Weak finish for the Canadian Mining Eye Index in Q4: EY

Sources available to discuss index growth

TORONTO, Feb. 13, 2017 /CNW/ - EY's Canadian Mining Eye index declined 13% during Q4 2016. This is predominantly due to weakness in gold and nickel prices, offset partially by gains in both copper and zinc prices. For the full year 2016, the Canadian Mining Eye index rose 61%, which was better than 18% gains in S&P/TSX composite index.

"The outlook for the Canadian mining sector remains healthy," says Jim MacLean, EY's Canadian Mining and Metals Leader. "The recovery of commodities prices in the latter half of 2016, paired with improved productivity and global geopolitical factors means we can anticipate more sustainable growth in 2017."

EY's Canadian Mining Eye: Q4 2016 suggests investors will continue to view gold as a safe haven investment, given the uncertainty surrounding various policies and plans under the Trump presidency.

  • Gold prices remained subdued by declining 12% in Q4, a recent weakness that can be attributed to oversupply market conditions
  • Copper prices increased 14% in Q4 due to anticipated increase in infrastructure spending by the US
  • Zinc prices increased 8% in Q4
  • Nickel prices declined 5% in Q4

"Gold is now accepted as an investment in Islamic finance," says Jay Patel, EY's Mining & Metals Transactions Leader. "With this adoption, the potential demand for gold and gold-based investments is expected to increase. This would help to improve supply-deficit market conditions and push gold prices above those in 2016."   

Special section – Q&A with Nolan Watson, President and CEO of Sandstorm Gold Ltd.

EY's report also features an interview with Nolan Watson, President and CEO of Sandstorm Gold Ltd. Watson discusses capital markets in the mining sector, and the role streaming deals will play in the market in 2017.

Watson told EY: "I think innovation in financing is why we exist. It's important to me that we're always staying relevant and changing the way we do things to get streams and royalties."

Read more about Watson's perspective on the streaming industry and how he's positioning Sandstorm to be successful, in the full interview, here.

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$1.6b and CDN$47m.

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 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: Sasha Anopina, sasha.anopina@ca.ey.com, 416 943 2637; Julie Fournier, julie.fournier@ca.ey.com, 514 874 4308; Victoria McQueen, Victoria.mcqueen@ca.ey.com, 416 943 3141


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