It can be argued the Chinese need to pay more attention to early stage exploration – otherwise they leave the field open to others committed to the long game in minerals and metals.
TORONTO (MINEWEB) - It must be said. The Chinese are MIA at the PDAC – absent in playing an important role in funding and driving Canadian mineral explorers and exploration. In my PDAC miles so far this year, it strikes me that by now the Chinese should be an undercurrent in Canadian exploration and investment.
They are instead the anomaly.
Their role here – in the still undisputed centre of global mineral exploration – should be a natural extension of their interests and needs. The Chinese have a dominant position as metal consumers. They are exhausting high quality domestic resources. They are, intelligently so, closing their smaller, dirtier and more dangerous mines. And, of course, they have an abundance of cash and perhaps more importantly a stated desire to secure supply. That cannot, as the case has largely been so far, mean a role focused just on mineral development. Longterm supply demands, more than anything else, calls for careful attention to early stage exploration.
Yet so few early stage exploration companies boast an important Chinese investor. It’s clear, coming from the floor at the PDAC, the Chinese are not plying the crowd of PDAC in droves looking for investments or that they have already done so and invested. There are few exploration stories out there with a Chinese narrative. How many times have you seen the name Tianjin or Jinshan in an explorer’s presentation? Now, how about the names Dundee, Tocqueville, Forbes & Manhattan, Sprott, Teck, Antofagasta, Cliffs, Kinross and etc., etc., etc.
On the floor, for the record, in my wanderings and inspection, I have so far come across one company with significant Chinese investment (and not early stage at that). They’re not the only one, I know, but I nonetheless challenge anyone to count more than the fingers on one hand the number of juniors at PDAC with significant Chinese investment. (1. Selwyn…) The company I saw was Huakan. I’m ignorant of Chinese language, so their CFO, Fiona Leung, kindly informed me “Hua” refers to China and “kan” refers to exploration.
More to the point, about three quarters of Huakan stock is owned by Tianjin, a state-owned exploration firm from China. I’m told they have some 5,000 employees and 500 geologists. Huakan owns a gold-polymetallic deposit in B.C. that it acquired from a company in receivership. It’s not a massive enterprise, but Leung told me Tianjin sees Huakan as a vehicle for other projects. Indeed, for Tianjin, at least, it has been a learning exercise as regards operating in Canada. Leung said that at first Tianjin brought, for the most part, their own management over from China to Canada. It didn’t go smoothly, she said. So they recently brought on more Canadian management. It’s part of wising up to “understanding the local practises” for the Chinese firm.
On the one hand it’s gratifying, I think, to see the Chinese getting their hands dirty in Canadian exploration. But on the other, it underscores the pathetic amount of money flowing from the Far East. Especially, I repeat, to early stage exploration.
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