When the world’s miners head for Toronto each year to attend their industry’s annual conference, they arrive with certain expectations. They’re accustomed to finding oyster bars, rowdy parties, open bars with high-end liquor and elegant hotel suites.
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 $US11.4 billion in 2014 from a $US21.5 billion in 2012, SNL Metals & Mining estimates.
Although final attendance numbers have not been released, event organisers 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.
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$40 million ($US32 million) in working capital, moved its party from Toronto’s historic Fairmont Royal York hotel – a hub for PDAC socializing – to its downtown office.
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 $US100,000 to $US60,000 and then $US24,000.
Renaissance has scoured its overall operations for savings, taking such measures as donating or discarding unneeded rock samples to save $US3,000 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.”
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