On Sunday, March 6, I had the chance to go to the convention hosted by the Prospectors & Developers Association of Canada (PDAC) in Toronto, Canada. It is one of the biggest conventions in the world where mining companies come and showcase their businesses.
Over the past few years, I have made my mission to go to the conferences and conventions like the one I went to over the weekend.
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Why? The idea is very simple: you get to learn about what’s happening in the mining industry, you get to talk to hear from companies that are actually are looking for metals or producing them, and you get to see firms that service them.
The PDAC convention is a great place to be, because you get to look at the mining industry from a global perspective. You see attendees from all over the world.
As my long-term readers know, I am more focused on gold and silver. So, at PDAC 2017, I was more interested in seeing what they had to say.
Also, I wanted to see what the mining companies had to say about the situation in the market and where they thought precious metal prices could go.
For the time I was there, there were three major things I observed, and they are as follows:
- I have been attending the PDAC conventions for several years now and, in the last couple of years, the crowd has definitely thinned out. I’d be very interested to see what the attendees’ numbers are in 2017. In 2016, it was 22,122 attendees. I will not be shocked if the attendees’ figures are lower this year than in the previous year. (Source: “2016 Statistics,” Prospectors & Developers Association of Canada, last accessed March 7, 2017.)
My takeaway: less attendance essentially shows there isn’t much interest in the mining sector in general right now. This could be a sign for investors to actually start paying attention to it. Remember, the best opportunities are found when no one is looking at them.
- Walking through aisles where mining companies had their booths set up, it was interesting to see where crowds were gathered. A few of the best mining companies (at least in my opinion) that have great properties and are producing didn’t get much attention.
My takeaway: great companies are still getting ignored. If/when precious metal prices increase, look for companies that have properties located in safe geological areas, solid grades in the grounds, low production costs, and strong management. They could provide leveraged returns. They don’t have to be big names; just mid-tier gold or silver producers would do the job.
- I sat through several presentations throughout the day. I remember that back in 2011, whenever I went to events like PDAC, you would hear presenters provide targets on where the precious metal prices could be headed. In 2011, it wasn’t uncommon to hear targets that said the gold price could soar to $5,000.00 per ounce. At PDAC 2017, I didn’t hear any predictions like that. In fact, if I recall correctly, one presenter said “I am not in the target-providing game.”
My takeaway: you see, when even the precious metal bugs refrain from saying anything, it’s time to be actively looking. I have said this before: you want to look at assets when no one is looking at them. That’s when you find the best opportunities that pay immense returns.
