Bill Cara

PDAC 2023 Report

March 8, 2023

 

The Prospectors & Developers Association of Canada (PDAC) annual convention has just ended. The management has reported 23,819 from 130 countries attended this year’s annual convention, close to pre-pandemic attendance levels. There were more than 1,100 exhibitors, covering for the first time, over 600,000 square feet of both the North and South wings of the Metro Toronto Convention Centre.

 

One thing I did see were fewer real journalists and reporters from abroad. Before Covid-19 hit in early 2020, the media room was a workspace similar to a busy editorial room of a prominent newspaper. Now it seemed more like a social room. I did chat with Andrew Bell of BNN Bloomberg TV before he dug his head into his research notes. Andrew is my favorite financial interviewer.

 

I remember my first PDAC convention at the Royal York Hotel around 1980. There were only about 800 attendees, including exhibitors. Back then, there was a lot of rowdiness as the convention brought down many party-hardy miners from Timmins and Kirkland Lake. This year, security and policing were hefty. I remarked to one heavily armed police officer that it was a quiet crowd. With a smile, he replied, “And they better keep it that way,” as if he anticipated anything more than loud conversation.

 

As usual, the booths were attended by non-executive staff, but this year I was surprised that many of the executives were there but in deal-making meetings and doing interviews.

 

Making my rounds, I admit that for the first time, I was not able in two days to get through all of it. I saw maybe 65% at most, including nothing in the North Wing.

 

But for the most part, I was pleased to meet old friends like Douglas MacQuarrie of Asante Gold, who told me that the attempted high-jacking of the company by a couple of investors at the Annual General Meeting was thwarted, barely but successfully, and that put the stock in play as the price jumped by something like +30% in the next few days. Noteworthy is that Ghanaian investors total about 40%, and the stock is listed on the local stock exchange, so sovereign funds are now getting invested. He said his short-term funding is in place for several years, but he needs about $200 million (I assume USD) for long-term needs. Anyway, his Asante has been a remarkable success due to the years of hard work he invested in Ghana.

 

At the Kinross booth, I talked with a young geologist who moved to Red Lake, Ontario, a Gold hotspot, in September to work on the Great Bear project. Great Bear will become one of Canada’s biggest gold mines. There will be a mineral resource filing in 2024, but commercial production will not be until 2029. But Great Bear will change the face of Kinross and lead to higher re-ratings. Based on the undervalued assets, I held Great Bear and Kinross before the take-over. I have recently bought more KGC.

 

B2Gold expects another re-rating because of its recent take-over of Sabina Gold and Silver. I spoke at length to Bruce McLeod, CEO of Sabina, who, despite the post-deal calls from B2Gold’s Clive Johnson, will depart the company without a personal plan. He told me he had Sabina’s total financing package lined up with debt to complete the project into production, but his board did not want debt. Then he said he found a solution with equity that would have been minimally dilutive, but the market might have gone against him, so he backed off and negotiated a friendly take-over with Clive Johnson’s B2Gold. I missed meeting Clive, someone I have invested in since 1981-1982, but Bruce said that Clive’s mining team believes they will expand the Sabina resource by three times and that production will amount to one-third of B2Gold’s total. Coming from Canada, that production will lead to analyst re-ratings because B2Gold presently has its output in less desirable countries. I hold shares in BTG and SAB.to and will be happy to see the Sabina deal completed for more shares in BTG.

 

Several times I missed meeting Scott Melbye, Executive VP of Uranium Energy Corp, which was unfortunate because I wanted to discuss more what he knows is happening in the industry expansion as the world seeks cleaner baseload energy. I hold UEC as my sole Uranium holding.

 

Copper and Critical Metals were highlights this year, as were exhibits from Australia and Brazil. There was a Peru Day that I missed attending, but I did sit in for the Bolivia Day presentations, which were excellent. As I noted earlier, Bolivia has an abundance of untapped mineral riches and has for hundreds of years produced some of the world’s biggest Tin, Gold, Silver, Lead, and Zinc mines. With political stability, the country is rapidly opening up again. The New Pacific-Tincorp team is leading the charge. I am happy to be invested.

 

I spent time with Integra Resources Corp CEO George Salamis and Chris Gordon, my IR contact. I may re-invest in ITRG (ITR.v) based on recent developments there.

 

Bob Power, Senior VP of Corporate Services of the OTC Markets Group in NYC, and I had a good talk. His booth was alongside the Canadian Securities Exchange booth. I told both sides they needed to merge and set up a Vancouver Stock Exchange.

 

I spoke with Ryan Snow, the VP of Finance of i-80 Gold, and a geologist discussing the development of that small open-pit Gold mine into underground operations below the pit that will become a much larger gold producer. I like the potential of this company’s Nevada high-grade Gold operations but await a re-entry into IAUX (IAU.to).

 

Last evening I attended the annual party of Echelon Wealth Partners, who earlier in the day reported a merger with PI Financial to create one of the most prominent non-bank-owned full-service broker-dealers in Canada. They are solid at investment banking for junior issuers. My associate Dieter Neuhaus of Echelon told me he had personally invited 160 people to the affair at the Real Sports Restaurant venue at Scotiabank Arena. I enjoyed meeting many VIPs and newbies to the Toronto financial and legal scene. The party was put on in conjunction with the Miller Thomson law firm.

 

As rheumatoid arthritis, which affected me for the past three-plus years, is gone, I had no trouble getting around the convention floor, meeting rooms, and hospitality events—just like old times.

 

That reminds me of meeting a mining editor at a PDAC convention the last year it was held at the Royal York Hotel in 1996. I had been living in the Bahamas and told my associate I was retired when he replied that I would always be a miner; it was in my blood. That was 27 years ago. I keep retiring and then returning to the PDAC. Today, I meet mining people from all over the world, and I, too, can say it’s in their blood.

 

The price of Gold was smashed this week, but the convention’s mood was upbeat, as always, and even more so this year.