The recently published Monthly Industry Monitor, based on insights from the SNL Metals & Mining database, an offering of S&P Global Market Intelligence, indicates a continued momentum in drilling as we entered the final quarter of 2016. Despite the strength in drilling programs, however, the Pipeline Activity Index eased off in October, from 81 to 80, as an increase in project milestones was offset by drops in initial resources and financings.
Global drilling activity held steady in October. Overall, the total number of distinct projects reporting drilling remained at 217, up from a low of 103 in March, and 27% higher than in the year-ago period. The continued strong showing was mainly due to gold, with the highest number of projects, 138, reporting gold assays since the SNL Metals & Mining database began tracking drill results at the beginning of 2014. However, the largest percentage increase last month was in zinc-lead, which rose 31% from September. The number of silver assays also increased, copper and nickel were unchanged, and there were no reported drill results for PGM or minor base metals. The only target group with decreased drill activity was specialty metals, where the number of reported assays was down 23% month-on-month, from 31 to 24.
The North America region hosted 40% of the projects reporting drilling in October, up from 37% in September, with a further 25% in the Asia-Pacific region. Latin American projects accounted for 15% of the total, and Africa’s share increased to 11% from 8% in September. Canadian exchanges listed 53% of the companies reporting drill results in October, and 39% were on the Australian Securities Exchange.
The number of initial resource announcements fell in October to one from four in September, but the US$50.73 billion value was up 127% from US$22.35 billion recorded the month before. The sole October resource announcement was for the Kamoa-Kakula discovery in the Democratic Republic of Congo, a joint venture between Ivanhoe Mines (47%) and Chinese miner Zijin Mining (47%). Mining activity tracked by project milestone rose for the second month in a row after a collapse in August.
The number of positive milestones increased from seven to nine, although the combined value of those milestones decreased slightly to US$26.39 billion from US$28.31 billion in September. Seven of October’s positive milestones were production startups, with six new mines, one expansion, and two projects in pre-production for new mines. There was only one negative milestone: the closure of Glencore's Mt Isa (Black Star) zinc operation in Queensland.The number of financings by junior and intermediate companies fell sharply in October to 168 from 210 in September, and a high of 304 in June. However, the total amount raised increased slightly last month to $400 million from $399 million in September, ending a slide from July’s two-year high of US$1.40 billion. Toronto-listed companies accounted for 52% of the raisings, compared with 63% in September. ASX-listed firms raised 29% of the total. The rest were distributed across the London, New York, and other exchanges.
Data covered in this article is based on the SNL Metals & Mining database, unless stated otherwise.