2 E&MJ; • MAY 2018
FROM THE EDITOR
In this month's edition, E&MJ; offers a profi le of the gold
mining industry with reporting on the activity among the
majors. The diffi culties the gold sector faces exemplify the
issues affecting most of the mining industry, a lack of ex-
ploration and development investment. The reserve base
among the gold majors is shrinking and no new major dis-
coveries have been made. That can be directly attributed to
a lack of greenfi eld investment.
There's no better place to get a feel for mining-related
exploration and development investment than the Prospectors & Developers Associ-
ation of Canada (PDAC) meeting, which is held annually in early March in Toronto,
Canada — the mining investment capital of the world. During his presentation at the
2018 PDAC keynote session, Sean Roosen, chairman and CEO, Osisko Gold Royal-
ties, touched on several of the salient factors explorers and developers face. Osisko
Gold Royalties was created when Agnico Eagle and Yamana Gold acquired Osisko Min-
ing Corp. and the Canadian Malartic mine — the mine on the cover of this magazine.
Mineral exploration today is more diffi cult. Many prospectors believe that most
of the easy-to-fi nd deposits have been discovered and the new prospects lie at
depth. While there is some truth to that, the bigger problem facing explorers is a
lack of investment. "There is less money available today," Rosen said. "In the past,
people used to invest in prospectors and exploration because they wanted to take a
risk and have fun. That money has moved to crypto currencies and 'weed' stocks,
which is less regulated and more like a casino. We need to take a step back and re-
gain those investors." Roosen asked the crowd: "How do we get the next generation
of investors interested in our space?"
Today, actively managed money is being challenged by passive funds. Billions of
dollars are moving into index funds and quant trading, which mostly look backward
at historical comparisons. "Without active management, we won't be able to fi nance
projects," Roosen said. "You can't explain why you need $50 million to drill holes
over here to a computer." Tongue in cheek, Roosen said he has tried to schedule
meetings with these computers and it's diffi cult.
Major mining projects are capital intensive and the money is no longer available.
Shareholders are less likely to approve that $15 billion investment. Roosen believes
the larger companies will have to return to the old playbook, where mining compa-
nies enter joint ventures and syndicate bigger deals. "There is no long-term vision
with today's investors and shareholders," Roosen said. "Only a few understand the
importance of a 25-year investment. They are mostly Chinese and state-sponsored
companies and they are buying a lot of things that we should own. Look what has
happened in Canada. We have lost a lot of our status. We lost Falconbridge, Inco and
Alcan. And, Goldcorp and Barrick are one-third the size they used to be."
The development of natural resources is vital to the Canadian economy and
Roosen is passionate about the mining business. Referring to his experience with
Canadian Malartic, he explained that the only way to sustain rural communities, es-
pecially those in northern Canada, is to develop assets that live and provide in their
world. Future discoveries will require experienced geologists, boots on the ground,
drill rigs turning and active investors.
Competing for
Investment Dollars
In this month's edition,
mining industry with reporting on the activity among the
majors. The diffi culties the gold sector faces exemplify the
issues affecting most of the mining industry, a lack of ex-
ploration and development investment. The reserve base
among the gold majors is shrinking and no new major dis-
Steve Fiscor
Publisher & Editor-in-Chief
Steve Fiscor, Publisher & Editor-in-Chief
sfi scor@mining-media.com
Mining Media International, Inc.
11655 Central Parkway, Suite 306; Jacksonville, Florida 32224 USA
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Editorial
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