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Mining Exploration Insights: Financing Falls To 8-Month Low In October

Drilling activity, initial resources and positive project milestones all improved in October — the number of significant financings was unchanged — as S&P Global Market Intelligence's Pipeline Activity Index, or PAI, jumped to 96 from 84 in September. However, the total raised in financings by junior and intermediate companies reached an eight-month low of US$493 million in October; with year-to-date fundraising totaling just over US$7 billion. The full year of 2019 remains on track to post a 15% to 20% fundraising shortfall compared with 2018.

The following analysis is an extract of S&P Global Market Intelligence monthly Industry Monitor, which reviews exploration activity and development in the mining industry. The full report and data files are made available to our Metals & Mining subscribers only. Here are the highlights from our November issue:


Drilling activity, initial resources and positive project milestones all improved in October — the number of significant financings was unchanged — as S&P Global Market Intelligence's Pipeline Activity Index, or PAI, jumped to 96 from 84 in September. The base metals PAI climbed to 57 from 48, while the gold PAI rose to 148 from 128 over the same period.

Most drilling activity metrics improved in October, except for the number of reported drillholes, which has continued on a downtrend since August. The number of projects reporting shot up by 20 month over month to 219, raising the 10-month average for 2019 to 200. The number of significant drill intersections also rose slightly in October, to 136 from 135 in the previous month, with a continuing increase in base/other metals results offset by a decrease from gold projects.

Despite the increase in the PAI, metals prices moved sideways in October after rising for four consecutive months, as S&P Global Market Intelligence's Exploration Price Index, or EPI, remained unchanged at 132. The indexed price fell for five — gold, silver, platinum, nickel and molybdenum — of the eight constituents of the index and rose for zinc and cobalt (copper was unchanged).

The total raised in financings by junior and intermediate companies reached an eight-month low of US$493 million in October; with year-to-date fundraising totaling just over US$7 billion, full year 2019 remains on track to post a 15% to 20% shortfall compared with 2018. The number of significant gold and base metals financings was unchanged at 42 in October, with an increase in financings for gold projects offset by a decrease in base/other metals raisings.

After declining for two consecutive months, the number of initial resource announcements vaulted to eight from three in September. Six of the new resources were from gold projects and two were from base/other metals projects.

Positive project milestone activity was up for a second consecutive month in October, with the number of milestones increasing to 10 from seven. Nine of the milestones were for gold projects and one was for lead. There were also three negative milestones.
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