. The sell-off was a reality check for them.
Mining companies are starting to realize they can’t keep the old ways in place and remain in business for the long term. So they are adapting. Miners realize they need to watch costs and cash at hand, and this is really good. They realize that they are a business, and “when the going gets tough, the tough get going.”
They are starting to spend money on exploration as well. Keep in mind, exploration is an investment in future production. So, this is also good.
Going to the PDAC convention this year was definitely a great idea. It made my convictions stronger; if gold and silver prices increase in value, some mining companies could be providing better returns than they did in the previous bull market.