Mines And Money To Showcase Value In Resource Sector
(Kitco News) - Valuations in mining companies are near unprecedentedly low levels, but investor interest is growing, according to one of the organizers of the international mining investment series Mines and Money.
Andrew Thake, head of content at Mines and Money, said organizers are looking forward to bringing the conference back to New York, May 1 and 2, after a successful event in Hong Kong. He added that interest in the natural-resource sector has picked up as commodity prices have been in a solid uptrend since the start of the year.
“The total market cap of all the mining companies is less than Microsoft or Apple combined, which to me, from the perspective of a rational investor, means there is an opportunity out there,” he said.
Thake added that for the New York conference, gold is expected to be the main top of conversation as investor optimism picks up as central banks around the world introduce more dovish monetary policy.
“From what we’ve seen, there is optimism that gold prices will finish the year higher, but the question is how high prices will go,” he said.
Thake said that investor interest in gold continues to pick up as the threat of a recession looms over financial markets. Equity investors were spooked Tuesday after the International Monetary Fund (IMF) downgraded its global growth forecast to 3.3%, the slowest pace of growth in nearly a decade.
“I think many investors want to know what the gold market will look like if there is a global recession,” Thake said.
However, the conference is more than just talking about the price of raw commodities. Thake said one of the highlights of this year’s conference is the ongoing discussion of the sector’s financial future. Miners and explorers continue to suffer from a drought of investment capital.
“We’ve seen a lot of traditional primary resource funds leave the market, but we have also seen the rise of alternative financing options through private equity and streaming companies,” he said. “We’ve seen a rise in mergers and acquisitions and there will be some discussions on whether this is good or bad for the sector.”
Although the mining sector has fallen out of favor with many investors because of ongoing environmental concerns, Thake said that the New York conference will also allow companies to showcase their environmental initiatives.
“I think mining companies have a real opportunity to win over investors by highlighting their [environmental social governance] policies,” he said. “This is now the mining sector’s opportunity to show how their operations are different from 10 or 15 years ago.”