From prime rib to chips and dip: Lean times at mining's annual conference
04/03/2015 12:00
(Repeating story for additional subscribers without changes to
text)
By Susan Taylor and Euan Rocha
TORONTO, March 4 (Reuters) - When the world's miners head
for Toronto each year to attend their industry's annual
conference, they arrive with certain expectations. They're
accustomed to finding oyster bars, rowdy parties, open bars with
high-end liquor and elegant hotel suites.
But this year's gathering of the Prospectors and Developers
Association of Canada (PDAC) is a more subdued affair, with
lavish spreads and grand lodgings increasingly giving way to
cheese platters and Airbnb rentals.
After a years-long downturn in the mining sector - and with
little relief in sight - the 2015 convention, which runs through
Wednesday, has lost some of its glitz.
"We're seeing far less prime rib, far more chips, far more
salsa," said Benjamin Cox, chief executive of explorer Aston Bay
Holdings Ltd. BAY.V . "I'm really depressed that I have to
drink bourbon versus single malt scotch, it just doesn't do it
for me."
Striking a more serious note, Cox also summed up the overall
mood of the miners: "Everyone is panicked in the industry. If
you are not humbled this year, whether you work for a major or a
junior or anyone in-between, you are insane."
Junior mining firms, which specialize in exploration and
development, have been hit especially hard by falling metal
prices. Spending on global exploration for non-ferrous metals
dropped to $11.4 billion in 2014 from a $21.5 billion in 2012,
SNL Metals & Mining estimates.
Although final attendance numbers have not been released,
event organizers expected between 20,000 and 25,000 participants
this year, down from a peak of some 30,000 participants during
boom times. Mining firms are reluctant to miss the event
entirely, since relationships that start at PDAC often translate
into deals or sales down the road. But they say they are
trimming where they can.
Aston Bay, which saw its agreement with Chile's Antofagasta
ANTO.L terminated after copper prices soured, cut its
attendance to three from seven people and used online
home-rental marketplace Airbnb to find a two-bedroom condo to
house attendees. It has even cut the number of fact sheets it
hands out.
Bruce McDonald, executive vice-president at analytic
services provider ALS Ltd., said he found this year's gathering
"a little bit depressing," but a sign of the times. "Flat is the
new up," he said.
In past years, miners have vied for prime booth space on the
main floor. This year, PDAC opened up the floor to a wider range
of exhibitors, including suppliers, financial firms, and even
pipeline company TransCanada TRP.TO , which is touting the
merits of its Energy East project. Even so, there was empty
exhibition space.
FEWER INVITATIONS
But a common theme expressed by attendees was the decline
in parties. "People are definitely indulging less," said Adam
Stratton, an executive at Realterm Energy. "Normally, I'd have
invites to anywhere from five to 10 events a night, and now it's
probably half that."
Century Iron Mines FER.TO , which has C$40 million ($32
million) in working capital, moved its party from Toronto's
historic Fairmont Royal York hotel - a hub for PDAC socializing
- to its downtown office.
At the makeshift bar set up on a reception desk, a project
manager poured the drinks as guests mingled in the brightly-lit
board room and corridors.
Ken Cunningham, chief executive of explorer Miranda Gold
MAD.V , said he tries to be smart about spending after watching
"an awful lot of people that have been unemployed for a long
period."
An annual shareholder dinner has been scaled back to six
from 50 invites and moved to a more modest Portuguese
restaurant, Cunningham Said, and the company is hosting its PDAC
booth for just two days of the four-day conference.
Renaissance Gold REN.TO is cutting back, too. The company
has opted to use free meeting rooms rather than paying to
reserve space. And Renaissance executives have slashed salaries
to stretch cash, said executive chairman Ron Parratt. The mining
executive did well during more flush years, but recently has cut
his own pay from $100,000 to $60,000 and then $24,000.
Renaissance has scoured its overall operations for savings,
taking such measures as donating or discarding unneeded rock
samples to save $3,000 in monthly warehouse fees.
"You don't want to leave anything untouched", Parratt said.
Another indication of tough times is the relative dearth of
news from Canadian miners leading up to PDAC. In the first seven
weeks of the year, miners typically issue streams of press
releases about exploration results and fund-raising efforts
ahead of the busy spring drilling season.
But data from a top Canadian press release service indicated
the news flow from Canadian miners has dropped by more than half
in the last four years.
"Everyone is pretty damn depressed," Aston Bay's Cox said.
"I moved my company into a basement in Vancouver, Washington.
This is a recession, I have no pride."
($1 = 1.2454 Canadian dollars)
(Editing by Jeffrey Hodgson and Susan Horton)
((susan.taylor1@thomsonreuters.com; +1 416 941 8083; Reuters
Messaging: susan.taylor1.thomsonreuters.com@reuters.net))
Keywords: MINING PDAC/COSTCUTTING