Three of the four exploration metrics measured by S&P Global Market Intelligence's Pipeline Activity Index (PAI) — drilling activity, initial resources and positive project milestones — decreased in August, as PAI, fell to 84 from 93 in July. They were only partially offset by an increase in significant base metals financings, which was largely driven by Chinese investment of USD$511 million in Ivanhoe Mines. Meanwhile, the decline in the total number of projects reporting drilling results were entirely driven by a fall in gold drilling.
The following analysis is an extract of S&P Global Market Intelligence monthly Industry Monitor, which reviews exploration activity and development in the mining industry. The full report and data files are made available to our Metals & Mining subscribers only. Here are the highlights from our September issue:
 Three of four exploration metrics — drilling activity, initial resources and positive project milestones — decreased in August, as S&P Global Market Intelligence's Pipeline Activity Index, or PAI, fell to 84 from 93 in July. Driven by a strong increase in significant base/other metals financings, the base metals PAI rose to 58 from 48, while the gold PAI fell to 116 from 151 over the same period. |
 The total number of projects reporting drill results fell to 193 from 207 in July, with the decline driven entirely by a fall in gold drilling. In falling by 28 projects, or 19%, drilling for gold essentially fell back to benchmark levels set earlier in the year. The total number of drillholes also fell, by 21% to 3,271 from 4,140 in July, but the August number is still the third highest of 2019 to date. |
 Despite the fall in the PAI, metals prices were up for the third consecutive month in August, as S&P Global Market Intelligence's Exploration Price Index, or EPI, increased to 131 from 126. The indexed price rose for six — gold, silver, nickel, cobalt, platinum and molybdenum — of the eight constituents of the index and decreased for zinc and copper. |
 The number of financings by junior and intermediate companies rose slightly to 181 in August from 180 in July, but the US$1.03 billion total raised was almost double the US$524 million garnered in the previous month. Financings focused on gold mines and projects slid 18% in August to US$303 million.The investment in Ivanhoe pushed base/other metals financings to an 11-month high of US$688 million. August was an all-time low in the number of specialty commodity financings completed since we began data collection in 2014. |
 The number of initial resource announcements fell to five from eight in July. Two of the new resources were from gold projects, and there was one resource each from copper, zinc and nickel projects. |
 Positive project milestone activity was also down in August, with the number of project milestones decreasing to three from five. All three milestones were for gold projects, and there were no negative milestones. |
Mirroring the decline in the PAI, mining equities declined in August as S&P Global Market Intelligence's aggregate market value of the industry's listed companies, based on 2,391 firms, was down 6% month over month at US$1.34 trillion. The aggregate market cap of the industry's top 100 companies also decreased by 6% in August to US$1.11 trillion. The number of tracked mining companies remains at a 10-year low, declining steadily from a high of 2,921 companies in March 2012.
Definitions
The Pipeline Activity Index, or PAI, measures the level and direction of overall activity in the commodity supply pipeline by incorporating significant drill results, initial resource announcements, significant financings and positive project development milestones into a single comparable index.
The Exploration Price Index, or EPI, measures the relative change in precious and base metals prices, weighted by the percentage of overall exploration spending for each metal as a proxy of its relative importance to the industry at a given time.
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