STUDY: Equities focused on costs despite better performance

TORONTO – Canadian mining equities witnessed a slight improvement in performance during the third quarter, but cautious investor sentiment remains, according to Canadian Mining Eye: Q3 published by Ernst & Young. The index tracks 100...

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TORONTO – Canadian mining equities witnessed a slight improvement in performance during the third quarter, but cautious investor sentiment remains, according to Canadian Mining Eye: Q3 published by Ernst & Young. The index tracks 100 mid-tier and junior miners listed on the TSX and TSXV exchanges.

EY found that the index increased 5% in the third quarter, but that doesn't undo the 50% it gave up in the past 12 months. Despite this moderate improvement, the near term performance of the sector is unclear due largely to an uncertain outlook for metal prices that will reduce investor interest.

The study also determined that cost cutting remains a priority. Mining companies are trimming their production costs and rationalizing their asset portfolios. Managing costs remains "very challenging" for both majors and mid-tier companies. Some are turning to joint ventures, some are deferring expenditures, and others are seeking alternative financing options.

To read the entire report, click here.

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