Mining convention glitters in boom times
Toronto this week plays host to mining's biggest industry blast.
By Lisa Wright
Mar 05, 2007 04:30 AM
Casino games, comedians, big band music, black tie cocktail parties, magic tricks and a celebrity chef all at the same bash, which could only mean one thing: the prospectors are coming to town.
But seriously, the global mining industry's biggest annual blast, otherwise known as the Prospectors and Developers Association of Canada convention, kicks off in high style today in Toronto for the 75th year amid continued boom times for all things metallic despite the odd hiccup.
Last week's volatile stock market that put pressure on mining stocks and metals prices will be a big part of the buzz at the conference this year as everyone wonders: Is this the beginning of the end of the remarkable run-up in resources?
Either way organizers expect a record crowd of up to 18,000 through Wednesday at the Metro Toronto Convention Centre for what's considered the motherlode of international mining finance and the must-attend industry shindig of the year.
More than half the capital for all global exploration and mining projects is raised in Toronto, including a good chunk of it here this week in the hallways and into the wee hours in the hospitality suites where, of course, there's no shortage of sales pitches and tall tales being told over a beverage.
Mining types descended on downtown in droves yesterday and got a sneak peak from the pundits on the market outlook for the rainbow of industrial and precious metals. Everyone wants to know what's on the horizon given dwindling global supply, continued strong demand yet a dearth of new discoveries to get excited about in the last few years of the current bull run.
"Demand from China could come off the boil somewhat in 2007 and 2008, which could have an impact on metals prices," analyst Victor Flores of HSBC Securities warned the audience.
The public is also welcome to attend the hard-rock bonanza that draws all walks of the mineral exploration business from the regular bush guys who stake claims to brokers and bankers, fund managers and retail investors, geoscientists and mining company executives from more than 100 countries.
Despite the gritty image of the business, you're more likely to see BlackBerrys and Burberry around the convention centre rather than work boots and pick axes. But there will be lots of rocks and ore – and then some – as miners proudly display the core samples from their latest exploration play.
"I've been trying to find last-minute accommodation for people," says Patricia Dillon, the first female president of the prospectors' group in more than 40 years and only the second in 75 years to take the helm.
"What a time to be president," she says as her BlackBerry constantly glows.
"It's fantastic. These are hot times and this is the biggest event in the industry," says Dillon.
And how. Thanks to the popularity of mining stocks in recent years, and how big this event has become, it's next to impossible to get a hotel in downtown Toronto until week's end. The Fairmont Royal York Hotel – traditionally party central for the miners – is booked solid, and has been since last October.
The City of Toronto has declared it Mineral Exploration and Mining Week, and 10,000 anniversary pens promoting the prospectors' event were handed out to commuters at Union Station last Friday. The mammoth PDAC convention pumps about $24 million into the local economy.
Since last fall there's also been a lengthy waiting list of mining business folks vying for the more than 400 investor information booths and nearly 300 exhibitor spots on the trade show floor.
"We're maxed out literally. All the signs point to another record breaker for our convention," PDAC's executive director Tony Andrews says proudly.
He says they've considered moving since they're clearly outgrowing the convention centre but there's nowhere else big enough downtown, except for the less convenient south side of the building. And they want to stay in Toronto, a mecca of mining finance and the event's historic home. The PDAC started out in 1932 at the King Edward Hotel and later moved to the Royal York but eventually outgrew both venues.
The convention has quite a colourful history, including the murder of a mining promoter by an angry creditor 20 years ago when the event was at the Royal York, and insider-trading violations more than 40 years ago that bought jail time for the only other female president of PDAC Viola MacMillan. Her name was eventually cleared and she's now in the Canadian Mining Hall of Fame.
This time around promises not to disappoint on either the serious or silly side. A special gala Wednesday evening features a casino, Canadian comedy troupe The Frantics and dancing the night away to big band tunes. Guests attending tonight's awards ceremony will each get a commemorative sterling silver pin in the shape of a rock hammer with a tiny diamond on the tip.
To coincide with the event's 75th "diamond" anniversary there will also be a draw for a 1.13-carat diamond from Ekati, Canada's first diamond mine in the Northwest Territories, worth $16,000, along with draws for gold bars and coins.
As usual the juniors are trying to top each other in their efforts to lure potential investors to their hospitality suites and special events this week. Gold investment magnate Rob McEwen, founder of Goldcorp Inc. who now runs U.S. Gold Corp., has likely outdone them all though by hiring an illusionist to entertain guests at his George St. offices with local chef Jamie Kennedy working some culinary magic tomorrow night.
"We have to remember that we're on top of an unprecedented peak in the industry. There's great demand for metals and not enough discoveries so there's a lot of catching up to do," notes Andrews.
As executive director of the miners' association for the last 20 years, Andrews has seen plenty of peaks and valleys, which comes with the territory in the typically cyclical sector.
Flashback 10 years ago and things couldn't have been worse in the industry, which was hammered by the Bre-X Minerals Ltd. gold salting scandal, rock-bottom metal prices and investor fascination with the tech sector, which was seen as far sexier than the grubby mining game.
"The downturn in 1997 was horrible. A lot of the old timers really suffered," he says.
What a difference a decade makes. Most metals are hovering in the nosebleeds, demand from China is still off the charts and a lot of the big players have gone to the altar. People can't seem to get enough of mining stocks and the event now attracts a lot of high rollers. Despite the lowly prospector persona, it's all about high finance and high-tech these days.
"We considered taking `prospector' out of the name but it's endured since 1932 because the name still has currency," he says.
Nowadays the event features wall-to-wall technical workshops for hard-core geologists along with round tables discussing challenges facing the industry, from negotiating with Aboriginal groups affected by mines to operating in politically risky countries.
There are also sessions that give investors tips on how to take advantage of the market and junior players pointers on how to finance projects.
"It's part and parcel of how Toronto is the mining business capital of the world," Andrews said.
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