LONDON Mining pipeline
activity declined significantly in the first two months of
2013, according to research and analysis company SNL Metals
Economics Group (SNL MEG).
The companys Pipeline
Activity Index, which measures the level and direction of
activity in the base and precious metals supply pipeline, for
January and February fell 43 percent vs. October 2012 levels,
representing a three-year low.
In January and February, 80
financings were completed, the lowest two-month total since
early 2009, SNL MEG said. Equity financings in February totaled
less than $300 million, including just $67 million for base
metals, it added.
"Poor equity markets have made
it extremely difficult for many junior explorers to raise
capital," SNL MEG said. "The combination of weak financing
conditions and budget cuts by major producers has resulted in
idle drills, stalled projects and lower grassroots spending as
companies focus primarily on their tier-one assets."
There has previously been room
for quick improvement in weak environments, but it is difficult
to forecast whether the index will pick up in time for the
exploration season during the Northern Hemisphere summer, the
The mining industrys
aggregate market capitalization was relatively stable in
January and February, SNL MEG said, but it is likely to slip in
the coming months because of the recent fall in gold prices and
the general lack of movement in base metals prices.
"After rebounding in January,
the number of significant drill results dropped again in
February to match December 2012 as the lowest monthly total
since 2010," the company added. "Remaining results from 2012
programs helped boost January numbers, but the low February
totals are likely to be a sign of things to come in 2013."
Despite an improvement in
significant financingsa minimum $2 millionin the
final quarter of last year, junior and intermediate mining
companies with funding needs for 2013 will likely to need to
scale back or put off plans if they cant find strategic