Mining Journal > Reports > MEG monitor: Record drilling leads to rebound

Metals Economics Group Pipeline Activity Index (PAI) rebounded in May, reaching its second-highest level in 2011 before dipping slightly again in June. 

 

 

In May, a sharp increase in drilling results coupled with a strong number of financings helped push up the PAI up, but a record number of significant drilling results in June were not enough to offset a lack of projects advancing and a lower number of financings. 

The industry’s aggregate market capitalisation slipped to US$2.38 trillion in May from US$2.42 trillion in April 2011, before slipping again in June to US$2.32 trillion. 

This is the first time since May-June 2010 that market capitalisation decreased for two consecutive months.

Drilling increases

The number of significant drilling results spiked considerably, as May and June both easily surpassed the previous one-month highs.

North America and Latin America continued to be the top regions for successful drilling, accounting for more than 60% of the combined bimonthly total.

Latin America alone accounted for almost half of the significant base-metals results.

The number and in-situ value of initial resource announcements in May-June was down very slightly from March-April, but was still the second-highest bimonthly total in the past two years.
In terms of in-situ value, gold and base-metals were both dominated by single projects.

Levon Resources Ltd’s bulk-tonnage Cordero project in Mexico, with 451Moz of silver, 3.4Mt of zinc, 2.8Mt of lead, and 1.1Moz of gold, accounts for about 75% of the base-metals total and is easily the largest announcement of the period.

Meanwhile, East Asia Minerals Corp’s initial estimate of 3.14Moz of gold and 8.95Moz of silver for its Miwah epithermal gold project in Indonesia accounted for more than 60% of the total value of initial gold resources announced in the period.

Financing quiet

The amount raised in significant financings (greater than US$2 million) completed in May-June was unchanged from March-April mainly due to the increased number of financings closed in May.
This was the fourth time in the past eight months that more than 100 financings closed in a single month. 

Unfavourable markets subsequently affected June financings, as a number of companies elected to cancel, delay, renegotiate, or reduce their fund-raising plans.

For more information on the PAI, visit Metals Economics Group’s web site at www.metalseconomics.com.