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Canadian mining equities witnessed a 45% decrease in market capitalization over the course of 2013, according to EY’s Canadian Mining Eye: Q4 2013.

Read: Four keys to mining success

The index decreased 9% in Q4 alone as concerns around global economic growth and uncertainty surrounding the Federal Reserve stimulus program continued.

Declining metal prices also spurred significant write-downs in the value of assets across the sector. Companies were reluctant to raise equity capital on dilutive terms and witnessed less capital readily available in a soft market. Total proceeds raised were approximately $6.9b, down 49% compared to the same period in 2012.

Though these market forces are already setting the stage for a modest year of transaction activity, growth opportunities continue to exist for companies across the sector. In 2014, expect:

  • Majors to continue disposing of non-core assets
  • Mid-tiers with cash flexibility to take advantage of inorganic growth opportunities
  • Juniors with good quality assets and de-risked projects to attract buyer interest

Also read:

Top 10 mining trends for 2014

Quebec’s mining rules spook investors

Originally published on Advisor.ca

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