The CIM Conference and Exhibition, themed Energy and Mines, was greeted with cool May weather, but that must have been Mother Nature’s way of striking some balance to the red hot resource and metals market. The opening ceremonies were started with Montreal’s Highland Regiment’s bagpipers and with mining and political delegates. This was followed by a three-hour opening night of cocktails and dinner mixer in the exhibition. That was a great way to start what was going to be quite the successful CIM conference.
As a financial newsletter writer, I was seen as a little out of place in a conference that was primarily for service providers and engineering groups. I was there to keep up with what I call the supply side of the resource market. One would think that the supply side would be the end consumer, but in this case it is those who are supplying services to the exploration and mining companies.
One glaring conclusion came to my mind a very short time into the conference: there is a supply side shortage. I talked to a couple of consulting firms that did 43-101s, feasibility studies, and so forth, and they were all saying that they were inundated with work. This to me was a sign that this economic cycle was alive and well.
The attendance was fantastic - at lunch both days, there was barely any place to stand and eat, let alone sit and eat. Similarly, in the technical session rooms it was standing room only. Another sign that this economic cycle is in its early stages is there is still a lack of youth in the ranks of the service providers. The majority of the people are professionals that are very well experienced.
While walking up and down the aisles of the exhibition I couldn’t help but notice all the simulators for front-end loaders, bulldozers, and other machinery. Further, a surprising portion of the exhibitors were technology companies and software companies that had developed mining-specific products to maximize output and to minimize costly inputs such as labour. Some of the prevailing ones were GPS-based systems that would literally run a machine from the downtown Vancouver office. Another theme was content management systems for inventories, time logs, and so on. This again is an indicator of another phenomenon that I had discussed in some of my articles in the www.wcmsnewsletter.com, relating to the relative scarcity. The resources are getting more and more costly to extract. This is due to two main reasons: inputs such as labour technology are getting more expensive and specialized. The actual mineral is appearing in lower concentrations. This brings with it such things as higher strip rations and more waste, which adds up to higher extraction costs as well. Technology has been and will play a larger role in mining, and there are striking opportunities in that sector of the mining industry.
One other part of the conference that was very enlightening to attend were the technical papers. These were presentations from various companies that had projects in Quebec and beyond. They offered great insight into the exploration and mining dynamic and mineral abundance in Quebec and across Canada. As well, the Quebec provincial government has great tax incentives though flow-through shares for exploration work done in Quebec There are several prolific areas for mining such as the Val-d’Or camp, the Abitibi region, and more. Two particular subjects of note were the iron ore presentations and the nickel presentations. They gave depth to some very robust sectors of the resource market. Adriana (ADI.V) and Baffin Island (BMI.V) both spoke about their iron projects, and Knight Resources (KNP.V) spoke about their Raglan nickel project, just to name a few.
Victor Goncalves is the president and chief analyst of the WCMS newsletter.