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The March of the Zombie Miners Continues [Chart]

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The March of the Zombie Miners Continues [Chart]

The March of the Zombie Miners Continues [Chart]

New report shows that over half (52%) of all Canadian-listed mining companies are zombies

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

Canada has a reputation worldwide as the epicenter for mining exploration, and over the years the country’s junior-listed companies have created billions of dollars in wealth through new mineral discoveries.

However, these days, Canada is home to a horror story that seems to haunt investors more each year: 52% of all Canadian mining stocks are now “zombies”, and together the walking dead combine for a total of -$2.8 billion in negative working capital.

The “Zombie” Backstory

It was just over a year ago that Tony Simon, President of Seguro Consulting, brought to our attention the initial problem of the zombie miners.

In this case, his “zombie” definition referred to mining exploration companies that had negative working capital and therefore did not meet the Continuous Listing Requirements (CLR) for the TSX and TSX-V stock exchanges.

Our chart from last year called “A Miner Problem” detailed these requirements, while also showing the ugly state of the 589 listed companies’ balance sheets. Many of these companies have negative working capital because they have no real assets that can be monetized, while being saddled with mounting costs or unsustainable debt.

Zombie Survival Tactics

Break out your Zombie Survival Kit, because we now have another year’s worth of information from Mr. Simon, who is a CPA by designation.

Here are the stats that caught our eye, most of which are also included in this week’s chart:

  • The number of zombie miners increased from 589 to 669.
  • Zombies now make up 52% (up from 40%) of all mining companies in Canada listed on TSX and TSX-V exchanges.
  • The average zombie has had negative working capital for 44 months.
  • Negative working capital of all zombie companies increased by 31.6% from -$2.15 billion (2015) to -$2.83 billion (2016).

Zombie Survival Tactics

Of the original 589 zombies, 398 (68%) stayed as zombies the following year, and were counted towards 2016’s total. Mr. Simon provided us with some additional stats on the companies carried forward:

  • 51% of the zombies have share prices of $0.025 or less.
  • Only 13 zombies had $1,000,000 or more of liquidity in the last quarter.
  • Meanwhile, an astonishing 68% of zombies traded with less than $50,000 of liquidity last quarter.
  • 55% of zombies have market capitalizations of less than $1 million.

In other words, these zombies don’t eat brains for breakfast. Instead, they munch on capital from private placements until no one is willing to feed them.

So why do they continue to exist?

More Zombies, More Problems

From the perspective of the zombie management teams, it makes sense why they still roam the streets in search of capital or a stroke of luck. Just read this post by an anonymous CEO of a zombie company. To sum up: they continue to exist because of fiduciary duty to their shareholders.

However, it gets tougher to explain their existence from other angles.

How does the exchange justify keeping them around? Mr. Simon has been poking at this with a stick to try and get an answer. After all, retail investors have a tough enough time as it is, even without 52% of the total selection of companies being extreme long shots.

Here’s hoping that normalizing commodity prices in gold, silver, zinc, and other metals will help spur mergers and acquisitions in the sector. Perhaps today’s zombies can have their assets “brought to life” on the balance sheets of healthier companies.

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Mining

The Biggest Salt Producing Countries in 2023

In this graphic, we break down global salt production in 2023. China is currently the top producer, accounting for almost 20% of output.

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Voronoi graphic breaking down global salt production in 2023.

The Biggest Salt Producing Countries in 2023

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

Humanity has utilized salt for thousands of years, dating back to ancient civilizations. The U.S. alone consumes more than 48 million tonnes of salt per year.

In this graphic, we break down global salt production in 2023, measured in tonnes. These estimates come from the U.S. Geological Survey’s latest commodity report on salt.

Ample Supply

Salt is essential for human life, serving various purposes including food preservation, flavor enhancement, industrial processes, and health maintenance. The good news is that the world’s continental resources of salt are vast, and the salt content in the oceans is nearly unlimited.

China is currently the top producer of salt, with almost 20% of the output, followed by the U.S. (15%) and India (11%).

CountryProduction (tonnes)
🇨🇳 China53,000,000
🇺🇸 United States42,000,000
🇮🇳 India30,000,000
🇩🇪 Germany15,000,000
🇦🇺 Australia14,000,000
🇨🇦 Canada12,000,000
🇨🇱 Chile9,200,000
🇲🇽 Mexico9,000,000
🇹🇷 Turkey9,000,000
🇷🇺 Russia7,000,000
🇧🇷 Brazil6,600,000
Rest of world67,000,000
Global total273,800,000

The global salt market was valued at $32.6 billion in 2022.

It’s projected to grow from $34.1 billion in 2023 to $48.6 billion by 2030, with a CAGR of 5.2% during the forecast period. This suggests a surprising amount of growth for what is one of the world’s oldest and most common commodities.

Facts About the U.S. Salt Industry

In the U.S., salt is produced by 25 companies, which operate 63 plants across 16 states.

The states that produce the most salt are Kansas, Louisiana, Michigan, New York, Ohio, Texas, and Utah. Altogether, these states account for 95% of domestic production.

The primary uses of salt in the U.S. are highway de-icing (41%), chemical production (38%), and food processing (10%).

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