State of the Market: Mining Q1-2020 For the latest insights, visit:

How did COVID-19 affect the mining sector? spgobal.com/mining-sector-insights

COVID-19 Mines Closure At a Glance Mine Shutdowns Lower Gold Forecasts

Based on our projections in February 2020, we expected an increase of
265 2 million ounces in 2020 gold production. Following mine closures due to
Impacted mines identified across 34 countries, from mid-March. COVID-19, we estimated 2020 gold production will be reduced by 2.7 Moz to
105.1 Moz. Latin America will be the most impacted with production reduced
50% by an estimated 1.3 Moz. The cut may be deeper in the event of more virus
About half of the impacted mines had resumed operations by early May.
waves. See our interactive infographic for the full chart >
Peru
Peru was expected to be the most impacted country with an estimated 2020 Forecast (As of May 1, 2020) 2020 Forecast (As of Feb 2020)
US$1.89 billion in revenue at-risk. This is followed by Chile and Mexico.
China 11.06 Moz
Australia 10.32 Moz
Gold Russia 9.82 Moz
Mexico had the greatest gold production at-risk, estimated to be US 6.79 Moz
400,000 oz. Canada 6.45 Moz
Ghana 4.24 Moz
Highest Revenue At-Risk Project Mexico 3.82 Moz
Copper-primary mines in Chile and Peru had the highest at-risk revenue. Uzbekistan 3.45 Moz
Peru 3.41 Moz
South Africa 3.36 Moz
Related article > Others 42.42 Moz
0 5 10 15 20 25 30 35 40 45
Production (Moz)

Latin America Tops in Financing Quarterly Financing Down QOQ But Up YOY
Of the financings that could be allocated to a specific region, Australia and While financing levels declined by US$5.5 billion from the previous quarter,
Latin America accounted for 45% of the funds raised in Q1. Australia had a the US$10.6 billion raised in Q1 was more than three times the amount
significant decline in Q1, following a nine quarter high of US$1.5 billion in raised in Q1'19. However, Q1 financings were mostly in the form of debt.
Q4. However, Latin America's financing levels more than doubled from the Notes and bonds issued by companies, large and small, accounted for 85%
previous quarter, and took the largest share in Q1. of Q1'20 total, compared with an average of 58% through 2019.
See our interactive infographic for the full chart >

Q1-2020 Q4-2019 Q3-2019 Q2-2019 Q1-2019

Canada Junior US$0.78B

US$295M Europe
Canada
US$583.9M
US$295M
United States Intermediate US$1.19B
epyT ynapmoC

APAC & Middle East

US$384.7M
US$588.8M
Africa Major US$8.65B
US$289.1M

Latin America
US$892.8M
Australia Other 0
US$833.1M

TOTAL US$10.62B
2 4 6 8 10 12 14 16
Funds Raised (US$B)

Exploration Budgets to Drop 29% in 2020 Smaller Deals Keep Mining M&A Strong
A combination of COVID-19, poor commodity price performance (except Aggregate value of M&A during Q1 fell to just US$2.3 billion. Deals went up
gold), narrowing margins and the likelihood of more M&As, was expected to from 21 in Q4'19 to 26 in Q1'20. This translates to an average deal size of
bring exploration budgets down to a 15-year low of less than US$7 billion. about US$87 million, the second lowest for the past eight quarters. The
Related article > large majority of the deals announced were in gold projects (96%).
See our interactive infographic for the full chart >
22
)B$ SU( tegduB noitarolpxE detamitsE

20
18 Deal Value (US$B) Deal Count
16
14 Q1 2020 US$2.34B
12
10 Q4 2019 US$9.51B
8
6
Q3 2019 US$1.59B
4
2
0 Q2 2019 US$3.31B
0 5 10 15 20 25 30 35
60

01

41

81

0
0

2
0

0
2

Source: S&P Global Market Intelligence [State of the Market: Mining Q1-2020 Webinar, May 14, 2020)

Understand the impacts of COVID-19, learn more about our Metals & Mining intelligence, request a demo >
3,600+ mining companies 15 Commodities covered by 20+ years of exploration budget 10,000+ news and research Covered nearly 39,000 drill holes
35,000+ mining properties Mine Economics cost curve data. 3,100+ companies surveyed in articles published in the last and 2,900+ capital offerings by
6,000 operating mines model and datasets 2019 for their exploration budgets twelve months mining companies in 2019

spglobal.com/metals-and-mining Copyright © 2020 by S&P Global Market Intelligence, a division of S&P Global Inc. All rights reserved. No content, including by framing or similar means, may be reproduced or distributed without the prior
written permission of S&P Global Market Intelligence or its affiliates. The content is provided on an “as is” basis. If you wish to distribute this information, contact: market.intelligence@spglobal.com ©
Copyright by S&P Global Market Intelligence 2020. All rights reserved. SPGMI780 | 0620
State of the Market: Mining Q1-2020 For the latest insights, visit:
How did COVID-19 affect the mining sector? spgobal.com/mining-sector-insights

Mining Industry Capitalization and the Global Drilling Projects Increased

Pipeline Activity Index (PAI) Down Drilling activity rose 4% to 508 projects in Q1, the third consecutive
quarterly increase. This increase came entirely from gold drilling.
In Q1, the mining industry market capitalization fell by 29%, the lowest in
Related article >
sixteen quarters. Nevertheless, the PAI performed better than a year ago,
largely driven by an increase in drilling activity. Related article > Copper Gold Lead-zinc Silver Nickel PGM
Minor Base Metals Specialty Commodities
600

dellird stcejorp evitcnitsid fo .oN

Mining Industry Market Cap Exploration Price Index (EPI)
Pipeline Activity Index (PAI)
2 160 500
1.8 144
)noillirT$ SU( paC yrtsudnI gniniM

1.6 128 400

1.4 112
1.2 96 300
1 80

IPE & IAP

0.8 64 200
0.6 48
0.4 32 100
0.2 16
0 0 0

6 2-2
6 2-3
6 2-4
6 2-1
7 2-2
7 2-3
7 2-4
7 2-1
8 2-2
8 2-3
8 2-4
8 2-1
9 2-2
9 2-3
9 2-4
9 2-1
0
5 02 Q
5 02 Q
5 02 Q
5 02 Q
6 02 Q
6 02 Q
6 02- Q
6 02 Q
7 02 Q
7 02 Q
7 02 Q
7 02 Q
8 02 Q
8 02 Q
8 02 Q
8 02 Q
9 02- Q
9 02 Q
9 02 Q
9 02
0

1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

2
2

-
-
-
-
-
-
-
-

-
-
-
-
-
-
-
-
-

-
-
-

1
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
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1

Q
Q
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Copper Market Outlook Iron Ore Market Outlook

Global refined copper market was expected to hit a 182,000-tonne surplus in The iron ore market was likely to stay relatively balanced in 2020 and 2021.
2020, while demand forecast for refined copper was likely to fall a 3%. Global steel production fell 1.4% YOY in Q1, with a 6% drop in March.

Balance (000 t) LME 3 Mth Copper Price (US$/t) Global Seaborne Trade Balance (Million Tonnes) 62% Fe Iron Ore Price (US$/dmt CFR)
1.4K 10000 40 120
)sennoT noilliM( ecnalaB edarT enrobaeS labolG

1.2K 8750 35 108

)RFC tmd/$ SU( ecirP erO norI eF %26

30 96
1K 7500
)t/$ SU( ecirP reppoC htM 3 EML

25 84
0.8K 6250
20 72
)t 0 0 0( e c n al a B

0.6K 5000 15 60

0.4K 3750
10 48
5 36
0.2K 2500
0 24
0 1250 -5 12
-0.2K 0 -10 0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2014 2015 2016 2017 2018 2019 2020f 2021f 2022f

Nickel Market Outlook Zinc Market Outlook

The global primary nickel market was expected to move to a 48,000-tonne The zinc market surplus was expected to decline to 90,000 tonnes in
surplus in 2020 from a 33,000-tonne deficit in 2019. The LME 3-month 2020 before entering a deficit later in 2021.
nickel price was expected to fall to an average US$11,915/t in 2020.
Refined Balance (000 t) LME 3 Mth Zinc Price (US$/t)
150 3500
Primary Balance (000t) LME 3-Mth Nickel Price (US$/t)
100 16000
100 3000
50 14000
50 2500
)t/$ SU( ecirP lekciN htM-3 EML

)t/$ SU( ecirP cniZ htM 3 EML

)t 000( ecnalaB denfieR
)t 000( ecnalaB yramirP

0 12000
0 2000

-50 10000
-50 1500

-100 8000
-100 1000

-150 6000
-150 500

-200 4000
2015 2016 2017 2018 2019 2020 2021 2022 -200 0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Source: S&P Global Market Intelligence [State of the Market: Mining Q1-2020 Webinar, May 14, 2020)

Understand the impacts of COVID-19, learn more about our Metals & Mining intelligence, request a demo >
3,600+ mining companies 15 Commodities covered by 20+ years of exploration budget 10,000+ news and research Covered nearly 39,000 drill holes
35,000+ mining properties Mine Economics cost curve data. 3,100+ companies surveyed in articles published in the last and 2,900+ capital offerings by
6,000 operating mines model and datasets 2019 for their exploration budgets twelve months mining companies in 2019

spglobal.com/metals-and-mining Copyright © 2020 by S&P Global Market Intelligence, a division of S&P Global Inc. All rights reserved. No content, including by framing or similar means, may be reproduced or distributed without the prior
written permission of S&P Global Market Intelligence or its affiliates. The content is provided on an “as is” basis. If you wish to distribute this information, contact: market.intelligence@spglobal.com ©
Copyright by S&P Global Market Intelligence 2020. All rights reserved. SPGMI780 | 0620