Uncertainty, Recession Potential, Metals Outlook: PDAC 2022, Day 1

Uncertainty, Recession Potential, Metals Outlook: PDAC 2022, Day 1youtu.be

The annual Prospectors and Developers Association of Canada (PDAC) convention is now underway after being rescheduled from its original March date due to pandemic-related restrictions.

The event, which is celebrating its 90th anniversary, runs at the Metro Toronto Convention Center from June 13 to 15 and is back to its usual in-person format after the 2021 conference was held entirely online; a digital component will follow later this month from June 28 to 29.

Despite noble efforts from PDAC organizers, registration delays led to massive lineups and bottlenecks on the morning of day one; they were resolved by the noon hour.

Sentiment at this year’s event is mixed, with concerns running high about rising inflation, the potential for a recession and economic policy. While prices for many commodities are elevated due to supply chain difficulties, war and rising demand, stock market bearishness has eroded investor confidence and increased risk aversion.

This was highlighted in the first of the day's technical presentations, an outlook and review of the mineral exploration sector from Mark Ferguson, research director and head of mining studies at S&P Global.

During his address, Ferguson noted that 2021 saw significant increases in exploration budgets, which topped US$11.2 billion in 2021, with an additional 200 companies entering the sector.

2022 has not brought the same amount of exploration financing growth due to market volatility.

However, Ferguson did say that the market cap for the overall mining sector is on the rise, currently standing at US$2.5 billion. He anticipates that mining companies' budgets will increase 5 to 15 percent this year, with gold and copper exploration being the main drivers.