Gold & Silver Ore Mining in Canada Industry Market Research Report from IBISWorld Has Been Updated

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As investors flocked to the precious metals during the recession, rising gold and silver prices helped bolster the industry's performance and profitability over the period. However, costs have been increasing for many industry operators, creating a challenging operating environment for small-scale companies. For these reasons, industry research firm IBISWorld has updated a report on the Gold & Silver Ore Mining industry in its growing industry report collection.

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Increases in the world price of gold and silver will bolster industry operators’ profit margins

Operators in the Gold and Silver Ore Mining industry in Canada have exhibited growth over the past five years. According to IBISWorld Industry Analyst James Crompton, “As investors flocked to the precious metals during the recession, rising gold and silver prices helped bolster the industry's performance and profitability over the period. However, costs have been increasing for many industry operators, creating a challenging operating environment for small-scale companies.” In the five years to 2014, industry revenue is anticipated to significantly increase.

The world price of gold is expected to increase markedly over the five years to 2014. However, the world price of gold fell significantly in 2013 and it is expected to fall even further in 2014. As economic conditions have improved around the globe, gold and silver prices have eased. The world price of silver is projected to notably decrease; this follows significant drops in 2012 and 2013. Consequently, industry revenue is forecast to decrease considerably in 2014. Though profitability remains strong for most large companies, smaller operators have experienced difficulties as prices have fallen rapidly. Therefore, merger and acquisition activity has persisted over the past five years. For example, Agnico Eagle Mines Limited and Yamana Gold Inc.'s joint acquisition of Osisko Mining by June 2014 displays the competitive nature of the acquisition activity in the industry.

Market share concentration in the Gold and Silver Mining industry in Canada is moderate. The top four companies in the industry are estimated to account for nearly half of industry revenue, and this level has been increasing over the past five years. IBISWorld expects this trend to continue as merger and acquisition activity continues. IBISWorld estimates that the number of industry operators will marginally decrease over the next five years. This decrease will likely be the result of continued acquisition activity by the largest operators, as they seek to bolster their reserve bases. Additionally, mines in close proximity to each other are typically prime targets for acquisitions and joint partnerships, as economies of scale can be realized by expanding proximate operations.

Industry revenue is projected to slightly increase in the five years to 2019. “Though investor sentiment has improved greatly since the recession, demand for gold and silver will continue to be strong as more conservative investors seek safe alternatives to equity markets,” says Crompton. Merger and acquisition activity will likely continue over the next five years, as new mining projects are slow to enter production. The largest companies, Goldcorp and Agnico Eagle Mines Ltd., will likely continue competing for market share through acquisitions, as these companies have the scale and access to capital to aggressively pursue small-scale operations. The world prices of gold and silver are both projected to moderately increase, which will help operators maintain profit levels.

For more information, visit IBISWorld’s Gold & Silver Ore Mining in Canada industry report page.

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IBISWorld industry Report Key Topics

This industry mines and prepares ores valued primarily for their gold or silver content. Some companies process ore into concentrate or bullion on site, while others maintain refining facilities abroad. Companies in this industry also can store and delay the sale of their output to speculate commodity price fluctuations.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
IBISWorld
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