The Weekly Dig - March 10, 2017

by Mick Carew, PhD, and The Haywood Mining Team

PDAC: Mood Remains Buoyant Despite Lower Metal Prices


The PDAC convention in Toronto struck an optimistic tone this year, with many regarding the mood in 2017 as the most positive in a number of years. Although no official statistics have been released yet, exhibitor space, short-courses, investor meetings the Mineral Outlook luncheon and Awards Gala were all reportedly sold out. In a further boost to the industry, the government also announced an extension to the Mineral Exploration Tax Credit (METC), a 15% non-refundable tax credit on eligible exploration expenses (in addition to tax deductions associated with flow-through share investments). However, the positive vibe at the conference did not transfer to weekly metal price performance. In fact, nearly all major base and precious metals were down several percentage points this week (but rising slightly late Thursday), led by nickel, down a significant 11% to $4.46 per pound. Other base metals were also down, with copper down 3.3% and zinc down 3% with the exception of lead rising slightly by 0.5%. The precious metals were all lower, with gold (down 2.5%) falling briefly below the $1,200 per ounce level as jobs number from the U.S. surprised on the positive side and the possibility of more than one interest rate hike in 2017 gathered momentum. The price of gold finished at $1,204 per ounce, while silver (down 5.6%), platinum (down 6%) and palladium (down 3.8%) each finished at $17.02, $942 and $747 per ounce respectively. The news was no better for oil as additional supply from U.S. crude production and Iran and Iraq counter the cut in production imposed by OPEC in January. WTI crude fell 10% during the week to finish below $50 per barrel for the first time since December last year. The daily broker average price (BAP) of uranium was 4.4% this week, finishing at $24.31 per pound.


Click here for the full report



Important Information and Legal Disclaimers

All prices are in C$ unless noted

This report is neither a solicitation for the purchase of securities nor an offer of securities. Our ratings are intended only for clients of Haywood Securities Inc., and those of its wholly owned subsidiary, Haywood Securities (USA) Inc., and such clients are cautioned to consult the respective firm prior to purchasing or selling any security recommended or views contained in this report.

Estimates and projections contained herein, whether or not our own, are based on assumptions that we believe to be reasonable. The information presented, while obtained from sources we believe reliable, is checked but not guaranteed against errors or omissions. Changes in the rates of exchange between currencies may cause the value of your investment to fluctuate. Past performance should not be seen as an indication of future performance. The investments to which this report relates can fluctuate in value and accordingly you are not certain to make a profit on any investment: you could make a loss.

Haywood Securities, or certain of its affiliated companies, may from time to time receive a portion of commissions or other fees derived from the trading or financings conducted by other affiliated companies in the covered security. Haywood analysts are salaried employees who may receive a performance bonus that may be derived, in part, from corporate finance income.

Haywood Securities, Inc., and Haywood Securities (USA) Inc. do have officers in common however, none of those common officers affect or control the ratings given a specific issuer or which issuer will be the subject of Research coverage.  In addition, the firm does maintain and enforce written policies and procedures reasonably designed to prevent influence on the activities of affiliated analysts. 

Dissemination of Research

Research reports are disseminated either through electronic medium or in printed copy.  Clients may access reports on our website, or receive publications directly via email.  Haywood strives to ensure all clients receive research in a timely manner and at the same time. It is against our policy for analysts to discuss or circulate their recommendations internally prior to public distribution. This policy applies equally to recommendation changes, target changes and/or forecast revisions.

For Canadian residents: Haywood Securities Inc. is a Canadian registered broker-dealer and a member of the Investment Industry Regulatory Organization of Canada, the Toronto Stock Exchange, the Toronto Venture Exchange and the Canadian Investor Protection Fund and accepts responsibility for the dissemination of this report. Any Canadian client that wishes further information on any securities discussed in this report should contact a qualified salesperson of Haywood Securities Inc.

For U.S. residents: This investment research is distributed in the United States, as third party research by Haywood Securities (USA) Inc. Haywood Securities (USA) Inc. is a wholly owned subsidiary of Haywood Securities Inc., registered with the U.S. Securities and Exchange Commission, and is a member of FINRA and the Securities Investor Protection Corporation (SIPC). Haywood Securities (USA) Inc. as a U.S. registered broker-dealer accepts responsibility for this Research Report and its dissemination in the United States. Any U.S. client that wishes further information on any securities discussed in this report or wish to effect a transaction in these securities should contact a qualified salesperson of Haywood Securities (USA) Inc. Haywood Securities Inc. Research Analysts are considered Foreign Research Analysts to the USA and are not registered/qualified as Research Analysts with FINRA. As these analysts are considered Foreign Research Analysts they may not be specifically subject to FINRA (formerly NASD) Rule 2711 and FINRA (formerly NYSE) Rule 472 restrictions on communications with a Subject Company, Public Appearances and trading securities held by a Research Analyst Account.

This report may be distributed in the following states: nil. Otherwise, this report may only be distributed into those states with an institutional buyer state securities registration exemption.

Analyst Certification

We, Mick Carew, Geordie Mark, Colin Healey, Pierre Vaillancourt, and Kerry Smith, hereby certify that the views expressed in this report (which includes the rating assigned to the issuer’s shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations.

Important Disclosures

Of the companies included in the report the following Important Disclosures apply:

* n/a

Other material conflict of interest of the research analyst of which the research analyst or member knows or has reason to know at the time of publication or at the time of public appearance:

* n/a