PDAC-Miners hopeful of emerging from a late 2011 funk
By Euan Rocha
TORONTO (Reuters) - Detour Gold (DGC.TO: Quote) last month sold C$277 million of equity to investors willing to bet on its promising gold project - a hefty sum that bankers say the Canadian company would have struggled to raise barely two months earlier.
Detour's success in raising funds is one of many small signs that the malaise that gripped miners, explorers and investors in late 2011 is easing. A brighter economic outlook has brought a ray of optimism back to the global mining sector, which gathers next week in Toronto for its biggest convention of the year.
While stresses still weigh heavily on the world financial system, a batch of decent U.S. economic data and easing concerns about a slowdown in China have breathed fresh life into mining stocks that tumbled last year.
"If I compare right now to, let's say, the latter part of 2011, generally executives are more positive now," said Egizio Bianchini, co-head of metals and mining at BMO Capital Markets.
"The often overused phrase 'cautiously optimistic' is probably one that can be used now, and I think that's where people are at," Bianchini said in an interview before the annual Prospectors and Developers Association of Canada convention. The event, known simply as PDAC, opens Sunday in Toronto.
The Dow Jones Basic Resources Titans Index .DJTBAS, which reflects the performance of a basket of the world's top mining and steelmaking stocks, dropped to a two-and-a-half year low in early October as the euro zone debt crisis spread.
It has risen nearly 30 percent since then, helped by rallies in both gold and copper prices.
Base metal and steel prices are usually strong indicators of the health of the global economy. Industry analysts, economists and government officials pay close attention to developments within the mining sector to guide their strategies and policies. Continued...