PDAC 2006: Mining’s back!

The mining industry is back in the spotlight thanks largely to commodity price inflation fuelled by continued demand from Asia, and relatively low interest rates. The U.S. dollar remains weak and surging energy prices and nominally high metal prices — all denominated in U.S. dollars — are starting to rekindle inflationary pressures. This is being largely offset by Asia, which continues to support U.S. consumption by providing finished goods to the West. An aging Western population, supposedly preoccupied with saving for retirement rather than satisfying material wants, further complicates the situation. When will it all end? Who knows, but it can’t go on forever. But, until that time, we can enjoy the ride!

Exploration spending is up and early estimates suggest that Canada will get close to $1 billion in 2005. Uranium exploration is no longer an oxymoron. Uranium prices have leapt over 75% since this time last year. It’s reminiscent of the 1970s when surging oil prices and the concept of Limits to Growth resulted in an incredible boom in uranium exploration. Many of the uranium mines in Saskatchewan’s Athabasca basin are the result of that initial exploration push. Similarly, the gold price has risen appreciably. According to those familiar with the gold market, gold has reassumed its rightful place as an inflation hedge and is appreciating in all major currencies, not only U.S. greenbacks. Just a few years ago, gold was a near useless metal. Similarly, increasing prices for copper, nickel — and even zinc — continue to have a favourable impact on exploration budgets.

Large companies, which face increasing pressure to grow, are merging with competitors while some established miners, such as Teck Cominco, are venturing into in non-traditional areas. The activity of the senior and intermediate companies is in sharp contrast to that of the junior sector where it is still difficult to raise capital unless a company has a defined resource or some good drill results. Even so, the high-risk junior exploration sector still provides much of the grist for the mill. Perhaps the phase of mineral exploration where funds can be raised on the merits of a sound geological concept, lies just around the corner.

“Mining’s back!” is the theme of the PDAC 2006 convention and will be featured in the keynote session, which will focus on how mining benefits everyone. Mining forms the nucleus around which manufacturing and related service industries grow. Today, environmentally responsible mining improves living standards through direct employment, and demand for locally provided services and tax revenue. The keynote session will also examine the state of global exploration, the impact of mining on local and national economies, and success stories from the perspective of investors and mining communities. Lastly, delegates will gain insight on the next generation of discoveries. Not only is it back, mining will be around for a long, long time.

Once again, the PDAC 2006 convention will host a joint plenary session with the World Mines Ministries Forum (WMMF), as it did in 2004. The forum will draw attention to the WMMF sessions on many issues faced by governments and the exploration and mining communities around the world. For further information, visit www.wmmf.org.

PDAC 2006 will showcase aboriginal participation in the mineral industry. A Monday afternoon session will describe how First Nations are involved in all stages of mineral exploration and development. Mining projects in Canada are typically considered by most to be remote enterprises. However, in many instances mining projects occur near First Nation communities and provide significant benefits, as long as operations are conducted in an environmentally responsible manner. This session will highlight some of the experiences and successes of First Nation enterprises and partnerships.

The technical program features Latin America, and will assess the overall economic, political and social environments in each of its nations. Canada is also featured — but with a twist. The first Canada session examines mining camps in Canada from the glass-half-full perspective; the second session looks at Canadian companies that are at work throughout the planet. The ever popular diamonds session will discuss why Canada remains the world’s diamond exploration hotspot, as well as take a look at diamond production and marketing. A finance session will describe current trends in equity markets, financing, mergers and acquisitions. The geophysics session will highlight new exploration techniques and technologies through a series of case studies. Lastly, the new discoveries session will feature some significant recent discoveries and where they are in terms of development.

This year, three short courses and workshops are being offered. In keeping with the “Mining’s back” theme and the resurgence of the non-renewable resources sector as an investment area, the convention planning committee has organized a workshop in conjunction with Desjardins Securities that aims to educate investors about mineral exploration and development and the relationship of exploration and development to company stock prices. This is an excellent opportunity to gain some practical knowledge and insight from some of the industry’s top professionals and all for $50 with lunch included! In addition, for those industry professionals who live and breath National Instrument 43-101, a breakfast workshop is planned to bring you up-to-date on the recent amendments to standards of disclosure on mineral projects.

This year’s exploration-oriented short course features the search for uranium. It will be of interest to industry practitioners, as well as those who require some knowledge of what makes a uranium deposit in order to make an informed opinion of the merits of a particular property or company. Having worked in the uranium exploration field during and immediately after university, I never thought I would see another uranium exploration boom. However, it’s back and the supply and demand fundamentals suggest that it could be around for a long time.

In between the technical sessions the convention features keynote luncheon speakers who are sure to inspire thoughts. At the Mineral Outlook Luncheon Donald Coxe, Global Portfolio Strategist with BMO Financial Group and Chairman of Harris Investment Management of Chicago, will discuss “Learning to live with prosperity.” Coxe is a renowned public speaker with a good sense of humour, able to enliven investment concepts with an array of quotations and analogies from other disciplines and interests. At the PDAC-CIM joint luncheon we welcome Mark Bristow, CEO of Randgold Resources. Bristow, who is never afraid to speak his mind, will talk about the “New gold supply — the influence of risks, technology and politics.” I’m certain he will provide some insight into the gold mining business from an African perspective.

The convention planning committee has done an outstanding job of putting together a program that has both depth and breadth in terms of trends and developments. In four short days delegates will be kept abreast of what’s happening in the world of mineral exploration and development.

We would like to thank all of our sponsors for their generous and loyal support of this year’s convention. Special thanks go to our premier sponsors for their continuing support: Placer Dome, Canaccord Adams and The Grosso Group. A full list of sponsors is available on our website at www.pdac.ca.

PDAC 2006 is shaping up to be the largest convention yet in terms of the number of companies and individual delegates. It’s the one mineral industry convention that brings the whole world together. So mark your calendar and plan to be in Toronto for the PDAC 2006 International Convention, Trade Show and Investors Exchange on March 5-8, 2006.

PDAC 2006 CONVENTION PLANNING COMMITTEE

ROD THOMAS, Diadem Resources (Chair)

GREG BARNES, T
D Securities

DON BUBAR, Avalon Ventures

NORMAND CHAMPIGNY, IBM Business Consulting Services

DAVID CHRISTIE, TD Newcrest

DAVID COMBA, Corporate Director

BARRY COOK, Consulting Geologist

DAVID DAVIDSON, Paradigm Capital

VICTOR FLORES, HSBC Securities

MICHAEL FOX, Nishnawbe Aski Development Fund

NEIL GOW, Roscoe Postle Associates

DAVID GOWER, Falconbridge

JOE HAMILTON, African Copper

DAVID MALLALIEU, BMO Nesbitt Burns

BILL MERCER, Falconbridge

TED REEVE, Haliburton Mineral Services

BOB SCHAFER, Hunter Dickinson

PATRICIA SHEAHAN, MDRU-UBC Consultant

JOHN SULLIVAN, Watts, Griffis & McOuat

ROBERT VALLIANT, Tri Origin Exploration

VICTORIA VARGAS, Alamos Gold

PETER WALKER, Geophysical Algorithms

ROGER WALLIS, Roger Wallis and Associates

BILL WASHINGTON, Wellington West Capital Markets