Canadian mining equities down 45% year-over-year according to Q4 Canadian Mining Eye: EY

Sources available to offer insight on fourth quarter and year-end results

TORONTO, Feb. 6, 2014 /CNW/ - 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.

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SOURCE EY (Ernst & Young)

For further information:

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:

Erika Bennett
erika.bennett@ca.ey.com 
416 943 5497

Sarah Shields
sarah.j.shields@ca.ey.com 
604 648 3607

Julie Fournier
julie.fournier@ca.ey.com
514 874 4308