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Mining Monthly: February Edition

What you need to know:
• Gold held flat in February, continuing a long period of consolidation, and most other metals were down modestly.
• The precious metal equities further sold off in February, compounding the losses in January, highlighting to the market this industry is still out of favour.
• We had several significant updates from companies within our coverage.

Sentiment Update
Gold and PMs had another flat-to-down month, starting the year off poorly. Gold closed the month of February up slightly (0.4%) to $2,043.5/oz. Silver and platinum were down 2.1% and 4.7%, respectively. More notably, the equities continued a more dramatic sell-off vs. metal prices with the GDX, GDXJ, and SIL down 5.6%, 5.7%, and 9.1%, respectively. This compares to broader markets which posted solid gains (especially in the U.S.) with the TSX up 1.6% and the S&P500 up 5.4% in the month.

Other commodities had a slight down month, with copper, steel, and iron ore at -2%, -4%, and -14%, respectively. Notably, Iron Ore is down over 20% since the beginning of January. Also, we’d like to note that despite the precious metals equities selling off beyond their underlying metal prices, the COPX outperformed the copper price, down just 0.1% on the month. The battery metals space was finally up slightly, stopping the sharp decline in the market, particularly in lithium (up 4% in February, down 73% YoY). We are watching this space closely as there are many opportunities for a low entry point in the equities.

Uranium took a breath this month, following two stellar months in December and January (up over 24%). The yellow metal was down 4% to $102/lb but remains up 97% YoY. Despite the great performance, we still believe there is further upside for the uranium space and spot price itself.