Mining Monthly: November Edition
What you need to know:• Precious metal prices were up modestly in November, following strong performance in October. The mining equities outperformed the metals and broader markets as capital seems to have finally started to flow back into the sector. Other commodities also had a solid month.
• Gold closed the month above $2,000/oz for the first time in its history.
• The lithium price continues to struggle in the wake of a slowing in the adoption rate of electric vehicles amid high interest rates.
Sentiment Update
Precious metals moved higher during the month of November following a strong month of gains in October. The standout statistic was that gold closed the month above $2,000/oz for the first time in its history. Gold was up 2.7% in November to $2,025/oz and silver was up 10.2% to $25.2/oz. On the back of gold breaking the $2,000/oz psychological barrier, equities significantly outperformed with the GDX, GDXJ, and SIL up 11.9%, 15.5%, and 15.2%, respectively. This compares to the TSX and S&P500 which were up 7.1% and 9.4%, respectively. Other commodities also had a strong month, with copper, steel, and iron ore up 4.9%, 4.0%, and 9.0% respectively. The battery metals space struggled during the month, led by lithium which was down 28% in November bringing the downfall to 79% on the year. Other battery metals fell much more modestly. Uranium posted yet another month of positive gains, ending the month up 9% at $81.0/lb.
The mining and metals equities saw a large influx of capital during the month of November posting sizable gains, as mentioned above. This was primarily led by gold breaking out of a lengthy consolidation period but also torque from junior miners being an already highly depressed sector trading at trough multiples. Additionally, majors, who we consider are well-informed leaders in the industry, have been taking advantage of these discounted prices as we have seen more strategic investments in junior explorers as well as acquisitions. We once again encourage investors to get involved in the market at these prices, especially given the recent momentum, however, we note to proceed with caution as we have yet to confirm this uptrend is for real.
The volume and size of equity financings continued to be elevated in November (see M&A and Financing section below). We believe this uptick is primarily due to rates appearing to peak and the existence of pent-up demand from the limited transactions over the last 4-6 months. The elevated metals prices could also be a driving factor.
Alamos Gold is engaged in the exploration, mine development, and the mining and extraction of precious metals, primarily gold. Co.'s s primary asset is the Mulatos Mine and holds the mineral rights to the Salamandra group of concessions in the State of Sonora, Mexico, which includes several known satellite gold occurrences.
Dundee Precious Metals is a Canadian based international mining company engaged in the acquisition, exploration, development and mining of precious metals properties.
Endurance Gold is engaged in the exploration and development of mineral properties in North America and has not yet determined whether its properties contain ore reserves that are economically recoverable. The recoverability of the amounts expended on mineral interests by Co. is dependent upon the existence of economically recoverable reserves, the ability of Co. to obtain necessary financing to complete exploration and development of its mineral properties and upon future profitable production or proceeds from disposition of its mineral interests.
Equinox Gold is in the business of mineral exploration and is actively engaged in the acquisition and exploration of copper and other mineral properties in Central and South America.
First Quantum Minerals is engaged in the production of copper, nickel, gold, zinc, platinum-group elements and acid, and related activities including exploration and development. Co. has operating mines located in Zambia, Australia, Finland, Turkey, Spain and Mauritania. Co. is developing the Trident project in Zambia, the Cobre Panama copper project in Panama, exploring the Haquira copper deposit in Peru and the Taca Taca copper-gold-molybdenum porphyry deposit in Argentina. Co.'s operating segments are individual mine development projects or mine operations. The Corporate and Other segment evaluates and acquires new mineral properties and includes Co.'s metal marketing division.
Lundin Gold is engaged in the acquisition, exploration and development of gold and base metal properties.
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