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EY Canadian Mining Eye index sees modest improvement in second quarter

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The EY Canadian Mining Eye index saw modest improvement in second quarter performance, up one percentage point from Q1 2018.



Index comparisons Q2 2018 Q1 2018
Canadian Mining Eye index 1% -7%
UK Mining Eye 1% -10%
S&P/TSX Composite Metals and Mining index 6% -6%
Major index 2% -4%




Gold prices were down by 5% in Q2 2018, compared with a 2% gain in the first quarter of the year. The decline in prices was due to strength in the US dollar and the recent US Federal Reserve rate hike of 0.25% in June. The possibility of further rate hikes, coupled with concerns regarding US tariff and trade policies means gold prices have the potential to remain range bound in the second half of the year.



“Gold was one of the primary drivers contributing to increased exploration budgets – which rose last year after four consecutive years of declines in the sector,” says Jim MacLean, EY Canada Mining & Metals Leader. “Companies globally are looking to keep the exploration spend booming in 2018, underscored by positive trends in metal prices.”



Nickel prices increased 12% in Q2 2018, on top of 4% gains seen in Q1 2018. Prices are expected to trend even higher in the long term, attributable to robust demand for rechargeable batteries used in electric vehicles and, in part, by declining inventories in 2018.



Meanwhile, copper and zinc prices decreased by 1% and 11% respectively in the second quarter. Both metals are expected to benefit from changing demands and supply markets disruptions moving forward.



“Mining and metals companies are expressing more interest in the potential for battery technology, but we haven’t seen any significant investment by large players in the cobalt space yet,” says Jay Patel, EY Canada Mining & Metals Transactions Leader. “First, they need to understand the impact changing attitudes and technologies will have on demand for new and traditional metals. Then, evaluate the right avenues for strategic growth that will position their portfolios to effectively respond to changing markets.”



Special section – Q&A with George Burns, President and CEO of Eldorado



The EY Canadian Mining Eye Q2 2018 also features an interview with George Burns, President and CEO of Eldorado, who shares key success factors for running a global company, including how to build greater transparency with the public.



Burns tells EY: “The industry as a whole has greatly improved its environmental performance over the last three decades and has embraced technology to find ways to continue to responsibly produce the metals we need for the world we live in. From my perspective, it’s important to keep the public informed about what we do, why we need the metals we need and how we can produce them in the most sustainable and environmentally friendly way.”



To access the complete interview and the Canadian Mining Eye Q2 2018, visit



About EY



EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.



EY refers to the global organization and may refer to one or more of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit


Posted August 15, 2018

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