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2020 was certainly a year like no other with the COVID-19 pandemic causing widespread impacts on everyday life, on economies around the world and the supply chains that interconnect the global business environment. The shifting dynamics over the last 18 months have led to a surge in most commodity prices and the disruptive forces caused by the pandemic may have ripple effects on the mineral industry for several years to come.

Metal Prices

Figure 1 below presents the 2020 year-over-year change of the metal prices PDAC monitors.

Figure 1
Iron Ore was at the top of the chart in 2020 in terms of a year-over-year price change while precious and base metal prices also showed material gains over the year. In contrast, battery metals such as cobalt and lithium recorded the third consecutive year where prices declined. The next set of Figures 2-4 provide a more detailed outline of metal price dynamics of key metals. 

Figure 2 below presents the spot prices of several key metals from January 2020 until May 2021 and show the upward trends throughout most of this period.

Figure 2

After some initial price shocks in the first months of 2020, as the COVID-19 pandemic began setting in, gold, copper and iron ore gradually trended upwards through the middle part of the year, however, the driving factors were markedly different. 

Monetary and fiscal stimulus actions across many economies provided a tailwind for gold in Q2/Q3 but as vaccine development progressed and the medium-to-long term economic outlook improved globally, the price of gold pulled back from the all-time highs reached in August.

In contrast, copper and iron ore prices were largely being driven by both supply and demand factors. A wide array of operational restrictions resulted from COVID-19, causing supply interruptions from various production centres over the course of the year and stockpiles to deplete. On the other side of the balance, demand for industry materials remained intact through 2020 with the long-term outlook being bolstered by an expedited recovery in China, the progress of vaccinations, and economic stimulus efforts around the world. 

Looking back over the past decade, figure 3 presents the long term price trends of these three key metals, based on monthly average prices.

Figure 3

The figure shows that the trends of these three key metals take a similar profile with the low-points recorded in late 2015 / early 2016. The impacts of the COVID-19 pandemic appear quite stark in the Figure above and while gold has pulled back from a peak in August 2020, copper and iron ore prices continued higher to reach all-time highs in May 2021.

Finally, figure 4 below present the long term price trends of lithium and cobalt – the two key battery metals.

Figure 4_REP

Battery metal prices continued on a downward trend in 2020, bottoming towards the end of the year. With most economies around the world beginning to reopen in 2021 and with eyes now looking toward ambitious infrastructure and emission reduction plans by various governments, and particularly after the election of President Biden in the U.S., cobalt and lithium prices have surged upward.


Figure 5 shows the share of equity financing raised in Canada throughout the past decade
Figure 5

The amount of equity raised by the mineral sector globally rebounded in 2020 with a nearly 50% year-over-year increase. Despite this notable increase, the total equity raised in markets outside of Canada in 2020 remains well below pre-2018 levels.

There is a silver lining for Canada as 2020 represented the 3rd consecutive year where Canadian exchanges recorded an increase in the proportion of total equity raised for the industry, bringing it to the highest level reached in at least a decade. However, it is important to keep in mind that Canadian exchanges are recording an increased share of a much smaller pie when compared to financing levels pre-2018.

Figure 6 below shows equity funds that were raised specifically for mineral exploration.

Figure 7

The figure reveals similar dynamics in 2020 with respect to this financing type. A significant improvement in both global and domestic financing (32% and 37%, respectively) provided strong year-over-year rebound - but the total raised in 2020 remained well below levels recorded a decade ago.

The next series of figures (7-10) focus on financing on Canadian stock exchanges. Figure 7 disaggregates between funds raised on the TSX and TSX Venture (TSXV).

Figure 7

Taking a closer look at these two exchanges we see mixed results. The year-over-year improvement in financing observed in 2020 didn’t split evenly. As the figure above reveals, companies listed on the TSXV contributed to a 90% increase in funds raised relative to 2019 whereas the increase for the TSX exchange was a still strong, but more modest 25%. And while the C$4.1 billion raised in TSXV is second highest financing number recorded next to 2011, the C$3.4 billion raised on the TSX was well below pre-2018 funding levels.

Similar trend is reflected when looking on funds raised in Canada while reviewing their sources – private or public funds (public offerings plus IPOs) as Figure 8 shows.
Figure 8

 On one hand, it is encouraging that after many years of decline in public fundraising, in 2020 we saw an impressive year-over-year increase in public funds that help to broaden and diversify the company’s investor base. However, the absolute amount of public funds raised in 2020 is still relatively low compared to levels of financing in or before 2016.

 Another notable data point is the high number of equity transactions, as seen in Figure 9 below.
Figure 9

The figure indicate that in 2020 the number of equity transactions was the highest since 2012. It also shows that the proportion of total funds raised via top 10 largest transactions decreased from ~60% in 2015 to less than 20% in 2020. . This shift suggests that an increasing amount of the dollars raised in 2020 were distributed to a broader suite of companies, and implies an improved financing environment for juniors manifested during the year.

Figure 10 shows that 2020 was very good in terms of flow-through share (FTS) financing, with over $900M raised via the FTS mechanism – the highest level since 2011.

Figure 10

The figure shows that 2020 was very good in terms of FTS financing, with over $900M raised via the FTS mechanism – the highest level since 2011. Based on exploration trends outlined in the subsequent figures, increased domestic investment appears to responding to the increase in the gold price throughout 2020 as domestic precious metals exploration activity is up substantially from 2019.

A spark in FTS deals in mid-2020 was likely influenced by the Government of Canada responding to PDAC’s advocacy efforts and deferring timelines associated with FTS funds raised in 2019 and 2020. This decision was in response to the COVID-19 pandemic and provided companies with needed flexibility to access strong equity markets and be confident exploration plans could be executed.

Funds raised using the FTS financing can be spent only in Canada, and therefore have become a very significant source of funding for exploration in Canada, with ~70% of the funds obtained through this mechanism. Moreover, for sub-$20 million transactions, which are more typical for junior exploration companies, the proportion of funding sourced from FTS increases to nearly 80%.

Exploration Expenditure

The last series of figures (11-14) show trends related to the use of the proceeds on exploration activities. First, Figure 11 present global exploration expenditure, disaggregated by region.

Figure 11
The figure reveals that in 2020 global expenditure declined 10% year-over-year. This decline can be somewhat attributed operational delays linked with various COVID-19 restrictions, but also related directly to the weak financing environment in 2019.

2020 exploration activity levels in Canada remained relatively static from a year prior, and the proportion of global spending directed towards Canada remains well below levels achieve in the previous decade – from ~21% of global activity in 2008 down to ~15% in 2020.

The next two figures address global and Canadian global exploration activity from two different perspectives. Figures 12 presents global and domestic exploration spending in 2008 and 2020, disaggregated by on project stage.

Figure 12

The figure reveals a long term decline in the amount of global spending on grassroots projects, both globally and domestically. 2020 represents a new low for Canadian grassroots exploration spending and the first time it has been proportionally lower than activity abroad.
Figure 13 below disaggregates exploration expenditures by company type. 
Figure 13

It's important to note that domestic exploration spending showed similar long-term declining trends. In fact, 2020 will represent a new low for Canadian grassroots exploration spending and the first time it has been proportionally lower than activity abroad.

Lastly, Figure 14 concludes the overview by presenting the exploration expenditures in Canada by province. 
Figure 14

For 2021, NRCan projects that mineral exploration spending in Canada will increase nearly 40% year-over-year, with an increase in all provinces and territories. However, under a 2-year term comparison (2021 vs. 2019), half of the regions in Canada will see exploration activity below pre-pandemic levels. This impact is most seen most acutely in the Territories, where exploration spending is projected to be down over 35% on average over this 2-year period.

As a final note, Quebec stands out relative to all other regions in Canada in 2021, as mineral exploration activity is expected to nearly double from a year ago and could account for 1/3 of all domestic spending in 2021. While the increase in gold price is likely a significant driver behind the increase of activity in Quebec, we are also likely seeing the results of proactive mineral development and infrastructure policies, as well as institutional frameworks that have been established in the province.


The figures in this report are based on PDAC analysis of data sourced from S&P Global Market Intelligence, TMX Group and Natural Resources Canada (NRCan). 

1. Metal Prices (Figures 1-4): S&P Global Market Intelligence and PDAC analysis 
2. Financing (Figures 5-10): 
 • Figures 5-6:  S&P Global Market Intelligence and PDAC analysis
 • Figures 7-9: TMX Group and PDAC analysis 
 • Figure 10 – TMX Group, S&P Global Market Intelligence and PDAC analysis
3. Exploration Expenditures (Figures 11-14):
 • Figures 11-13: S&P Global Market Intelligence and PDAC analysis
 • Figure 14: NRCan and PDAC analysis