TORONTO, April 2, 2007 — Junior mining companies on the TSX Venture (TSX-V) Exchange had a tremendous year in 2006. Their total market capitalization rose to $27.6 billion, a dramatic 86% increase from $14.8 billion in 2005. According to the inaugural PricewaterhouseCoopers (PwC) report on Canada's junior mining sector — review of trends in the TSX-V mining industry — investors showed their confidence and strong metal prices continued to lift the value of mining companies in these remarkable boom times for the industry.
The PwC survey examined the financial position of the top 100 of the 967 junior mining companies on the TSX-V based on market capitalization as of September 30, 2006. According to Paul Murphy, PwC partner and Canadian Mining Practice Leader, “Gold was a key reason for the growth on the TSX-V in 2006. Four of the five largest mining companies on the exchange list gold as their commodity of focus.”
The survey found that one of the most impressive numbers of 2006 was the $1.2 billion that exploration companies were able to raise through issuing shares, a 206% increase from 2005. Murphy adds, “The TSX-V is a good home for Canada's junior mining companies who can then graduate to the larger TSX when they become bigger scale producers.”
The single greatest investment by TSX-V mining companies in 2006 was the $409.4 million they put towards mineral properties and exploration. This was 79% more than in 2005. More was also spent on property, plant and equipment in 2006 for a total of $103.9 million, more than double from the year before.
“These are the kind of investments that are expected of junior mining companies and could pay high returns to shareholders if new properties are both discovered and developed to their potential,” says Murphy.
In 2006, all junior mining companies had $4 billion in total assets, $2.6 billion more than in 2005. These results follow last year's predictions by PwC that 2006 would be an even stronger year for the mining industry than 2005. PwC's mine — let the good times roll report looked at how continually strengthening commodity prices has placed the sector in a prolonged boom period. The 40 mining companies included in mine represent over 80% of the total global industry by market capitalisation. Mine showed that investor confidence in the worldwide mining industry and its prospects have continued to strengthen — much like they have for junior mining companies on the TSX-V.
This year's junior mining survey showed that the combined market capitalization of the top five companies on the TSX-V more than doubled in 2006 to $3.7 billion from $1.7 billion in 2005. The top five's share of the TSX-V's total value rose slightly from 11.4% to 13.4%. This demonstrates the overall growth of the TSX-V during the year, as most companies of all sizes saw value appreciation for their shareholders. The top five companies in 2006 by market value (exploration/production) were:
- Urasia Energy ($1.23 billion) — production
- Aurelian Resources ($826.6 million) — exploration
- Northern Dynasty Minerals ($657.4 million) — exploration
- ECU Silver Mining ($569.2 million) — production
- Seabridge Gold Inc. ($474.9 million) — exploration
This survey has covered financial statements filed by registrants to June 30, 2006 into a common format and aggregated data across companies. For those companies that have not yet released any financial statement data as of June 30, 2006, estimations were made. For a copy of the survey, contact:
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