The Prospectors and Developers Association of Canada (PDAC) released its annual update, Mineral Finance 2023: Shifting tides within the mineral industry on March 1. The report outlines how the rapidly changing economic landscape translated to metal prices, the availability of capital for the mineral sector and the pace of exploration expenditure in Canada and around the world.

“Accessing equity or debt capital was much more challenging for mineral exploration and mining companies in 2022, and this could foretell a slowdown in exploration activity this year both within Canada and abroad,” said Alex Christopher, PDAC President.

In a release announcing the publication of the update, PDAC wrote that inflation was central to both markets and Main Street in 2022, reaching the highest rates seen in decades. To combat this inflationary wave, central banks around the world increased interest rates, sparking concerns that a global recession is on the horizon and leading GDP growth projections downward over the course of the year.

“While Canadian markets were not immune, they were better shielded from a weakening investment market as the pace of mineral industry financings in Canada remained well above other marketplaces in 2022. Notably, the amount of money raised for the sector outside of Canada halved last year. Our highly evolved mineral financing ecosystem’s ability to connect investors to the mineral industry and the effect of targeted exploration incentives provides Canada with an inherent advantage. Because of these factors, Canada’s share reached nearly 30 percent of all equity raised for the sector last year, up from the decade average of approximately 21 percent,” PDAC wrote.

“Canada’s leadership as both a top destination to explore for minerals and in generating new capital investment should not be understated. That said, we must continue to identify new ways to connect companies with capital, boost our competitiveness and ensure that industry has the access to the land, people and capital needed to drive our transition towards a low-carbon future,” added Christopher.

The report outlines price trajectory for a suite of battery metals and highlights how a forecasted shift in demand is influencing lithium, nickel and cobalt prices. With a more than ten-fold increase in 2022, lithium could remain front and center for many investors and mineral explorers in 2023.
“Increasing demand for battery metals and the potential for Canada to play a primary role in sustainably sourcing these materials underlines why we have asked for new investments and incentives for mineral explorers. We are keen to see the new 30 percent Critical Mineral Exploration Tax Credit have an impact on Canadian over the coming years,” Christopher added.

The PDAC Conference opened on Sunday, March 5 with an opening ceremony in which Julie Dabrusin, Canada’s parliamentary secretary to the federal minister of natural resources, highlighted how the commitment of 120 countries, including Canada, to decarbonize has put the spotlight on mining.

“The transition to net zero has become the competitive race between the world’s largest economies, which is why the clean energy shift represents a generational economic opportunity for Canadian miners and explorers,” she said.

This is the first year since 2020 that the PDAC convention is being held live and in its regular March slot. With about 25,000 expected to attened.

Photo by Emma Salditt