Looking To The Future

The dust is still settling, after the near collapse of the global financial markets. Now we must all try to adapt to the resulting new global realities. The approaches we take may well decide the future success, or lack thereof, of all prospectors and developers.

“Business as usual” is no longer a workable option. Junior and major companies alike need to adapt and evolve, to better manage the divergent forces confronting the industry as a whole. These companies need strategies to address issues such as access to financing, corporate social responsibility, societal acceptance, benefit sharing, resource nationalism, local skills shortages, research-innovation needs, lack of new discoveries, lack of global guidelines and standards, transparency, political instability and terrorism.

There are no easy answers. The PDAC, as always, strives to assist and support its membership — explorers and developers alike — all over the world by providing access to the latest information, supporting initiatives and advocating on their behalf. Keeping them abreast of global trends helps to provide the input they need in order to make the decisions deemed most appropriate for themselves and their organizations.

While attendance of more than 18,000 at the 2009 PDAC International Convention did not quite meet the record-setting 2008 attendance of 20,000, it nevertheless confirmed to our membership the benefits and importance of being at this event. We expect a similar attendance in 2010 as now, more than ever, members are looking for answers as they face an ever-more complex environment.

The convention venue, now in its third year in the South Building of the Metro Toronto Convention Centre, continues to provide ample room. The Investors Exchange of more than 600 exhibitors is fully booked again this year, as is the Trade Show, also housing more than 340 exhibitors. Our sponsorship drive has reached its initial goal and new sponsors have stepped forward.

In October 2009, I attended the China Mining conference in Tianjin. There was a notable trend towards outward thinking by Chinese companies and many people talked about coming to the PDAC. Some companies are positioning themselves for joint ventures and mergers by starting to adopt international standards; others on the acquisition trail are recognizing the importance of international standards as due diligence tools.

Canadian explorers and developers are well-positioned in all these areas and I expect there will be many new delegates from China attending the PDAC this year as they look for potential opportunities.

The PDAC convention has, through the years, succeeded in remaining current and relevant by providing the technical content, networking opportunities and venue that our members and the global exploration and the development community have told us they want. The PDAC’s efforts on behalf of explorers and developers in launching the new e3 Plus: A Framework for Responsible Exploration has boosted Canada’s reputation worldwide as a source of expertise for responsible mineral exploration, development and financing, and has helped to make this convention the one to attend.

The economic downturn has not altered the overall fundamentals underlying the global mining industry. The speculative market sector is already rebounding. The recent strength in the base metals reflects the reality of the ever-increasing global need and demand for metals and mineral products. At the same time, the increased gold price, which has been the main industry-driver over the past year, reflects the significant degree of uncertainty that overshadows the global economic recovery process.

The next decade is expected to be one of uncertainty and change. We see signs that the massive financial support packages that the U.S., Canadian, European and Chinese governments have implemented are beginning to take effect. Their sustainability, however, especially in Europe and North America, is in doubt as many countries have signalled that continued or additional stimulus, though still needed in many areas, may not be forthcoming.

Demand will continue to be steady for mineral resources, such as bauxite (aluminum), iron and base metals, as well as sand, gravel and cement; energy products such as uranium, coal and natural gas for electrical power generation; and fertilizer products. These are the reserves that China, India, Brazil and several African countries require as they build infrastructure to accommodate population migration to cities and to improve their peoples’ standard of living. We also expect to see an increased demand for specialty metals used in the high tech sector and innovative research.

China and India will be the most important resource commodity consumers and they will continue to assert their influence on the global economy. Smaller nations will continue to reposition themselves to benefit from this reality through their natural resources.

All of this is happening in the context of the new global realities affecting all industry sectors. Advances in communications have connected us worldwide and, sometimes reluctantly, we are beginning to accept that the consequences of our actions or intended actions are coming under global scrutiny. Technical project feasibility is rapidly becoming secondary to societal project acceptance. These increased challenges to project success have underscored the importance of proper project risk analysis and the importance of global performance standards such as e3 Plus: A Framework for Responsible Exploration.

Canadian miners, explorers and developers, who are already recognized for their global expertise and mine financing know-how, are expected to be in high demand as many countries or groups wishing to take advantage of that expertise seek them out. What better place than the PDAC International Convention to make these connections?

This year’s convention will commence with workshops that begin on Friday, March 5 (pre-convention) and run through the 4 official days of the show. The workshops will deal with building relationships with aboriginal groups, uranium geology, investment fundamentals, strategic communication, current best practices, TMX guidance on connecting with capital markets, understanding NI 43-101 and technical reporting, structural geology and corporate social responsibility in exploration.

Also scheduled for March 6 will be the inaugural Mining, People and the Environment conference. This is a joint one-day presentation, sponsored by Aspermont (publishers of the Mining Journal), the International Council on Mining and Metals and the PDAC. It will focus on crucial concerns, opportunities for best practice and challenges for the exploration industry. The conference will also incorporate the former World Mines Ministries Forum.

On Sunday, March 7, there will be an added attraction to the traditional Commodities and market outlook session. As is customary, we will hear experts discuss the market outlook for gold/silver, iron ore, nickel, potash, copper/molybdenum, platinum/palladium, zinc and uranium. At the same time, an Exploration Discovery Panel Discussion will investigate why discoveries are not keeping pace with increasing expenditures. There will be brief presentations from eight speakers, followed by a general discussion that is expected to be quite lively.

The convention’s technical program officially opens on Monday morning, March 8, with the keynote session. This year, the focus is on adjusting to the new normal. I will be co-chairing the session with Hanjing Xu, executive director of Sino Gold.

We have lined up a number of high-profile speakers to explore the changing realities affecting mineral exploration and development. Jan Klawitter of the World Economic Forum will present some possible future scenarios, and what they may mean for our industry and Michael Chender, from the Metals Economic Group, will encourage us to embrace uncertainty as the new normal. Hanjing Xu will give
us some insights about what we can expect from China and Mark Bristow, CEO of Randgold, will put Africa in perspective for us. In addition, Anglo American’s John Groom will review mining’s contribution to societies in developing countries.

On the afternoon of March 8, the technical program will split into three streams for discussions about diamonds, financing and global developments in iron ore.

Diamonds are always a popular subject at the convention, and this year’s two-and-a-half hour session will look at diamonds from their deep mantle origins through the far-reaching changes in the economics of the global diamond industry. Meanwhile, the session on financing will examine our toolkit of opportunities and strategic investor financing. The third afternoon session highlights global iron ore deposits and the challenges and opportunities they present.

A major focus on the morning of Tuesday, March 9 will be gold belts and major deposits around the world, with a lead-off presentation by Pierre Lassonde of Franco-Nevada Corporation. Running concurrently will be a session on aboriginal community engagement, with speakers from several countries. In a parallel session, presenters will revisit the Abitibi, offering a fresh look at its potential in light of many recent studies.

On Tuesday afternoon, porphyry copper deposits will be in the spotlight, with a review of their history and new models, illustrated by a number of examples. Geophysics and its application to exploration, always a popular session, runs concurrently.

The New Discoveries and Developments session takes place on Wednesday morning, March 10. Speakers will present papers on Colombia’s Colosa gold project and La Bodega and Mascota gold deposits; the Yukon’s White Gold and Black Fox gold projects; and the discovery and development potential of chromium deposits at McFaulds Lake, James Bay Lowlands. A parallel session on industrial and rare metals will highlight lithium, rare earth, potash and phosphate.

A major convention attraction is the Investors Exchange, where companies showcase their most important activities. The exchange offers the general public and convention delegates an opportunity to talk directly to investor relations personnel, geologists or management about their projects and prospects.

In addition, throughout the duration of the convention, over 140 presenters will use the Exchange Forum to deliver presentations about their projects and discoveries, and answer questions.

The popular Core Shack displays give delegates a first-hand look at drill core from the next generation of projects. This year, 60 companies will present their latest prospects.

Always a popular part of the convention, the Trade Show will feature several national and international pavilions, as well as booths promoting a vast range of equipment, products and services for the exploration and mining industry.

Rounding out these major convention activities are a number of social and networking events for delegates — and also for students, who enjoy a reduced convention registration fee and programs specifically geared toward their interests.

On behalf of the PDAC, I would like to thank our sponsors, without whose support it would be impossible to stage this convention. In particular, I would like to recognize the generosity of our Diamond Sponsor, Teck Resources Limited, our Platinum Sponsor, IBK Capital Corp., and our Patron Sponsor, Barrick Gold Corporation. An event such as this also requires a tremendous amount of organization and I would personally like to thank all the dedicated staff whose tireless effort behind the scenes makes the convention run as smoothly as clockwork each year.

The PDAC International Convention is becoming ever-more popular as the meeting place for the exploration and mining industry. Canada’s rich mineral endowment, regulatory environment and responsible exploration practices, and specifically the role of PDAC in promoting the Canadian mining industry, continue to be the key drivers of its success.

See you all in March!