21222CA Gold & Silver Ore Mining in Canada Industry Report

Gold & Silver Ore Mining in CanadaJune 2016 1
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Worth its weight: Demand for gold and silver

will bolster industry revenue
IBISWorld Industry Report 21222CA
Gold & Silver Ore

Mining in Canada
June 2016
Gavan Blau
2 About this Industry
15 International Trade
Industry Definition
17 Business Locations
Main Activities
Similar Industries
19 Competitive Landscape
31 Industry Data
Additional Resources
19 Market Share Concentration
31 Annual Change
19 Key Success Factors
31 Key Ratios
3 Industry at a Glance
30 Industry Assistance
31 Key Statistics
19 Cost Structure Benchmarks

21 Basis of Competition
4 Industry Performance
22 Barriers to Entry
Executive Summary
23 Industry Globalization
Key External Drivers
Current Performance
24 Major Companies
Industry Outlook
24 Goldcorp Inc.
10 Industry Life Cycle
25 Agnico Eagle Mines Ltd.
12 Products & Markets
27 Operating Conditions
12 Supply Chains
27 Capital Intensity
12 Products & Services
28 Technology & Systems
13 Demand Determinants
28 Revenue Volatility
14 Major Markets
29 Regulation & Policy
32 Jargon & Glossary
www.ibisworld.ca | 1-800-330-3772 | info @ibisworld.ca
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About this Industry

Industry Definition
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
Main Activities
The primary activities of this industry are
others maintain refining facilities abroad.

Companies in this industry can also store
and delay the sale of their output to
speculate commodity price fluctuations.
Gold ore mining

Silver ore mining
Gold ore beneficiation
Silver ore beneficiation
The major products and services in this industry are

Gold ore, powder, concentrates and unwrought forms
Silver ore, powder, concentrates and unwrought forms
Similar Industries
21211CA Coal Mining in Canada

Companies in this industry mine coal
21221CA Iron Ore Mining in Canada
Companies in this industry mine iron ore products
21223CA Copper, Nickel, Lead & Zinc Mining in Canada
Companies in this industry mine copper, nickel, lead and zinc products
21239CA Mineral & Phosphate Mining in Canada
Companies in this industry mine a wide variety of minerals and phosphate products
Additional Resources
For additional information on this industry

www.camiro.org
Canadian Mining Industry Research Organization
www.mining.ca
The Mining Association of Canada
www.silverinstitute.org
The Silver Institute
www.gold.org
World Gold Council
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Gold & Silver Ore Mining in Canada June 2016
Industry at a Glance
Gold & Silver Ore Mining in 2016
Key Statistics
Snapshot
Revenue
Annual Growth 11-16
Annual Growth 16-21
Profit
Exports
Businesses
$7.6bn
4.6%
0.8%
30
$-76,223.0 $3.6bn
Consumer confidence index
Revenue vs. employment growth
Market Share
Goldcorp Inc.
19.4%
60
110
45
100
30
Index
% change
Agnico Eagle
Mines Ltd.
19.2%
15
0
80
-15
-30
Year 08
90
10
Revenue
12
14
16
18
20
22
70
Year 07
09
11
13
15
17
19
21
Employment
SOURCE: IBISWORLD
p. 24
Products and services segmentation (2016)
3.2%
Silver ore, powder, concentrates

and unwrought forms

World price of gold
World price of silver

Consumer
Confidence Index
Canadian-dollar effective
exchange rate index
Demand from computer
and electronic product
manufacturing
96.8%
Gold ore, powder, concentrates

and unwrought forms
p. 4
SOURCE: IBISWORLD
Industry Structure
Life Cycle Stage

Revenue Volatility
Capital Intensity
Mature
Medium
High
Regulation Level
Technology Change
Heavy
Medium
Barriers to Entry
High
Industry Assistance
Medium
Industry Globalization
High
Concentration Level
Medium
Competition Level
High
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 31
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Industry Performance
Executive Summary | Key External Drivers | Current Performance

Industry Outlook | Life Cycle Stage
Executive
Summary
Operators in the Gold and Silver Ore

Mining industry in Canada have exhibited
growth over the five years to 2016, with
industry revenue anticipated to increase at
an annualized rate of 4.6% to reach $7.6
billion during the period. This growth has
largely been driven by increasing
production volumes of gold, as both gold
and silver prices have fallen from historic
highs during the period. Up until 2012,
when gold and silver prices hit their peak,
industry operators ramped up production
to take advantage of high prices, driving up
Increases
in the world prices of gold and silver

will bolster industry operators profit margins
industry revenue. However, gold and silver
prices have fallen in recent years; gold
prices fell 15.4% in 2013 and 10.2% in 2014,
while silver prices fell 23.4% and 20.0% in
each of those years. Furthermore, costs
have increased for many industry
operators, creating a challenging operating
environment for small-scale companies. As
a result, industry revenue is expected to
ease 0.5% in 2016.
Falling prices have severely impacted
industry profitability, with the industry
operating at a loss since 2013, led by
World price of gold

The world price of gold is highly correlated
with this industrys performance. Gold has
historically served an important role in
investment markets as an inflation hedge
and a safe haven during times of economic
duress. When the price of gold increases,
mining companies benefit from higher
margins. In 2016, the world price of gold
is anticipated to increase.
World price of silver
The world price of silver impacts the
industrys revenue and profitability.
major players Goldcorp and Barrick.

However, prices are seemingly stabilizing,
allowing industry operators to once again
turn a profit in coming years. As a result of
weak profitability, major players have
sought to leverage economies of scale,
driving merger and acquisition (M&A)
activity. For example, Agnico Eagle Mines
Limited and Yamana Gold Inc.s joint
acquisition of Osisko Mining in June 2014
displays the competitive nature of
industry acquisition activity.
Over the next five years, M&A activity
will likely continue 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 smallscale operations. Goldcorps new mine,
Eleanore, will approach full production,
driving up production volume. During the
five-year period, the world price of gold is
projected to decrease at an annualized
rate of 0.8%, while the price of silver is
expected to rise at an average annual rate
of 1.5%. As a result of increased gold
production, industry revenue is projected
to increase at an annualized rate of 0.8%
to an estimated $7.9 billion in the five
years to 2021.
Silver acts as a hedge against inflation,

much like gold does, though it is not as
valuable and is less actively traded. In
2016, the world price of silver is
anticipated to decrease, representing a
potential threat to the industry.
Consumer Confidence Index
The consumer confidence index (CCI)
measures consumers levels of optimism
about the current economic environment.
When the CCI falls, consumers are more
likely to purchase gold and silver as
investments, thus bolstering prices for
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the commodities. Conversely, when the

CCI rises, consumers are more likely to
purchase jewelry and items that use gold
as inputs. In 2016, the CCI is anticipated
to decrease.
Canadian-dollar effective
exchange rate index
The Canadian-dollar effective exchange
rate index (CERI) measures the
Canadian-dollars relative strength
against the currencies of its trading
partners. When the Canadian dollar
depreciates, Canadian products become
relatively more affordable for foreign

buyers. In 2016, the CERI is anticipated
to decline, representing a potential
opportunity for the industry.
Demand from computer and
electronic product manufacturing
Gold is a primary input for many
electronic component parts. Golds
durability and conductivity make is
useful for industrial purposes in
electronics industries. In 2016, demand
from computer and electronic product
manufacturing is anticipated to decline.
Canadian-dollar effective exchange rate
index
Consumer Confidence Index

110
130
100
120
Index
Index

continued
90
80
70
Year 07
110
100
09
11
13
15
17
19
21
90
Year 07
09
11
13
15
17
19
21
SOURCE: IBISWORLD
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Current
Performance
Revenue for primary metals such as silver

and gold are essentially a function of
commodity prices and production volumes.
As a result, revenue for the Gold and Silver
Ore Mining industry has been
characterized by falling prices of both gold
and silver over the past five years, rising
production of gold and falling production
of silver. Nevertheless, more than 95.0% of
industry revenue is derived from gold
production, and the industry has benefited
from historically strong gold prices during
the period due to golds popularity as a
hedge against inflation and volatility.
Not all that glitters is

gold
Since reaching historic highs in the volatile

postrecessionary period, the price of gold
has fallen at an annualized rate of 5.5%
since 2011. Industry operators have faced
pressure from decreasing gold prices,
which have constrained the profitability of
smaller operators. Moreover, many
operators mine both gold and silver, and
silver prices have also fallen in recent
years. IBISWorld estimates that the world
price of silver will fall by an annualized
rate of 16.9% since 2011. Though many
factors influence commodity price
fluctuations, worldwide economic
improvement has played an increasingly
large role in recent price fluctuations of
both gold and silver. As consumer
confidence increases, gold and silver
typically become less popular investment
options. Both gold and silver have a history
of rallying during times of economic stress,
as consumers flock to safety from equity
markets. Economic improvements in
recent years have spurred worldwide
equity markets, and as a result, demand
for gold and silver assets has softened.
When the price of gold declines, industry
operators, the bulk of which primarily focus
on gold mining operations due to its
relatively higher value compared with silver,
can suffer from relatively higher extraction
costs. This has caused many major players
However, in 2013, the world price of gold

plummeted 15.4%, slowing the industrys
growth trajectory from earlier in the period.
Overall, industry revenue is
anticipated to increase at an annualized
rate of 4.6% to total $7.6 billion in the
five years to 2016. The bulk of this growth
stems from increased gold production,
with volume rising at an annualized rate
of 8.8%. While gold will remain steady in
2016, IBISWorld anticipates that silver
prices will fall by 10.9% and drive
industry revenue down an estimated
0.5% over the year.
Decreasing
gold prices
have constrained the
profitability of smaller
operators
to operate at a loss in recent years, and
industry profit is expected to remain in the
red in 2016. As these profit remains
challenged, industry operators must bolster
their performance and profitability by
reducing extraction costs. However, safety is
such a large concern in the industry that
companies have very limited operations to
reduce their expenditures on extraction.
Technological advancements have enabled
operators to improve safety and reduce their
environmental footprint. However, the shift
toward more advanced machinery has
necessitated a more highly trained
workforce. Meanwhile, a decade-long
commodity boom has pushed up industry
wages, as competition for skilled miners was
fierce. Additionally, many mines are located
in harsh climates in Northern Canada,
furthering the need for industry operators to
provide high wages. Therefore, industry
wages are anticipated to increase at an
annualized rate of 11.4% in the five years to
2016, to total an estimated $884.5 million.
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Trade
Industry structure
Trade levels have declined in the past five

years as demand for precious metals has
fallen. Exports have decreased at an
annualized rate of 1.4% to reach $3.6
billion, and imports have fallen at an
annualized rate of 9.7% to reach $154.0
million. Imports for the industry are
negligible, however, with only 3.7% of
domestic demand sourced from abroad.
However, exports make up almost half of
industry revenue. Accordingly, another
factor influencing this industry is demand
from central banks for gold. While central
banks across the globe have increasingly
resorted to quantitative easing to spur
their economies from flagging demand,
central banks have been attempting to

bolster their gold reserves. Many
developed countries also maintain a
significant portion of their foreign reserves
in gold, and the scarcity of physical gold
on global markets ensures that prices are
relatively high as central banks continue
to demand the physical metal.
The number of industry operators has

increased at an annualized rate of 2.9% to
30 in the five years to 2016. Typically,
when companies enter the industry, they
have already been exploring for, and
developing, mining projects. The long lead
times required to ramp a mine up to
production delays market entry
significantly, especially for smaller
operators. Additionally, limited gold
resources ensure that competition is fierce
for economically viable mining projects. It
is common for mining companies to
regularly seek merger and acquisition
opportunities, as cost reductions can be
realized by combining proximate mining
projects. Additionally, companies seek to
expand their reportable reserves to ease
their access to capital. High barriers to
entry in the industry ensure that the

majority of mining operations have
significant access to capital, and
companies can ease their access to credit
by increasing their productive reserves.
Competition for acquisitions is also
very high in the industry. For example, in
January 2014, Goldcorp made an
unsolicited bid to acquire a smaller
competitor, Osisko Mining. When Osisko
rejected Goldcorps offer, the Barrick
Gold Company and Yamana Gold Inc.
agreed to acquire and split Osiskos gold
assets in Canada. This sort of acquisition
activity is relatively commonplace in
mining sectors due to the scarcity of
many minerals, but gold is a particularly
competitive commodity due to the high
value placed upon it.
Acquisition
activity is
relatively commonplace in
mining sectors due to the
scarcity of many minerals
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Industry
Outlook
The Gold and Silver Ore Mining industry

in Canada is projected to expand slowly
over the next five years. Industry growth
will mostly be driven by increasing
production volume of gold, as IBISWorld
anticipates the price of gold to slightly
decrease. Despite increases in the price of
silver, falling production volumes will
limit revenue growth for silver producers.
Nevertheless, demand condition will
remain healthy, with the relative scarcity
of gold ensuring that producers will find
ample market demand to meet
production. Operators profitability is
expected to return to positive territory,
enabling competitors to participate in
mergers and acquisitions. Furthermore,
demand conditions for gold and silver
will likely remain strong, IBISWorld
estimates that industry revenue will grow

at an annualized rate of 0.8% in the five
years to 2021 to total $7.9 billion.
Demand conditions
Industry production volumes are expected

to continue historical trends during the
coming five-year period, with gold
production to continue to increase.
Industry heavyweight Goldcorp opened a
new gold mine in James Bay, Quebec in
2015. The site, named Eleanore, has begun
commercial production and is designed to
ramp up to full capacity of 7,000 tonnes
per day in the first half of 2018.
Accordingly, gold production will rise in
Canada in coming years, despite weaker
gold prices. Reduced volatility in the global
economy is expected to drive down the gold
price at an annualized rate of 0.8% to reach
USD$1,134.1 per troy ounce in 2021.
However, with consumer confidence slated
to fall in the short term, any sharp drop in

world equity markets can spur a rally in
demand for precious metals. Meanwhile,
the price of silver is expected to rise at an
annualized rate of 1.5%. However, silver
production in Canada is expected to
continue its downward trajectory.
Trade levels are expected to increase in
the coming five years. Exports are
expected to increase at an annualized rate
of 0.6% to reach $3.7 billion. With a
rising Canadian dollar, downstream
buyers will be looking to lock in supply
contracts into the future. Imports for the
industry are likely to remain negligible
and are expected to fall at an annualized
rate of 1.6% to reach $142.0 million.
Consolidation activity
to continue
IBISWorld expects that industry

operators will continue to consolidate
their operations to help control rising
extraction costs. As resources decline, it
becomes more expensive to extract
minerals. Consequently, companies with
proximate mining projects are likely
participants in partnerships and potential

mergers. The number of industry
operators is anticipated to decline at an
annualized rate of 0.7% to total 29 in the
five years to 2021. As the number of
companies decreases, the industrys
market share concentration is projected
Revenue vs. exports

75
% change
50
25
0
-25
Year 08
Revenue
10
12
14
16
18
20
22
Exports
SOURCE: IBISWORLD
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Consolidation activity to increase, with the largest companies

to continue continued likely capturing additional market share
through acquisitions. Yamana Gold Inc.

and Agnico Eagle Mines Ltd.s joint
acquisition of Osisko will likely bolster
the two companies positions in the
industry, and Goldcorp will likely
continue to pursue other acquisitions to
combat this increasing competition.
In order to return to profitability,
major operators will look to streamline
production processes. While demand for
skilled labour will persist at high levels,
the end of the mining boom will ensure
that the upward pressure on wages will
subsist. As a result, IBISWorld anticipates
industry wages to decrease at an

annualized rate of 0.5% to $863.9 million
over the five years to 2021. Against this
trend, many small-scale operators have
focused on generating high-grade ore, in
order to make operations more efficient.
Many small-scale operations are
performing strongly despite the weaker
gold price, by digging deep and targeting
rich veins of gold. Activity in the Kirkland
lake region has been particularly notable,
with smaller companies such as Detour
Gold, Lake Shore Gold, Claude
Resources and Richmont Mines all
seeking to take advantage of their nimble
size in coming years.
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Life Cycle Stage
Production volume has grown

There are limited uses for industry products
% Growth in share of economy
There has been competitive merger

and acquisition activity
20
Maturity
Quality Growth
Company
consolidation;
level of economic
importance stable
High growth in economic

importance; weaker companies
close down; developed
technology and markets
15
Key Features of a Mature Industry

Revenue grows at same pace as economy
Company numbers stabilize; M&A stage
Established technology & processes
Total market acceptance of product & brand
Rationalization of low margin products & brands
10
Quantity Growth
Jewellery Manufacturing
Many new companies;

minor growth in economic
importance; substantial
technology change
Gold & Silver Ore Mining

0
Forklift & Conveyor Manufacturing

Iron Ore Mining
Mining, Oil & Gas
Machinery Manufacturing
Coal Mining
-5
-10
-10
-5
10
Decline
Shrinking economic
importance
15
20
% Growth in number of establishments

SOURCE: WWW.IBISWORLD.COM.AU
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Industry Life Cycle

This
industry
is M
ature

is in the mature stage of its life cycle.
Domestic production of both metals is
decreasing, though rising gold and silver
prices have boosted profit margins in
recent years. As a result, industry value
added (IVA), a measure of the industrys
contribution to the economy, is expected
to rise an annualized 5.0% over the 10
years to 2021. In comparison, Canadian
GDP is expected to rise 1.9% during the
period. However, IVA is extremely
volatile because high gold and silver
prices can inflate revenue and profit,
thereby masking the real factors that
make this a mature industry.
Gold and silver are well-accepted
commodities and have established uses.
Downstream markets for these products
are also defined and not expected to
change much. Furthermore, the industry
is determined by the available gold and
silver there is to mine. With revenue
growth in the past five years, production
of gold has increased as production of

silver has declined.
Gold mine production has experienced
a revival in recent years because the
lower costs associated with relatively new
production techniques, such as open-cut
mining and bacterial leaching, have
permitted previously uneconomic
deposits to be brought into production.
New technologies are currently being
sought to stabilize increasing costs while
meeting environmental standards, but a
major change in direction remains
elusive. Additionally, operators in the
Gold and Silver Ore Mining industry have
increasingly sought acquisition
opportunities. For example, Goldcorps
hostile bid for Osisko Mining, which
ultimately failed, shows how the largest
operators compete for reserves. Osisko
Mining Corporation agreed to a friendly
joint acquisition by Yamana Gold Inc.
and Agnico Eagle Mines Limited after
Goldcorps failed bid.
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Products & Markets
Supply Chain | Products & Services | Demand Determinants

Major Markets | International Trade | Business Locations
Supply Chain
KEY BUYING INDUSTRIES

33991CA
Jewellery Manufacturing in Canada

Jewellery manufacturers use gold as a primary input into production
52315CA
Commodity Dealing and Brokerage in Canada

Commodity dealers and brokers purchase gold products to sell to investors
52599CA
Private Equity, Hedge Funds & Investment Vehicles in Canada

Some investment vehicles and hedge funds invest in gold and gold derivative products
9901CA
Consumers in Canada
Consumers can purchase gold and gold derivative products as investments
KEY SELLING INDUSTRIES
Products & Services
33313CA
Mining, Oil & Gas Machinery Manufacturing in Canada

This industry supplies machinery necessary to develop and operate mine projects
33392CA
Forklift & Conveyor Manufacturing in Canada

This industry supplies machinery that helps operators transport products on site
52311CA
Investment Banking & Securities Dealing in Canada

This industry provides financing to industry operators large scale projects
54136CA
Geophysical Services in Canada

This industry provides geological analyses to industry operators to help develop and locate
feasible mine projects
Products and services segmentation (2016)
3.2%
Silver ore, powder, concentrates

and unwrought forms
Total $7.6bn
Gold
Industry operators are heavily dependent
on the world price of gold. As a share of
overall revenue, gold dominates the
industry, accounting for more than
95.0% of total revenue. Over the past
decade, gold has increasingly captured a
larger share of revenue for the industry,
96.8%
Gold ore, powder, concentrates

and unwrought forms
SOURCE: IBISWORLD
as gold production volumes increased.

Golds relative attractiveness over silver
products ensures that demand for the
precious yellow metal outpaces that of
silver. Gold production is typically sold to
mints and dealers, who refine it into
bullion products for sale on global
financial markets. Industry operators do
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Products & Markets
Products & Services

continued
Demand
Determinants
have the capacity to refine their gold

production, but typically they do not sell
their product to consumers directly.
Silver
Industry operators typically mine both
silver and gold, but silver accounts for a
far smaller share of industry revenue. In
2016, IBISWorld estimates that silver will
account for only 3.2% of industry
revenue. Silver has been losing ground in
the industry as demand for gold surged
during recent times of economic
instability. Though also popular as an
alternative investment, silver products
typically trade at far lower prices than
gold. Additionally, silver is more

abundant than gold. Since hitting its peak
in 2012, the price of silver has decreased
markedly, further reducing silvers
market share. In the five years to 2016,
the world price of silver is anticipated to
fall at an annualized rate of 16.9%.
Changes in relative prices also impact on
market segments. Over the next five years,
the world price of gold is anticipated to
decrease at an annualized rate of 0.8%, to
US$1,134.1 per troy ounce. During the same
period, the price of silver is anticipated to
increase. Yet with gold production to
outpace silver production, industry market
shares are likely to remain stable.
Several downstream markets, including

consumers, jewellery manufacturers and
industrial product manufacturers, drive
demand for gold. Golds malleability,
conductivity and resistance to corrosion
makes it highly desirable for several
industries, most notably electronics
manufacturing and dentistry. Jewellery
manufacturers use gold as a primary input
for production, and this market accounts
for the largest portion of physical gold
demand. Investors seek to speculate about
future price fluctuations in the prices of
both gold and silver, but the majority of
gold that investors trade on financial
markets does not actually involve physical
gold. The value of the gold futures market
far exceeds annual production of mines,
but in recent years, the physical gold
market has been increasing in popularity
with investors, most notably those from
China, India and Russia.
Silver has similar characteristics to
gold, but it typically trades at far lower
prices than gold. The majority of silver is
destined for electronic products, coins,
photography, jewellery and silverware.
However, investors also demand silver as
a safe haven investment in times of
economic duress. In recent years, the
world price of silver has fallen as

economic conditions have improved in
Canada and abroad, though IBISWorld
expects this trend to reverse moving
forward. Commodity markets have been
experiencing a tremendous rise in value
over the past decade, and gold and silver
experienced significant gains during the
recession as investors flocked to the
precious metals. In the next five years,
IBISWorld expects demand for physical
gold and silver to remain strong, as their
relative scarcity in comparison to other
commodities ensures that demand is
typically steady.
Due to golds and silvers popularity
with investors, consumer confidence and
disposable income levels can influence
demand for the metals. When consumers
have a positive outlook on the economy,
they are less likely to invest in the metals,
as equity markets and other investments
can typically generate larger returns on
investment during times of economic
prosperity. Nonetheless, consumers that
invest in gold and silver products,
including bars, coins and other various
items, typically do so to hedge themselves
against increasing inflation.
Furthermore, as quantitative easing has
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Products & Markets
Demand
Determinants
continued
Major Markets
become a more widely practiced form of

monetary policy in developed nations,
central banks have been increasingly
demanding physical gold products.

IBISWorld anticipates this demand trend
to continue in the next five years.
Major market segmentation (2016)
7.5%
Electronic product
manufacturers
1.0%
Dentistry
28.7%
Investment markets
Total $7.6bn
Much of the industrys gold and silver ore is
typically sold to refineries in the Copper,
Zinc and Lead Refining industry
(IBISWorld report 33141), which then sell
refined bullion, concentrates and ore to
downstream demand markets. This tends
to occur as gold is frequently mined as a
by-product of copper operations. Jewelry
manufacturers, which represent 60.3% of
domestic demand, largely dominate gold
and silver use in the United States;
investment demand represents a share of
28.7%; industrial uses represent 11.0%; and
the remaining demand comes from
multiple markets (e.g. photography and
dentistry). Because of golds dominant
share of total industry revenue, its market
segmentation closely resembles that of the
industry as a whole. Silver, however, has its
own unique market segments.
Jewelry manufacturers and
investment markets
Refinement of gold and silver for jewelry has
dropped slightly in the past five years
because of diminished interest in jewelry as
2.5%
Other industrial markets
60.3%
Jewelry manufacturing
SOURCE: IBISWORLD
a decorative item; however, investment

interest in gold and silver through jewelry
sales has offset the drop in its revenue share.
Dentistrys share of revenue has remained
stable despite gold facing growing
competition from plastics and ceramics,
which are replacing gold used in dentistry in
developed countries. Gold and silver sales
for coin production and investment bullion
grew greatly in recent years in conjunction
with investment interest in both metals.
Nevertheless, the volume of these metals
traded on investment markets far exceeds
the physical volume sold and annual
production of mines.
Industrial uses and other
Because of its excellent electrical and
thermal conducting properties, demand
for silver has a more industrial focus than
gold, being used in conductive adhesives,
fuses and switches. These and other
industrial uses represent about 60.0% of
its demand share. Photography is also a
major user of silver, accounting for about
16.0% of use, though that share is
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Products & Markets
expected to decline with the proliferation

of digital cameras. Coin and medal
fabrication and jewelry manufacturing
represent the remainder, at 16.0% and
International Trade
International trade in the gold and silver

ore mining industry is at a medium level,
with industry exports making up a
sizeable portion of industry revenue, but
with a low quantity of industry imports.
Gold and silver products can be traded at
various stages within the production
supply chain, such as at the point of
extraction, following smelting and
refinement, or at the semifabricated or
fabricated stages. It is important to note
that IBISWorld trade data refers to
mineral products at the first production
stage, meaning the stage of mineral
extraction, referring to raw output that is
traded prior to processing and
refinement. Accordingly, trade data does
not include the gold and silver products
Level & Trend

xports in the
E
industry are H
igh
and S
teady
Imports
in the
industry are L ow
and D
ecreasing
8.0%, respectively. Silver coin and medal

fabrication have risen strongly in recent
years because of growing interest in silver
as an investment.
Industry trade balance

4
3
2.9%
1
0
-1
Year 08
Exports
10
12
Imports
14
16
18
20
22
Balance
SOURCE: IBISWORLD
that miners produce that is sold on

secondary markets, such as materials
Exports To...
Hong Kong
$ billion
Major Markets
continued
Imports From...
2.0%
All others
2.2%
Switzerland
8.7%
Egypt
26.9%
United States
11.7%
36.7%
Argentina
All others
14.2%
66.0%
Dominican Republic
United Kingdom
28.7%
Peru
Year: 2016
Total $3.6bn
SIZE OF CHARTS DOES NOT REPRESENT ACTUAL DATA
Total $154.0m
SOURCE: USITC
WWW.IBISWORLD.CA
Products & Markets
International Trade
continued
that have been processed to be sold as

bullion. Metallic refinement, processing
and value-added services are not
considered to be industry specific.
Exports
In the five years to 2016, exports are
anticipated to fall at an annualized rate
of 1.4% to total an estimated $3.6
billion. The majority of exports are
bound for the United Kingdom, followed
by the United States. Several industry
operators maintain facilities in the
United States, so many companies send
their product to their US facilities for
further processing and refinement.
Other countries that receive significant
amounts of Canadian gold products

include Hong Kong and Switzerland.
Imports
Imports are anticipated to supply only
3.7% of domestic demand in 2016. In the
five years to 2016, imports are
anticipated to fall at an annualized rate of
9.7% to total an estimated $154.0 million.
According to Industry Canada, the bulk
of gold imports in 2016 are expected to
be sourced in Peru (28.7% of imports),
followed by the Dominican Republic
(14.2%), Argentina (11.7%) and Egypt
(8.7%). IBISWorld anticipates imports
will decline at an annualized rate of 1.6%
over the next five years.
WWW.IBISWORLD.CA
Products & Markets

Business Locations 2016
Establishments (%)
Less than 5%
5% to less than 20%
20% to less than 40%
40% or more
NT
YT
NU
NORTHERN TERRITORIES
3.1
BC
3.1
AB
0.0
SK
6.3
MB
3.1
ON
37.5
NL
QC
3.1
43.8
NB
0.0
NS
PE
0.0
0.0
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
Products & Markets
50
40
30
20
10
Saskatchewan
Quebec
Ontario
Prince Edward Island
Nova Scotia
Newfoundland
Northern Territories
Establishments
Population
New Brunswick
Manitoba
0
Alberta
Ontario and Quebec

Gold and silver mining operations are
most heavily concentrated in Ontario and
Quebec. IBISWorld estimates that
Quebec will contain 43.8% of industry
establishments, and Ontario is expected
to contain 37.5% of industry operators.
These regions also contain several
development projects that could
eventually become productive
contributors to the Gold and Silver
industry. Nonetheless, the number of
establishments is relatively steady as
viable gold deposits are very limited.
Distribution of establishments vs. population
British Columbia
The distribution of industry

establishments is dictated by the location
of gold deposits. Companies also
occasionally operate mines in partnerships
to help manage costs and provide
economic benefits. Merger and acquisition
activity is partly driven by locational
factors, as combining mine projects can
provide economies of scale and help
control costs. Furthermore, there are many
development projects throughout Canada,
and it is uncertain what percentage of
these projects will be economical.
Business Locations
SOURCE: IBISWORLD
Other regions
Saskatchewan is the third most
concentrated region in the industry, with
an estimated 6.3% of industry operators
located in the region. British Columbia,
Manitoba and Nunavut all have one
productive mine each, according to
Natural Resources Canada.
WWW.IBISWORLD.CA
19
Competitive Landscape
Market Share Concentration | Key Success Factors | Cost Structure Benchmarks

Basis of Competition | Barriers to Entry | Industry Globalization
Market Share
Concentration
Level
Concentration in this
industry is M
edium
Key Success Factors

IBISWorld
identifies
250 Key Success
Factors for a
business. The most
important for this
industry are:
Cost Structure
Benchmarks
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 less
than one half of industry revenue. This
level has been steady over the past five
years. IBISWorld expects concentration
to increase as merger and acquisition
activity continues. IBISWorld estimates
that the number of industry operators
will decrease slightly 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.
Ability to accommodate
environmental requirements
Companies must be able to meet
environmental laws and regulations to
successfully develop and operate mines.
scheduling output, while high-grade

reserves usually result in lower unitoperating costs.
Access to highly skilled workforce

Companies require highly skilled workers
to manage and operate mining projects
Ability to forward sell production

when appropriate
The ability to forward-sell production
when gold or silver prices are high
effectively locks in those prices.
Availability of resource
Access to large, high-grade reserves is
important. A larger deposit generally
permits economies of scale and also
provides greater flexibility in
Ability to expand and curtail operations

rapidly in line with market demand
Successful producers have a capacity to
read future trends in demand and alter
production accordingly.
Profit
Industry profit margins, measured as
earnings before income and taxes, can
be extremely volatile. Companies must
commit to large capital expenditures
and projects, whose profitability
depends on the price of gold and silver,
which are greatly affected by world
demand and supply conditions and
fickle financial markets. Furthermore,
profitability can vary greatly based on a
specific mining project. When demand is
high, industry profit margins can
become large because there are few
companies with the ability to mine gold
and silver to meet demand. Additionally,
the high value investors and consumers
place on gold bolsters profitability.
Though industry revenue has

expanded aggressively in the past five
years, profitability has been volatile. High
demand led to double-digit profit
margins for many operators as the gold
price rose early in the period. On the
other hand, as the world price of gold has
fallen from its 2012 peak, many industry
operators have posted annual losses. In
2013, the world price of gold fell 15.4%,
which caused both Barrick Gold
Corporation and Goldcorp to operate at a
loss since that year. As a result,
IBISWorld calculates that in 2016, the
average industry profit margin will be a
loss of 1.0% of revenue. IBISWorld
anticipates the industry to return to profit
in coming years as companies have
WWW.IBISWORLD.CA
20
continued to focus on minimizing

extraction costs in recent times.
Purchases
Material purchases for gold and silver
producers include fuel, explosives and
chemicals for metal extraction. Fuel
represents a considerable portion of input
costs; therefore, oil prices can severely
affect industry profit. Because oil is subject
to sudden price changes, material costs can
be volatile, sometimes making production
at certain operations less profitable. The
price of oil has collapsed since 2014,
leading to a reduction in purchase costs. As
a result, the share occupied by purchase
costs has declined in the past five years
because revenue growth has largely
outstripped the per unit cost of materials.
Wages
Labour costs also absorb a significant
portion of revenue, accounting for an
expected 11.6% in 2016. Over the past five

years average wages have grown
significantly, as a worldwide commodities
boom caused a shortage of skilled miners,
with many new mining projects
undertaken across the world. Similarly,
industry employment has been on the
rise during the period as companies
began new operations and attempted to
increase production to benefit from
quickly rising gold and silver prices early
in the period.
Despite easing in recent times, this has
led to an overall marked increase in
wages as a share of industry revenue over
the past five years. This increase is
amplified by the reduced level of industry
employment in 2011, at which time some
major projects were scaled back or
neared completion. At that time, industry
wages as a proportion of revenue fell
below historical norms, recorded at 8.5%
in 2011. Since then industry wages and
Sector vs. Industry Costs

Average Costs of
all Industries in
sector (2016)
100
20
-1.0
11.6
10.8
27.4
27.5
60
40
Industry Costs
(2016)
9.7
80
Percentage of revenue
Cost Structure
Benchmarks
continued
15.7
1.2
3.6
31.5
n Profit
n Wages
n Purchases
n Depreciation
n Marketing
n Rent & Utilities
n Other
20.2
0.4
6.1
35.3
0
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
21
Cost Structure
Benchmarks
continued
employment figures have rebounded

strongly, amid increasing competition for
skilled workers.
Depreciation and other costs
Depreciation is a major noncash cost for
the industry, representing an estimated
20.2% of total revenue. This displays the
large amount of capital investment
required to develop gold and silver mines.
Mining companies invest heavily in major
large-scale machinery for activities such as
digging, drilling, blasting, loading,
crushing and conveying. New machines
(e.g. electric shovels, dump trucks and
conveyors) and equipment are purchased
on an ongoing basis. In addition, the
Basis of Competition
Level & Trend
ompetition
C
in this
industry is H
ighand
the trend is S
teady
Gold and silver are traded on the basis of

price, which in turn is set by the
interaction between supply and demand.
Individual producers are unable to
influence either gold or silver prices and
both commodities are also traded on
futures exchanges. The undifferentiated
nature of the two commodities makes for
a high level of competition, which has
remained steady despite consolidation of
large and small firms.
Internal competition
Individual producers primarily compete on
the basis of cost because they are unable to
influence gold or silver prices. The lowestcost mining operations are better able to
survive periods of low gold and silver prices
or increases in input costs. Low-cost
operations also find it easier to secure
financing, attract highly skilled workers
and pursue technological development.
Competition among major players is
also centred on the acquisition of
attractive mineral properties. Acquiring
or holding rights to properties with high
gold or silver deposits determines the
level of company production, which
highly influences financial results.
sequence of drilling, blasting, loading,

hauling, crushing and conveying is, at
some large mines, carried out 24 hours
per day throughout the entire year. This
continuous use of machinery requires
companies to regularly replace equipment,
maintaining steady depreciation charges.
This expense item has been driven up in in
2015 and 2016 as Goldcorp incurs large
depreciation expenses for the newly
opened Eleonore mine.
Other expenses for the industry
include costs for depletion, maintenance
and shipping, utilities, contractors,
administrative activities, marketing, and
royalties paid to mineral rights owners
and state governments.
International gold and silver mining

activities are a major source of
competition for US producers. While
many US producers also operate abroad,
companies with greater operations
outside the United States can sometimes
gain an advantage through lower labour,
material and energy costs. Furthermore,
government-owned mining operations in
many African countries are backed by
government funds, and are therefore
better able to attain financing and survive
periods of high input costs.
External competition
Gold and silver both face competition in
end-use markets from other materials. In
its major market, jewelry, gold and silver
compete with other precious metals,
including platinum, and, to a lesser extent,
with metals such as stainless steel. This
competition is, however, limited and
declining as demand for gold jewelry has
dropped while demand for gold as an
investment item has greatly increased.
Gold faces competition in the small
dentistry market from substitute
products, such as stainless steel and
various types of plastics and ceramics.
WWW.IBISWORLD.CA
22
Basis of Competition
continued
While competition from these products is

rising in developed countries, primarily
for aesthetic reasons, the growth of
improved dentistry in less-developed
countries still relies heavily on gold.
As a precious metal investment option,
gold and silver primarily face competition
from platinum. These metals also face
Barriers to Entry
There are substantial barriers to entry

into the Gold and Silver Ore Mining
industry, including the capital
expenditure necessary to undertake
exploration programs and fund mine
development. Furthermore, obtaining the
rights to operate at a mine owned by a
competitor can also be difficult and
require large royalties. The high
concentration of the four largest players,
which control most of the high
production mines in Canada, complicates
conditions for new entrants, especially if
they are small. Competition for mine
properties is nonexistent as the major
players own and control most highergrade mines. New players are left to
compete by operating at lower-grade
mines, which typically have higher
operating costs. Because the high level of
competition is focused on cost reduction,
new players are essentially fighting a
losing battle.
Another barrier to entry includes the
difficulty in acquiring permits and
leases. Legislative procedures, such as
supplying comprehensive environmental
impact statements, require significant
research and legal costs. Any changes in
regulations or laws can halt or cancel
operations, and any environmental
contamination at mining properties
could result in significant fines. These
issues can harm production, revenue
Level & Trend

arriers to Entry
B
in this industry are

Highand S
teady
competition from the general investment

market because many investors focus on
precious metals, especially in difficult and
uncertain economic times. Through the
recession, gold and silver prices
performed strongly as investors flocked
to the metals as a safe haven from
economic stress in equity markets.
Barriers to Entry checklist

Competition
Concentration
Life Cycle Stage
Capital Intensity
Technology Change
Regulation & Policy
Industry Assistance
High
Medium
Mature
High
Medium
Heavy
Medium
SOURCE: IBISWORLD
and profit. Operating many mines at

once can mitigate the risk of policy
changes, but new entrants usually do not
have the high amount of capital
necessary to enter the industry
operating multiple mines at once.
The factors forcing this industry into a
mature life cycle stage also create
barriers to entry. Weakly growing
production in the face of rising demand
is a prime example of its maturity.
Production drops have been due to
depleting mineral reserves, as gold and
silver ore are finite resources. New
technologies to increase low production
have been absent for almost two decades,
forcing many mines to close. As
resources are diminishing, producers are
going abroad to find untapped reserves;
thus, obtaining scarce resources (i.e.
mine reserves) makes entry into the
industry extremely difficult.
WWW.IBISWORLD.CA
23
in this
industry is H
ighand
the trend is S
teady
International trade is a
major determinant of
an industrys level of
globalisation.
Exports offer growth
opportunities for firms.
However there are legal,
economic and political risks
associated with dealing in
foreign countries.
Import competition can
bring a greater risk for
companies as foreign
producers satisfy domestic
demand that local firms
would otherwise supply.
Trade Globalisation
200
Going Global: Gold & Silver Ore Mining 20052016

Global
Export
150
100
50
0 Local
0
globalization will continue at high levels

in the next five years.
Canada is home to many of the
largest mining companies in the world.
The countrys favourable tax regime for
mining companies attracts
international mining companies.
Furthermore, demand for gold and
silver is typically steady. Though prices
can fluctuate greatly over short periods
of time, the market for physical gold is
driven by many factors that vary from
country to country. Additionally,
central banks buy gold products to
store foreign exchange reserves.

Import
40
80
120
Imports/Domestic Demand
160
200 Export
Exports/Revenue
Level & Trend

lobalization
G
Globalization in the Gold and Silver Ore

Mining industry is high. Though trade of
physical gold is relatively low in
comparison to the value of gold and silver
futures markets, many companies
operate mines on several continents. For
example, Barrick Gold Corporation
operates mines in seven countries outside
Canada, including Argentina, Australia
and the United States. The next three
largest industry players also have
extensive overseas mining operations. In
the five years to 2016, the level of
industry globalization has been steady,
and IBISWorld anticipates that
Exports/Revenue
Industry
Globalization
Global
150
100
50
2016
2005
0 Local
0
Import
40
80
120
160
Imports/Domestic Demand
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
Major Companies
Goldcorp Inc. | Agnico Eagle Mines Ltd. | Other Companies
Major players
(Market share)
Agnico Eagle Mines Ltd. 19.2%
61.4%
Other
Goldcorp Inc. 19.4%
Player Performance
Goldcorp Inc.
Market share: 19.4%
SOURCE: IBISWORLD
Goldcorp is a globalized gold mining

company with operations in Canada, the
United States, Mexico and Central and
South America. The company derives
revenue from gold, silver, copper, lead and
zinc mining operations, and it is
headquartered in Vancouver. The company
employs more than 16,000 people globally.
In 2015, the company generated almost
$5.6 billion in global revenue and produced
about 3.5 million ounces of gold and 40.4
million ounces of silver.
Goldcorp operates four gold mines in
Canada: Red Lake, Porcupine,
Musselwhite and Eleonore mining
projects. The Eleonore site is a major new
mine in James Bay, Quebec. It poured
first gold on October 1, 2014, and
commercial production began in 2015.
The rampup to full design capacity of
7,000 tonnes per day is expected in the
first half of 2018. The company also has a
development project, Cochenour, located
in Ontario. As these projects are

developed, Goldcorp could strengthen its
position in the industry due to the
scarcity of feasible gold mining projects.
In January 2014, the company
attempted to acquire Osisko Mining
Corporation, a mid-tier gold producer in
Quebec, though it was unsuccessful in its
efforts. In March 2015, Goldcorp
completed the acquisition of Probe Mines
for total consideration of $434.0 million.
Probes principal asset is the Borden gold
project in Ontario, 160 kilometres west of
the Porcupine mine.
Financial performance
Over the five years to 2016, Goldcorps
industry-relevant revenue is anticipated
to fall at an annualized rate of 3.5%, to
total $1.5 billion. The company struggled
through 2013 as the world price of gold
dropped by an estimated 15.4%, leading
to a double-digit decline in its relevant
Goldcorp (industry-relevant segments) - financial performance*

Year
Revenue
($ million)
(% change)
Operating profit
($ million)
(% change)
2011
1,766.1
N/C
737.1
N/C
2012
1,693.4
-4.1
735.9
-0.2
2013
1,487.0
-12.2
-940.3
N/C
2014
1,393.3
-6.3
-1,024.7
9.0
2015
1,520.4
9.1
-1,690.0
64.9
2016
1,481.5
-2.6
125.6
N/C
*Estimates
SOURCE: ANNUAL REPORT AND IBISWORLD
WWW.IBISWORLD.CA
Major Companies
Player Performance
continued
revenue segments. The companys

profitability has also suffered as gold
prices have declined, and the company
operated at a loss since 2013. The
company has since been active in
managing its cost base. Moving forward,
the company is expected to continue
emphasizing cost reductions to protect

against relatively weak gold prices
compared with the previous five-year
period. The company is still looking to
expand production as it continues to
develop projects and maintain its
extraction costs.
Player Performance
Agnico Eagle Mines Ltd. (Agnico) is a

gold mining company that has produced
precious metals since 1957. The
Companys mines are located in Canada,
Mexico and Finland, with exploration
and development activities in each of
these regions as well as in the United
States and Sweden. The company
employs 7,588 people globally and is
headquartered in Toronto. Agnico has
four gold mining projects in Canada:
Meadowbank (Nunavut), LaRonde
(Quebec), Lapa (Quebec) and Goldex
(Quebec). Of these mines, Meadowbank
is the companys largest.
Agnico acquired the Osisko Mining
Corporation in a joint acquisition with
Yamana Gold Inc. in 2014 after Goldcorp
failed in its acquisition attempt of the
company. Agnicos acquisition is
anticipated to help bolster the companys
position in the industry over the next five
years. Yamana Gold and Agnico established

a partnership after the $3.9 billion joint
acquisition to operate and develop Osiskos
Canadian assets. Furthermore, the
company has been developing its Meliadine
gold mining project in Nunavut, and this
project site is estimated to have 2.8 million
ounces of proven and probable gold
reserves. In 2015, the company produced
1.7 million ounces of gold and 4.3 million
ounces of silver.
The company has maintained its
overall industry market share over the
past five years, and the companys most
recent acquisition will likely help it
capture additional market share over the
next five years. However, gold prices will
continue to heavily impact the companys
overall performance. As a result, the
company will continue to maintain its
costs and emphasize the development of
its Meliadine gold project to help hedge
Agnico Eagle Mines

Ltd.
Market share: 19.2%
Agnico Eagle Mines Limited (industry-relevant segments) - financial

performance*
Year
Revenue
($ million)
(% change)
Operating profit
($ million)
(% change)
2011
1,147.2
N/C
-490.3
N/C
2012
1,142.2
-0.4
259.2
N/C
2013
1,091.0
-4.5
-544.9
N/C
2014
1,418.7
30.0
141.4
N/C
2015
1,377.7
-2.9
57.3
-59.5
2016
1,467.0
6.5
62.8
9.6
*Estimates
SOURCE: ANNUAL REPORT AND IBISWORLD
WWW.IBISWORLD.CA
Major Companies
Player Performance
continued
Other Companies
against any detrimental price movements

in gold. Due to the relative scarcity of
economic mining projects, the company
is well-poised to maintain its market
position over the next five years.
Financial performance
In the five years to 2016, Agnicos industryrelevant revenue is projected to increase at
an annualized rate of 5.0% to total $1.5
billion. However, declining gold prices have
negatively impacted the companys

profitability in Canada, and IBISWorld
anticipates the companys operating
income to decline in the five years to 2016.
The company achieved record annual
payable gold production during 2015, an
increase of 16.9% compared with 2014
payable gold production. IBISWorld
anticipates the companys industryrelevant revenue to grow on the basis of
increased production volume.
Barrick Gold Corporation
Vale
Estimated market share: 4.6%

Barrick Gold Corporation (Barrick) is
headquartered in Toronto and employs
more than 21,000 people worldwide.
The company mines gold, silver and
copper, and it maintains two industryrelevant mines in Canada, David Bell
and Williams, which operate under the
joint name of Hemlo. Both mines are
located in Ontario, and they share
milling and processing facilities, which
helps the company manage its
transportation costs. In 2015, both
mines together produced 230.7
thousand ounces of gold, and the
mines hold proven and probable
mineral reserves of about 1.0 million
ounces of gold.
Currently, the company does not have
any major gold mining projects in
development in Canada. This has led to a
decline in the companys market share in
the Canadian gold mining industry, as its
competitors have more aggressively
sought development projects in the
country. Barricks industry-relevant
revenue has grown at a marginal
annualized rate of 2.5% to $350.3 million
in the five years to 2016. Revenue
suffered in 2013 and 2014 as gold prices
plummeted, and the companys emphasis
on overseas operations has led to a
decrease in the companys market share
in the past five years.
Estimated market share: 1.8%

Vale was founded in 1942 and is
headquartered in Rio de Janeiro, Brazil.
The company employs about 75,000
people globally. The company operates in
the industry through its base metals
segment, which includes nickel and copper.
Gold and silver are by-products of the
companys nickel and copper operations in
Canada. The companys nickel operations
are primarily concentrated in Canada
through its Vale Canada Limited subsidiary
at its Sudbury mine location. In 2016,
IBISWorld estimates that the company will
generate industry-relevant revenue of
$134.3 million.
Yamana Gold
Estimated market share: N/A

Yamana Gold Inc. is headquartered in
Toronto and employs nearly 10,000
people. The company maintains mining
operations in Brazil, Argentina, Chile,
Mexico, Columbia and, as of 2015, Canada.
The company agreed to a joint acquisition
of Osisko Mining, alongside Agnico Eagle
Mines Ltd. (Agnico). However, the
company has yet to realize revenue from its
acquired gold assets in Canada.
Nevertheless, IBISWorld anticipates that
the company will continue to grow its
market presence in Canada over the next
five years as Agnico and Yamana jointly
operate and explore for gold assets.
WWW.IBISWORLD.CA
Operating Conditions
Capital Intensity | Technology & Systems | Revenue Volatility

Regulation & Policy | Industry Assistance
Capital Intensity
Level
The level
of capital
intensity is H
igh

is highly capital intensive, as mining
companies must invest heavily in capital
equipment to increase production, while
labour requirements are relatively
minimal. For every $1.00 allocated
toward labour, an estimated $1.74 will be
absorbed by capital costs. Wage costs are
typically lower than depreciation charges,
highlighting the importance of capital
investment in the production process.
The industrys substantial capital
expenditure arises from the nature of the
mining process, which requires
considerable investment in large-scale
earth moving and processing equipment
such as electric shovels and conveyors.
Additionally, the industry requires steady
working capital because companies require
Capital intensity
Capital units per labour unit

2.0
1.5
1.0
0.5
0.0
Economy
Mining In
Canada
Gold & Silver

Ore Mining
Dotted line shows a high level of capital intensity

SOURCE: IBISWORLD
sufficient investment to survive during

periods of low prices, when revenue may
temporarily be insufficient to cover costs.
Tools of the Trade: Growth Strategies for Success

Investment Economy
Recreation, Personal Services,

Health and Education. Firms
benefit from personal wealth so
stable macroeconomic conditions
are imperative. Brand awareness
and niche labour skills are key to
product differentiation.
Information, Communications,
Mining, Finance and Real
Estate. To increase revenue
firms need superior debt
management, a stable
macroeconomic environment
and a sound investment plan.
Traditional Service Economy

Wholesale and Retail. Reliant
on labour rather than capital
to sell goods. Functions cannot
be outsourced therefore firms
must use new technology
or improve staff training to
increase revenue growth.
Jewellery Manufacturing
Forklift & Conveyor Manufacturing
Coal Mining
Mining, Oil & Gas
Machinery Manufacturing
Iron Ore
Mining
Change in Share of the Economy
Gold & Silver

Ore Mining
Capital Intensive
Labour Intensive
New Age Economy
Old Economy
Agriculture and Manufacturing.

Traded goods can be produced
using cheap labour abroad.
To expand firms must merge
or acquire others to exploit
economies of scale, or specialize
in niche, high-value products.
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
Technology & Systems The technology and systems employed by

of
Technology Change
is M
edium
Revenue Volatility
Level
The level
of
Volatility is M
edium
deposits combined with the use of

chemicals for gold extraction. The
techniques marked a sharp change from
the traditional method of underground
(lode) mining, and helped boost output
significantly. Both methods involve an
initial process of ore removal, followed by
chemical gold extraction.
Silver is mined with gold and other
base metals including lead and zinc, with
only a handful of mines primarily
producing silver. Unlike gold, most silver
is produced at lode (underground) mines,
rather than from placer operations.
Most major companies within the
industry are constantly seeking to invest
and develop innovative technologies in
order to increase output and decrease
costs. Proprietary technologies are
especially sought after, as they can give
tremendous competitive advantage to
firms with access to them.

is typically very volatile, reflecting
fluctuations in the prices for gold and
silver. However, volatility over the past
five years has been moderate. Metal prices
are determined on global markets and
reflect the dynamic nature of the supply
and demand balance, rising sharply in

response to supply shortfalls and falling
just as quickly if oversupply emerges.
These prices change in response to
demand for the metals, and demand is
largely determined by investor confidence.
With lower investor confidence and
A higher level of revenue

volatility implies greater
industry risk. Volatility can
negatively affect long-term
strategic decisions, such as
the time frame for capital
investment.
When a firm makes poor
investment decisions it
may face underutilized
capacity if demand
suddenly falls, or capacity
constraints if it rises
quickly.
Volatility vs Growth
1000
Revenue volatility* (%)
Level
The level
the industry have changed at a moderate

rate in recent years, after considerable
change in methods of gold production
during the 1980s and 1990s allowed for
greater output from previously lowproducing mines. Technology change
today is primarily concerned with
complying with environmental
regulations and reducing input costs.
Beyond mining equipment and methods,
technological change within the industry
has also concentrated on improved
information systems. With better
systems, companies can improve
production planning, equipment
monitoring and reserves estimations.
This, in turn, reduces long-term costs by
operating more efficiently.
Increasing production over the past
several decades was based on the opencut (placer) mining of large, low-grade
Hazardous
Rollercoaster
100
10
1
0.1
Stagnant
30
10
Blue Chip
10
30
50
70
Five-year annualized revenue growth (%)

* Axis is in logarithmic scale
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
Revenue Volatility
continued
greater economic uncertainty, many

people turn to gold as an investment
option and a store of value. Poor economic
performance has drawn investors toward
gold, driving up demand, price, and,
ultimately, industry revenue.
Annual swings in output contribute to
revenue volatility, as even the slightest
fluctuations can drive trading markets to
extensively raise purchases or sell their
holdings, thereby allowing prices to
swing wildly. However, revenue has been

relatively steady in the past five years, as
demand for gold and silver products has
been strong worldwide. The industrys
exposure to price fluctuations in gold
and silver leaves it highly exposed to
financial markets, so while revenue
volatility has been moderately low in the
past five years, IBISWorld anticipates
that high volatility could return in the
next five years.
Regulation & Policy
In Canada, mineral rights are

government-owned and cannot be
purchased, but only leased by individuals
or companies. Consequently, government
currently own the mineral rights on over
90.0% of Canadas land. Per the
Constitution, regulating mining activities
on publicly owned mineral leases falls
under provincial or territorial
government jurisdiction. Thus, there is
separate mining rights legislation for
each jurisdiction except Nunavut.
Nunavut mining and exploration
activities continue to be regulated by the
Department of Indian Affairs and
Northern Developments office based in
the Northwest Territories.
According to the Yukon Act, for
example, the government of Yukon has
direct control over public lands and
mineral resources. In the Northwest
Territories and Nunavut, the Government
of Canada, through Aboriginal Affairs
and Northern Development Canada
(AANDC), is responsible for the
administration of crown lands, including
mineral properties. Thus, AANDC issues
and administers mining titles pursuant to
the Northwest Territories and Nunavut
mining regulations under the Territorial
Lands Act.
In the Northwest Territories, British
Columbia, Manitoba, Ontario, Quebec,
New Brunswick and Nova Scotia,
individuals and companies must obtain a
prospectors licence before engaging in

exploration for minerals. In Yukon,
Alberta, Saskatchewan, Prince Edward
Island, Newfoundland and Labrador, an
operator can conduct prospecting or
exploration activities without a licence,
but must have a licence to actually
acquire mineral rights or stake claims to
protect that operators discoveries. In
some jurisdictions, a special permit is
required to obtain the right to conduct an
airborne geophysical survey over an area
not covered by a mineral claim.
Additionally, mining projects are
subject to the Canadian Environmental
Assessment Act. This federal law
requires federal decision makers to
consider the environmental effects of
projects before making any decisions or
exercising any powers that enable the
project to proceed.
Mining activities can result in harmful
emissions to the environment, including
air contaminants, greenhouse gases and
substances that have been declared toxic
under the 1999 Canadian Environmental
Protection Act. The National Pollutant
Release Inventory (NPRI) is Canadas
legislated, publicly accessible inventory
of pollutant releases, disposals and
transfers for recycling. Information is
reported by facilities and published by
Environment Canada. The NPRI reports
on pollutant releases to air, water and
land, as well as disposal.
Level & Trend

he level of
T
Regulation is
Heavyand the
trend is S
teady
WWW.IBISWORLD.CA
Industry Assistance
Level & Trend
he level of Industry
T
Assistance is
Mediumand the
trend is S
teady

in Canada receives a moderate level of
industry assistance. The majority of
assistance has come in the form of
favourable tax regimes, which typically
allow mining companies to recover
invested capital before paying federal,
provincial and territorial taxes.
Considering the high levels of capital and
long lead times required to open a mine,
these benefits can be substantial and
greatly benefit mine operators.
Furthermore, the Canadian government
also provides benefits to shareholders of
Canadian mining companies, which
enables mine operators to raise capital
more easily than other industries
operating in Canada.
Mining Association of Canada
The Mining Association of Canada (MAC)
is a national industry organization
governed by a team of industry
professionals. MACs functions include
advocacy, stewardship and collaboration.
The association promotes the industrys

interests nationally and internationally,
works with governments on policies
affecting minerals, informs the public
and encourages member companies to
cooperate to solve common problems.
MAC also works closely with provincial
and territorial mining associations and
other industries, as well as with
environmental and community groups
across Canada and globally.
Towards Sustainable Mining (TSM)
The TSM project is an industry-wide,
performance-based program that aims to
assist mining companies assess their
environmental impact. Established by
MAC in 2004, TSM provides industry
operators with tools to monitor energy
usage and to manage mining risks that
affect the entire mining industry. The
program aims to evaluate the social
impacts of mining, and all member
companies of the MAC must participate
in the program.
WWW.IBISWORLD.CA
31
Key Statistics
Industry Data
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Revenue
($m)
3,659.1
3,521.8
4,251.2
4,955.9
6,090.0
6,640.4
6,831.8
7,229.9
7,661.8
7,622.3
7,657.0
7,694.4
7,729.2
7,833.2
7,938.3
Annual Change
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Revenue
(%)
-3.8
20.7
16.6
22.9
9.0
2.9
5.8
6.0
-0.5
0.5
0.5
0.5
1.3
1.3
Industry
Value Added Establish($m)
ments
1,188.8
27
1,239.6
25
1,648.0
28
1,824.0
30
1,512.9
29
2,100.6
32
1,061.0
34
1,671.7
35
1,927.9
34
2,350.6
34
2,366.4
34
2,369.5
34
2,389.1
34
2,429.1
33
2,470.1
33
Enterprises Employment
24
3,377
22
3,976
25
5,927
27
4,938
26
6,049
29
8,563
29
9,414
30
9,447
30
9,416
30
9,472
30
9,483
30
9,535
29
9,555
29
9,287
29
9,301
Exports
($m)
1,470.4
1,960.1
2,040.4
3,286.1
3,867.7
3,475.1
3,618.5
3,647.3
3,499.7
3,596.3
3,557.0
3,595.3
3,602.9
3,654.6
3,702.2
Imports
($m)
71.0
89.2
112.1
190.6
256.1
231.4
212.8
197.7
200.0
154.0
147.7
141.7
140.2
140.7
142.0
Wages
($m)
273.7
325.0
500.6
432.3
515.4
781.8
849.9
959.9
889.4
884.5
878.3
858.8
856.1
859.8
863.9
World price
Domestic
of gold
Demand ($ per troy ounce)
2,259.7
696.9
1,650.9
872.5
2,322.9
972.1
1,860.4
1,225.5
2,478.4
1,569.6
3,396.7
1,668.5
3,426.1
1,410.8
3,780.3
1,266.3
4,362.1
1,160.6
4,180.0
1,180.2
4,247.7
1,170.3
4,240.8
1,161.5
4,266.5
1,151.7
4,319.3
1,142.9
4,378.1
1,134.1
Industry
EstablishValue Added
ments
(%)
(%)
4.3
-7.4
32.9
12.0
10.7
7.1
-17.1
-3.3
38.8
10.3
-49.5
6.3
57.6
2.9
15.3
-2.9
21.9
0.0
0.7
0.0
0.1
0.0
0.8
0.0
1.7
-2.9
1.7
0.0
Enterprises Employment
(%)
(%)
-8.3
17.7
13.6
49.1
8.0
-16.7
-3.7
22.5
11.5
41.6
0.0
9.9
3.4
0.4
0.0
-0.3
0.0
0.6
0.0
0.1
0.0
0.5
-3.3
0.2
0.0
-2.8
0.0
0.2
Exports
(%)
33.3
4.1
61.1
17.7
-10.2
4.1
0.8
-4.0
2.8
-1.1
1.1
0.2
1.4
1.3
Imports
(%)
25.6
25.7
70.0
34.4
-9.6
-8.0
-7.1
1.2
-23.0
-4.1
-4.1
-1.1
0.4
0.9
Wages
(%)
18.7
54.0
-13.6
19.2
51.7
8.7
12.9
-7.3
-0.6
-0.7
-2.2
-0.3
0.4
0.5
Domestic
Demand
(%)
-26.9
40.7
-19.9
33.2
37.1
0.9
10.3
15.4
-4.2
1.6
-0.2
0.6
1.2
1.4
World price
of gold
(%)
25.2
11.4
26.1
28.1
6.3
-15.4
-10.2
-8.3
1.7
-0.8
-0.8
-0.8
-0.8
-0.8
Average Wage
($)
81,048.27
81,740.44
84,460.94
87,545.57
85,204.17
91,299.78
90,280.43
101,608.98
94,456.24
93,380.49
92,618.37
90,068.17
89,597.07
92,581.03
92,882.49
Share of the
Economy
(%)
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
Key Ratios
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
IVA/Revenue
(%)
32.49
35.20
38.77
36.80
24.84
31.63
15.53
23.12
25.16
30.84
30.91
30.80
30.91
31.01
31.12
Figures are in inflation-adjusted 2016 dollars.
Imports/
Demand
(%)
3.14
5.40
4.83
10.25
10.33
6.81
6.21
5.23
4.58
3.68
3.48
3.34
3.29
3.26
3.24
Exports/
Revenue
(%)
40.18
55.66
48.00
66.31
63.51
52.33
52.97
50.45
45.68
47.18
46.45
46.73
46.61
46.66
46.64
Revenue per
Employee
($000)
1,083.54
885.76
717.26
1,003.62
1,006.78
775.48
725.71
765.31
813.70
804.72
807.44
806.96
808.92
843.46
853.49
Wages/Revenue
(%)
7.48
9.23
11.78
8.72
8.46
11.77
12.44
13.28
11.61
11.60
11.47
11.16
11.08
10.98
10.88
Employees
per Est.
125.07
159.04
211.68
164.60
208.59
267.59
276.88
269.91
276.94
278.59
278.91
280.44
281.03
281.42
281.85
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
Jargon & Glossary
Industry Jargon
IBISWorld Glossary
BULLIONGold cast into ingots, coins or bars, typically

with a purity of 99.9% gold, valued by its mass and
purity
DOREAfter being minted, this first stage in the

purification process of the gold ore produces a cast bar
(gold dore) that is about 90.0% gold
CONCENTRATEA very fine, powder-like product

containing the valuable ore mineral from which most of
the waste mineral has been eliminated.
TROY OUNCEA unit of imperial measure most

commonly used to gauge the weight of precious metals
and defined as 0.0311034768 kg = 31.1034768 g
BARRIERS TO ENTRYHigh barriers to entry mean that

new companies struggle to enter an industry, while low
barriers mean it is easy for new companies to enter an
industry.
INDUSTRY REVENUEThe total sales of industry goods

and services (exclusive of excise and sales tax); subsidies
on production; all other operating income from outside
the firm (such as commission income, repair and service
income, and rent, leasing and hiring income); and
capital work done by rental or lease. Receipts from
interest royalties, dividends and the sale of fixed
tangible assets are excluded.
CAPITAL INTENSITYCompares the amount of money

spent on capital (plant, machinery and equipment) with
that spent on labour. IBISWorld uses the ratio of
depreciation to wages as a proxy for capital intensity.
High capital intensity is more than $0.333 of capital to
$1 of labour; medium is $0.125 to $0.333 of capital to
$1 of labour; low is less than $0.125 of capital for every
$1 of labour.
CONSTANT PRICESThe dollar figures in the Key
Statistics table, including forecasts, are adjusted for
inflation using the current year (i.e. year published) as
the base year. This removes the impact of changes in
the purchasing power of the dollar, leaving only the
real growth or decline in industry metrics. The inflation
adjustments in IBISWorlds reports are made using
Statistics Canadas implicit GDP price deflator.
DOMESTIC DEMANDSpending on industry goods and
services within Canada, regardless of their country of
origin. It is derived by adding imports to industry
revenue, and then subtracting exports.
EMPLOYMENTThe number of permanent, part-time,
temporary and casual employees, working proprietors,
partners, managers and executives within the industry.
ENTERPRISEA division that is separately managed and
keeps management accounts. Each enterprise consists
of one or more establishments that are under common
ownership or control.
ESTABLISHMENT The smallest type of accounting unit
within an enterprise, an establishment is a single
physical location where business is conducted or where
services or industrial operations are performed. Multiple
establishments under common control make up an
enterprise.
EXPORTSTotal value of industry goods and services sold
by Canadian companies to customers abroad.
IMPORTS Total value of industry goods and services
brought in from foreign countries to be sold in Canada.
INDUSTRY CONCENTRATIONAn indicator of the
dominance of the top four players in an industry.
Concentration is considered high if the top players
account for more than 70% of industry revenue.
Medium is 40% to 70% of industry revenue. Low is less
than 40%.
INDUSTRY VALUE ADDED The market value of goods

and services produced by the industry minus the cost of
goods and services used in production. IVA is also
described as the industrys contribution to GDP, or profit
plus wages and depreciation.
INTERNATIONAL TRADEThe level of international
trade is determined by ratios of exports to revenue and
imports to domestic demand. For exports/revenue: low is
less than 5%; medium is 5% to 20%; and high is more
than 20%. Imports/domestic demand: low is less than
5%; medium is 5% to 35%; and high is more than
35%.
LIFE CYCLEAll industries go through periods of growth,
maturity and decline. IBISWorld determines an
industrys life cycle by considering its growth rate
(measured by IVA) compared with GDP; the growth rate
of the number of establishments; the amount of change
the industrys products are undergoing; the rate of
technological change; and the level of customer
acceptance of industry products and services.
NONEMPLOYING ESTABLISHMENTBusinesses with
no paid employment or payroll, also known as
nonemployers. These are mostly set up by self-employed
individuals.
PROFITIBISWorld uses earnings before interest and tax
(EBIT) as an indicator of a companys profitability. It is
calculated as revenue minus expenses, excluding
interest and tax.
VOLATILITYThe level of volatility is determined by
averaging the absolute change in revenue in each of the
past five years. Volatility levels: very high is more than
20%; high volatility is 10% to 20%; moderate
volatility is 3% to 10%; and low volatility is less than
3%.
WAGESThe gross total wages and salaries of all
employees in the industry. Benefits and on-costs are
included in this figure.
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Gold & Silver Ore Mining in CanadaJune 2016 1

Worth its weight: Demand for gold and silver

IBISWorld Industry Report 21222CA

Gold & Silver Ore

2 About this Industry

19 Market Share Concentration

19 Key Success Factors

19 Cost Structure Benchmarks

Key External Drivers

10 Industry Life Cycle

25 Agnico Eagle Mines Ltd.

12 Products & Markets

12 Products & Services

28 Technology & Systems

29 Regulation & Policy

32 Jargon & Glossary

www.ibisworld.ca | 1-800-330-3772 | info @ibisworld.ca

Gold & Silver Ore Mining in CanadaJune 2016 2

About this Industry

This industry mines and prepares ores

The primary activities of this industry are

others maintain refining facilities abroad.

Gold ore mining

The major products and services in this industry are

21211CA Coal Mining in Canada

For additional information on this industry

Gold & Silver Ore Mining in Canada June 2016

Annual Growth 11-16

Annual Growth 16-21

Consumer confidence index

Revenue vs. employment growth

Products and services segmentation (2016)

Silver ore, powder, concentrates

Key External Drivers

World price of silver

Gold ore, powder, concentrates

Life Cycle Stage

Gold & Silver Ore Mining in CanadaJune 2016 4

Executive Summary | Key External Drivers | Current Performance

Operators in the Gold and Silver Ore

in the world prices of gold and silver

Key External Drivers

World price of gold

major players Goldcorp and Barrick.

Silver acts as a hedge against inflation,

Gold & Silver Ore Mining in CanadaJune 2016 5

the commodities. Conversely, when the

relatively more affordable for foreign

Consumer Confidence Index

Key External Drivers

Gold & Silver Ore Mining in CanadaJune 2016 6

Revenue for primary metals such as silver

Not all that glitters is

Since reaching historic highs in the volatile

However, in 2013, the world price of gold

Gold & Silver Ore Mining in CanadaJune 2016 7

Trade levels have declined in the past five

central banks have been attempting to

The number of industry operators has

entry in the industry ensure that the

Gold & Silver Ore Mining in CanadaJune 2016 8

The Gold and Silver Ore Mining industry

estimates that industry revenue will grow

Industry production volumes are expected

21222CA Gold & Silver Ore Mining in Canada Industry Report

21222CA Gold & Silver Ore Mining in Canada Industry Report