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 But this year's gathering of the Prospectors and Developers
Association of Canada (PDAC) is a more subdued affair, with lavish
spreads and grand lodgings increasingly giving way to cheese
platters and Airbnb rentals.
After a years-long downturn in the mining sector - and with little
relief in sight - the 2015 convention, which runs through Wednesday,
has lost some of its glitz.
“We’re seeing far less prime rib, far more chips, far more salsa,"
said Benjamin Cox, chief executive of explorer Aston Bay Holdings
Ltd.. "I’m really depressed that I have to drink bourbon versus
single malt scotch, it just doesn’t do it for me.”
Striking a more serious note, Cox also summed up the overall mood of
the miners: "Everyone is panicked in the industry. If you are not
humbled this year, whether you work for a major or a junior or
anyone in-between, you are insane."
Junior mining firms, which specialize in exploration and
development, have been hit especially hard by falling metal prices.
Spending on global exploration for non-ferrous metals dropped to
$11.4 billion in 2014 from a $21.5 billion in 2012, SNL Metals &
Mining estimates.
Although final attendance numbers have not been released, event
organizers expected between 20,000 and 25,000 participants this
year, down from a peak of some 30,000 participants during boom
times. Mining firms are reluctant to miss the event entirely, since
relationships that start at PDAC often translate into deals or sales
down the road. But they say they are trimming where they can.
Aston Bay, which saw its agreement with Chile's Antofagasta
terminated after copper prices soured, cut its attendance to three
from seven people and used online home-rental marketplace Airbnb to
find a two-bedroom condo to house attendees. It has even cut the
number of fact sheets it hands out.
Bruce McDonald, executive vice-president at analytic services
provider ALS Ltd., said he found this year's gathering "a little bit
depressing," but a sign of the times. "Flat is the new up," he said.
In past years, miners have vied for prime booth space on the main
floor. This year, PDAC opened up the floor to a wider range of
exhibitors, including suppliers, financial firms, and even pipeline
company TransCanada, which is touting the merits of its Energy East
project. Even so, there was empty exhibition space.
FEWER INVITATIONS
But a common theme expressed by attendees was the decline in
parties. "People are definitely indulging less," said Adam Stratton,
an executive at Realterm Energy. "Normally, I'd have invites to
anywhere from five to 10 events a night, and now it's probably half
that."
Century Iron Mines, which has C$40 million ($32 million) in working
capital, moved its party from Toronto's historic Fairmont Royal York
hotel - a hub for PDAC socializing - to its downtown office.
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At the makeshift bar set up on a reception desk, a project manager
poured the drinks as guests mingled in the brightly-lit board room
and corridors.
Ken Cunningham, chief executive of explorer Miranda Gold, said he
tries to be smart about spending after watching "an awful lot of
people that have been unemployed for a long period."
An annual shareholder dinner has been scaled back to six from 50
invites and moved to a more modest Portuguese restaurant, Cunningham
Said, and the company is hosting its PDAC booth for just two days of
the four-day conference.
Renaissance Gold is cutting back, too. The company has opted to use
free meeting rooms rather than paying to reserve space. And
Renaissance executives have slashed salaries to stretch cash, said
executive chairman Ron Parratt. The mining executive did well during
more flush years, but recently has cut his own pay from $100,000 to
$60,000 and then $24,000.
Renaissance has scoured its overall operations for savings, taking
such measures as donating or discarding unneeded rock samples to
save $3,000 in monthly warehouse fees.
"You don't want to leave anything untouched", Parratt said.
Another indication of tough times is the relative dearth of news
from Canadian miners leading up to PDAC. In the first seven weeks of
the year, miners typically issue streams of press releases about
exploration results and fund-raising efforts ahead of the busy
spring drilling season.
But data from a top Canadian press release service indicated the
news flow from Canadian miners has dropped by more than half in the
last four years.
"Everyone is pretty damn depressed," Aston Bay's Cox said. "I moved
my company into a basement in Vancouver, Washington. This is a
recession, I have no pride."
($1 = 1.2454 Canadian dollars)
(Editing by Jeffrey Hodgson and Susan Horton)
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