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Resource Investing

The summer is often slow for the mining space, but many experts agree that overall the industry is in a good place.

The year is nearly halfway done, and while the mining space may be gearing down for a slow summer many experts agree that the sector is in a good place.

Although the gold price took a fall last month, it is still up about 1.5 percent year-to-date and more than 1 percent year-on-year. What’s more, battery metals like lithium and cobalt continue to draw investor attention as electric vehicle demand increases.

The Prospectors & Developers Association of Canada Convention, known as PDAC, is often referred to as a bellwether for the resource space, and this year’s event was resoundingly hailed as a success.

Held from March 4 to 7 in Toronto, the convention attracted 25,606 attendees from 135 different countries. “That’s phenomenal,” Glenn Mullan, president of PDAC, said at the time. “We anticipated some growth based on other conventions that had happened a few months before that were all showing growth. But it’s always gratifying to see that confirmed.”

Convention attendees echoed Mullan’s optimism, with many high-profile experts expressing positivity about where the resource space is at.

“I think the conference is starting off very strong,” said Rick Rule of Sprott US Holdings on the first day of the show. “At least so far with regards to my own experience here at PDAC, and with the meetings we had around the Sprott offices before the PDAC, it seems very, very strong to me.”

He added, “I think there’s a lot of money available to the right teams and the right people.”

CRU Group’s Paul Robinson also commented on the upbeat feel of the convention. “The mood is definitely optimistic,” he said. “If I go back 12 months there was a sign of cautious optimism in the mining sector … and I think in the last 12 months we’ve certainly seen some solid foundations formed.”

Other attendees were even more positive — as CPM Group’s Jeffrey Christian commented, “I’ve been coming to PDAC since the 80s, and I think this is the best, most productive one I’ve been to.”

A number of events held since PDAC have reinforced those feelings, with market watchers pointing to gold in particular as a commodity that has done better than investors perhaps realize. “Gold is doing what it’s supposed to do, it’s providing a hedge to monetary policy,” Doug Groh of Tocqueville Asset Management said at this month’s Mines and Money conference in New York.

Adrian Day of Adrian Day Asset Management made a similar comment, saying, “I think generally people expect too much from gold. Gold, after all, should be a store of value … you invest in gold to preserve your purchasing power, not to get a double or triple on the price of a commodity.”

On the same note, Lobo Tiggre, who also goes by the alias Louis James, has pointed out that even a sideways gold price can be a good thing. “Sideways is another word for stability,” he said at PDAC. “A sideways year at $1,300+ gold — that’s not a bad thing.”

It’s impossible to say for certain where the resource space and commodities like gold may go in the coming months, especially with some investors gearing up to embrace the summer’s “sell in May and go away” philosophy, but overall it seems experts remain positive.

And who knows — maybe by the end of 2018 we could see some of PDAC’s most bullish gold price predictions come true.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in contributed article. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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