VANCOUVER, BC - In an international report released this week by The Mining Recruitment Group Ltd- a Vancouver based executive search firm focused on the resource industry- 162 mining executives from TSX and TSXV companies revealed their outlook on the strength and viability of the sector over the short and long-term in addition to the current management strategies being employed. This survey is a direct follow-up to others administered in June of 2013 and October 2012, providing a snapshot in time of the issues of the day and a look into the mind’s eye of executives tasked to lead through them.
Andrew Pollard, President of The Mining Recruitment Group Ltd, states that "At the time of our last polling in Q3, sentiment was at newfound lows coinciding with the Venture market finding bottom. As we enter Q4, the issues faced by miners remain the same though it is evident we are in the midst of a recovery, no matter how tepid it has been to this point. Though short term sentiment is hardly positive, the pessimism is clearly dissipating amongst executive participants."
According to mining executives, the next 6-12 months will be bleak, though the outlook has noticeably improved since our Q3 polling. 52% of respondents have a bearish view as to the overall strength of the Industry over the short term, down from the 64% that held the same sentiment 3 months ago. Executives who hold a bullish view over this time period are also up slightly, going from 9% to 11% in our Q4 polling. It would seem the greatest change in sentiment has come from those executive who held a bearish view at the time of our last polling, now moving to a neutral outlook, accounting for 37% of respondents.
When asked the same question but with a longer term (3 year) view, executives appear to be getting even more upbeat with 74% of executives holding a bullish outlook. This is up from the 66% of respondents holding the same view in our Q3 polling. Down dramatically from our previous polling are the 4% of executives that hold a bearish outlook, down from 11% in Q3. With the remaining executive holding a neutral outlook over a 3 year time-frame it is evident that in the minds’ eye of executives the fundamentals of the sector as still very much intact.
Pollard states "Though amongst executives the general consensus is that the Markets won’t turn around in the short-term, having administered such surveys over the past 5 years to our database, the one thing that is evident is that general consensus, whether positive or negative has been almost always wrong in terms of what actually ends up playing out in the markets. Our Q4 report from 2012 had only 11% of executives holding a "bearish" outlook on the upcoming year for the Sector; perhaps the negativity so rampant amongst executives now is the perfect indicator of what could be a massive turnaround."
In terms of what commodities will likely see the greatest gains over the next 3 years, Gold is still the clear winner with 74% of mining executives thinking it will shine the brightest. Copper came a close second with 64% of respondents expecting to see massive appreciation in the metal while Silver rounded out the top 3 at 53%. Prospects for Uranium have fallen off, down from 53% in our last polling to 33% .Commodities that executives see as having the highest likelihood of depreciating in value over the next 3 years are, Nickel, Zinc and Iron Ore respectively with 40%, 36% and 31% of the multiple selection vote.
In a new question added to the survey, executives were asked their outlook on capital raising in Q4 as compared to the previous 6 months. 25% of executives expect raising funds in Q4 will get harder. That being said, only 17% of executives are of the mindset that it will get easier with 58% of respondents indicating it will likely remain equally difficult.
76% of executives have indicated that the fear of a sustained downturn has impacted their budgeting and hiring behavior. When asked if layoffs or employee reductions were being seriously considered for Q3, 45% of respondents indicated that they were. This is almost identical to our June polling where 46% of respondents had indicated the same.
69% of respondents do not expect to recruit over the next six months, up slightly from the 62% who had indicated the same expectations during our Q3 polling. This is almost diametrically opposite from our Q4 polling from last year where 66% of executives had indicated that they would be hiring.
In another new question added to our Q4 polling, we asked executives on whether they saw themselves retiring within the next 5 years. Only 61% of executives polled indicated that they had no intentions of retiring or reducing their workloads over the next 5 years, leaving 39% of those in the boardrooms planning their departure in one form or another.
In spite of this, only 22% of executives stated that their companies had any sort of succession plan in place. "In the grand scheme of things, 5 years is a blink of an eye and we will likely see the cascading effects of this start to pick up in steam in a very noticeable way within the next year or two"
Pollard goes on to say that "If you are at the mid-point of your career right now, it is reassuring to know that the opportunities out there for you in a few years will be countless. For those Companies needing to find key successors, the war for experienced talent will rage beyond anything this Industry has ever seen as the experience gap widens."
Key Report Findings:
· When asked about their short term (6-12 month) outlook on the overall strength of the mining industry only 11% of executives were bullish to any degree.
· Only 17% of respondents think that raising capital will get easier in Q4 as compared to the past 6 months.
· 39% of executives revealed they expect to retire or plan to drastically reduce their workload within 5 years.
· 45% of executives indicated that additional layoffs are being considered for Q4
· Only 12% of executives indicated that their Company is actually spending more on Investor Relations and Marketing compared to one year ago. Almost equally dismal, only 8% of respondents said they have increased their exploration spend.
· 69% of respondents do not expect to recruit over the next six months, up slightly from the 62% who had indicated the same expectations during our Q3 polling.
· Gold, Copper and Silver expected to perform the best over the next 3 years.
Those that took part in this survey were executives from mining companies of all sizes and stages. The lions’ share of the 162 responses came from executives at companies that would primarily be described as explorers at 52%. Among those remaining, 33% were primarily at the development stage and 15% were producers. Of those polled, 71% came from companies with market caps below $50m, 13% from companies between $51M-$250M, and 11% from companies with market caps between $251m-$1b. Additionally, 5% were made up of executives from $1b+ entities. The percentage of respondents coming from sub-$50m market cap companies is very high, though given the massive sell-off mining equities have faced recently, it is our opinion that these findings represent a true cross section of the industry at this point in time. Pointedly, more responses came from smaller companies because there are now many smaller companies in the marketplace.
About The Mining Recruitment Group Ltd.
Established in 2006, The Mining Recruitment Group(MRG) is a leader in executive search for emerging junior and mid-cap mining companies. Since our inception, we have advised companies ranging in size from $5M to $20B in market cap and have been involved in successful searches spanning all senior executive and functional leadership positions within the mining industry.
To Request a copy of the Report with detailed findings or to schedule an interview with Andrew Pollard please email firstname.lastname@example.org
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