Did you miss this year’s PDAC convention? We’ve gathered all our precious metals coverage from the event in one place.
This year’s Prospectors & Developers Association of Canada (PDAC) convention saw a slew of experts share their vast knowledge on all things precious metals.
The show was held in Toronto from March 3 to 6, and saw 1,000 exhibitors, 3,500 investors and 25,000 attendees from 135 countries descend on the Metro Toronto Convention Center for four days of presentations, panels and more.
If you missed it, don’t worry — we’re ready to fill you in. From analysts to CEOs, the Investing News Network (INN) interviewed important players about a variety of precious metals topics, including gold mergers and acquisitions (M&A) and palladium‘s record-setting rally. Keep scrolling to view all of our precious metal coverage from the conference.
Alain Corbani, head of commodities at Finance SA, told INN the one ingredient that is missing to trigger a large upswing in the gold price and why he believes that silver won’t start making moves upwards until the increase in gold prices become “validated.”
“[We] have a perfect environment for a higher gold price now — the only missing ingredient in that equation that would trigger gold to a higher level is the US currency,” he said.
Jeffrey Christian, managing partner at CPM Group, suggested that profitability is much more important than size in the gold-mining business.
“I’m always focusing on companies that generate profits, and I think one of the problems with the large companies is they haven’t been generating profits,” he said. “They’ve been focusing on the number of ounces that they’re producing as opposed to the number of dollars of profit.”
He continued, “you’re getting bigger and bigger — you’ll just have more troubles trying to maintain your production because you’re so afraid [it] will go down, instead of focusing on increasing your profits.”
Adrian Day of Adrian Day Asset Management shared his thoughts on the gold space and what’s ahead for the yellow metal in 2019.
“I am quite constructive on the price of gold,” Day said. “I think there are several things that are positive for the gold price,” he added, discussing stock market volatility and the US Federal Reserve.
Day also noted that the Fed putting a pause on interest rate hikes isn’t as important as the fact that it placed a pause in the face of stock market volatility.
The gold price may be struggling to stay above the US$1,300-per-ounce level, but Gold Newsletter Editor Brien Lundin still believes the yellow metal’s long-term outlook is bullish.
“I think the stocks are reflecting that [bullish long-term outlook] in that investors aren’t bailing on the sector — the smart investors aren’t at least,” he said
Lundin believes that, once gold can hold above US$1,300 or US$1,320, “the key points are the 2016 highs, around US$1,370, US$1,372.”
The gold price is currently up just over 2.5 percent year-to-date, but EB Tucker believes the yellow metal will rise quite a bit higher by the end of the year.
“I went out and made a big call in December that gold would hit $1,500 [per ounce] this year. I’m standing by that call,” he said. “Gold’s up significantly since the summer […] This is a big move when the stock market’s had a tough time.” He continued, “I think that’s very telling. So, I’m very positive on physical gold.”
Dr. Kal Kotecha, editor and founder of the Junior Gold Report, explained to INN how the upcoming economic crisis will be good for gold.
“We are going into a deep economic crisis, maybe starting in about 12 months [and it will] maybe last two or three or four years […] I think this is going to be a little more gradual [than in 2008], with a lot of down days, and I think that is what’s going to be a really good catalyst for gold.”
Chantelle Schieven, research head at Murenbeeld & Co., told INN where she sees the price of gold heading for 2019, stating that she believes the yellow metal will experience an average of around US$1,330, and that she “think[s] that there is over a 40 percent probability that gold will break US$1,400 in the second half of the year.”
Due to the fact that the road to rebound is a long one, Schieven advises that investors ignore the day-to-day happenings of gold, because it is a long-term investment where one needs to take the bad with the good to truly profit from the metal.
Sentiment toward gold is generally positive at the moment, but Ian Ball, president and CEO of Abitibi Royalties (TSXV:RZZ), thinks the yellow metal may trade flat for the foreseeable future.
“I think the gold market right now reminds me very much of the 1980s,” he said, citing the economic environment surrounding the yellow metal, including interest rates and the equities market. “So, I think we’re going to trade in a band […] You know, I’ve generally felt for the past few years that gold was going to trade sideways.”
“[Titan is] bringing a significant amount of capital, so it made sense for us to do a deal with them.”
The lead director said that this deal will unlock value so that the company can begin exploration that it was previously held back from due to a lack of capital.
“Silver itself has gone from US$13 to US$16 [per ounce],” he commented. “That percentage gain is much more than what we have seen in gold over the last couple of months.”
Smallwood said he is even more bullish on silver than he is on gold because there are “better fundamentals behind silver.”
Darren Blasutti, CEO of Americas Silver (TSX:USA,NYSEAMERICAN:USAS), spoke about why the silver space won’t see any M&A activity anytime soon.
“[The silver industry] is very small, and right now, where silver prices are, there are probably only four or five companies that actually make money. So, the problem with consolidation of the silver companies is you are going to buy something smaller that loses money,” he noted. “You are not going to see as much consolidation until you see a real price move.”
Palladium’s rally is in no way speculative according to Jim Gallagher, CEO of North American Palladium (TSX:PDL,OTC Pink:PALDF).
“The price of palladium has hit record highs over the last couple of months and it continues to increase. Certainly as a palladium miner or a primary palladium miner [that’s] very good news for us,” he said. “That price movement is the result of a fundamental deficit in the market, so this is a supply [and] demand thing that is not speculatively driven.”
In addition to video interviews, INN also asked industry experts at PDAC if they believed that M&A activity would soon be hitting the silver space, given how prevalent it is in the gold sector right now.
When speaking with these industry experts, it was obvious that they fell into two camps — those who were hopeful and could envision the possibility of consolidation within the silver space and those who could not see the plausibility of it, given the white metal’s current prices.
For all of INN’s PDAC coverage, check out our PDAC 2019 playlist.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Nicole Rashotte, 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 the interviews it conducts. 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.