Canadian Mining Journal

Feature

The disappearance of ‘big bucks’

Even the Top 40 miners find themselves struggling



Commodity prices have gone on a wild ride over the past 10 years, and that is clearly illustrated in our annual Top 40 coverage.

In 2009, the words “big bucks” appeared in the headline to our Top 40 coverage for the second year in a row. That was the last time we used such unambiguous and glowing terms to describe the performance of Canada’s biggest mining companies.

Even in the years when miners were making “big bucks,” the mining space was not universally profitable. In 2009, 29 of the Top 40 made a profit (based on 2008 financials).

That number fell to 22 in 2014, and rose to 30 last year. This year, only 21 reported net earnings for the year.

Despite fluctuations in commodity prices, there’s been a remarkable consistency in the top 10 or so companies in our Top 40 during the past decade.

While our No. 1-ranked company, Nutrien, appears for the first time on our list, the company’s predecessors Potash Corp. of Saskatchewan and Agrium have been in the top six every year for the past 10 years. (See page 34 for our interview with Nutrien CEO Chuck Magro).

Teck Resources and Barrick Gold have both appeared in the top five every year since 2009. (In 2011, Barrick was even No. 1.) And oilsands companies have also consistently held spots in the top five, even after a deep plunge in oil prices from 2014 to early 2016.

Goldcorp, which has made the top 10 every year in the past decade, will disappear from our list next year. Its merger with Newmont Mining, which closed in April, has formed the world’s biggest gold miner, Newmont Goldcorp. However, its U.S.- based headquarters mean it won’t be eligible for our Top 40.

There is, perhaps, a silver lining to the deal. We will be watching closely as the combined company evaluates its expanded base of properties. In January, when the companies announced the friendly merger, they noted the combined company was targeting $1 billion to $1.5 billion in divestitures over the next two years to optimize gold production at a sustainable steady state level of 6 million to 7 million oz. annually.

The new owners of those assets – assuming there is enough investor interest to raise the capital required to buy them, or miners with strong enough balance sheets to support their acquisition – could climb the ranks of the Top 40, or perhaps even be new entrants on our Top 40 in years to come.

Sifting through this year’s Top 40 data, there are a few standouts. They include Wheaton Precious Metals, which saw profits rise an incredible 640% last year over 2017. The company has streaming agreements covering 19 operating mines, providing it with production of 688,000 gold-equivalent oz. last year.

Turn to page 19 for more stats and figures, and to crunch the numbers yourself.


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