Canadian Mining Eye index sees first gain in a year: EY

Sources available to offer insight on most recent mining and metals results

TORONTO, Aug. 24, 2015 /CNW/ - The Canadian Mining Eye index gained 4% during Q2 2015 as compared to a 1% decline in Q1 2015. This was the first quarterly gain since Q2 2014.

"While Canadian mining equities continued to face downward pressure due to weakness in metal prices, a few companies surprised investors with better-than-expected financial results, higher production data, accretive acquisitions and steady progress on planned projects," says Bruce Sprague, EY's Canadian Mining & Metals Leader. "While companies remain cautious about their capital expenditure and are focusing only on high-return, priority investments – that strategy seems to be paying off."

The Canadian Mining Eye: Q2 2015 highlights the macro-economic concerns companies are dealing with that have contributed to a further slide in Q2 2015 prices, including:

  • A strong US dollar bolstered by the expectations of a US Federal Reserve interest rate hike, lower global inflation expectations and weak physical demand in China put pressure on gold.
  • Gold was also hit by the latest Greek bailout plan, which eased fears of Greece exiting the Eurozone, drying up safehaven purchases.
  • Weak Chinese demand and the Greek crisis led to a continued slide in base metals.

EY's report also features an interview with Aaron Regent, Founder and Managing Partner of Magris Resources, where he shares his perspectives on the industry. As part of that interview, Regent told EY, "For the industry overall, one of the top challenges over next few years will be managing through an environment of low commodity prices, which could last for some time. Companies will need to be very cost-conscious and to take steps to protect their balance sheets. Mining is a cyclical business and prices will recover at some point but it is always difficult to predict when."

The Canadian Mining Eye tracks Canadian mining sector performance of 100 TSX and TSXV mid-tier and junior companies with market capitalizations at the end, broadly falling between CDN$2.1b and CDN$160m.

About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY is proudly celebrating 150 years in Canada. For more information, please visit ey.com/ca. Follow us on Twitter @EYCanada.

EY refers to the global organization and may refer to one or more of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

SOURCE EY (Ernst & Young)

For further information: EY's Canadian Mining & 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, 403 206 5157; Sasha Anopina, sasha.anopina@ca.ey.com, 416 943 2637; Julie Fournier, julie.fournier@ca.ey.com, 514 874 4308

RELATED LINKS
http://www.ey.com

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890