Category: Canada

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A United States president fixated on critical minerals? Check. One who is hostile to an energy transition that has created demand for critical minerals? Check. Artificial intelligence-fuelled emerging technology that could upend the exploration process? Check.

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Starting this weekend, the Prospectors & Developers Association of Canada will host one of the world’s largest mining conferences in downtown Toronto, drawing tens of thousands of geologists, engineers and investors as the sector confronts an uncertain backdrop.

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Two years ago, PDAC attendees were electrified by the possibilities after the U.S. Congress passed the Inflation Reduction Act (IRA), a bill that provides rich subsidies for companies producing batteries in that country and even countries that have free trade agreements with the U.S.

“It’s changed everything,” Ken Hoffman, head of battery raw materials at consulting firm McKinsey & Co., said in a keynote speech in 2023. “It’s going to change metal flows; it’s going to change the pricing; it’s going to introduce premiums.”

Hoffman estimated the bill could inject US$1 trillion into the battery metal supply chain.

Since then, things have changed for Canada’s mining sector, albeit nothing seismic. Between 2023 and 2024, mining sector companies listed on the Toronto Stock Exchange raised an average total of $9 billion in capital per year — almost exactly what the sector raised on average in the previous two-year period.

Now, the IRA faces an uncertain future: U.S. President Donald Trump issued an executive order on his first day in office that called for a pause in funding on IRA projects — it would require an act of Congress to fully annul the bill — and he has called for eliminating government mandates that require automakers to produce an increasing percentage of electric vehicles during the next decade.

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Of course, he is only weeks into his four-year term, and it remains too early to discuss the overall impact of his policies. Already, Trump has talked about the critical minerals in Greenland, Ukraine and, ahem, Canada, suggesting he would like to see greater mining in all three countries.

With that in mind, here are three themes showing up in this year’s conference.

Potash push

Mike Henry, the soft-spoken Canadian chief executive of BHP Group Ltd., the world’s largest mining company, based in Australia, will deliver the first PDAC keynote on Sunday morning.

His speech is being billed as: “A 2050 population nearing 10 billion, increasingly urbanized, seeking higher standards of living and embarking on the energy transition, will need a lot more metals and minerals. What will it take to get where we want to go?”

Throughout his tenure as CEO, Henry has pushed for a more Canadian-centric approach. About 140 kilometres east of Saskatoon, the company is building one of the world’s largest potash mines, at an estimated cost of $14 billion, and is set to begin production in 2026.

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He has said he is redirecting BHP into more future-facing commodities that are likely to be in demand based on “megatrends” such as decarbonization and growing populations.

Natural Resources Canada estimates the world produced 67.5 million tonnes of potash, a fertilizer used to increase crop production, in 2023. Canada accounted for about one-third of global production, and only a few other countries — Russia, Belarus and China — also produce significant quantities.

BHP’s Jansen mine is expected to eventually produce 8.5 million tonnes per year.

“There are only two big production basins, Russia-Belarus and Canada,” Henry said in 2023. “Obviously, Canada is a much more attractive investment destination on a whole range of fronts.”

The company has also established an office to oversee global exploration in Toronto.

US$3,000 gold

Whatever happens with critical minerals, gold prices continue to zoom upward and have crept within striking distance of US$3,000 per ounce, which is a milestone that has long been discussed inside the mining sector but never achieved.

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On Thursday, the price of an ounce of gold was at around US$2,873 per ounce, up 43 per cent in the past year.

Eric Sprott, the Toronto-based billionaire who has invested heavily in Canadian exploration companies with a flair for precious metal companies and is delivering a keynote address at PDAC, said it’s only a matter of time before gold hits US$3,000 per ounce.

“In reality, gold can get to US$8,000,” he said.

Gold prices started rising significantly in 2023 as central banks in China and other countries stepped up purchases for their reserves.

In reality, gold can get to US$8,000

Eric Sprott

“They really stepped up to the plate after the Russia-Ukraine conflict ignited,” said Ryan McIntyre, a managing partner at Sprott Inc., a global investment manager founded but no longer affiliated with its namesake billionaire.

He said the increased bullion purchases by central banks were a response to sanctions on Russia that froze many of its assets that were denominated in U.S. dollars. Afterwards, he said countries realized that gold looked more attractive as an independent store of value.

Still, he said many Western investors and financial institutions haven’t stepped up their exposure to gold because other investments have performed so well.

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“I think people have done so well with generic, call it S&P 500 stuff, they haven’t really had to worry about it,” he said.

Sprott said that may be changing as the U.S. equity markets suffer.

“The things that people are used to putting money into are showing signs of strain,” he said.

To the moon

Striking the mother lode, a.k.a. finding a high-grade, large-scale mineral deposit, has long been considered one of, if not the, hardest parts of the mining business.

What used to be a practice that began with prospectors walking hills and kicking rocks in search of something shiny or at least different has started to dramatically change.

Now, companies such as Fleet Space Technologies Pty Ltd. are combining satellite imaging and artificial intelligence to model mineral deposits.

In December, Teachers’ Venture Growth, the late-stage venture and growth investment arm of Ontario Teachers’ Pension Plan, led a US$100-million funding round for Fleet Space, which is based in Australia.

This year, company co-founder and chief executive Flavia Tata Nardini, who has a background in aerospace engineering, is also giving a keynote speech at PDAC.

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Her company’s clients have included Barrick Gold Corp. and Rio Tinto LLC, among other major mining companies.

In addition to exploring subsurface mineral deposits on Earth, the company is planning to deploy a geophysical device to the moon in 2026.

“Humanity is on the brink of making tremendous strides in our scientific understanding of the lunar regolith by using advanced seismic technologies to acquire deeper insights about the Moon’s subsurface,” Matt Pearson, co-founder and chief exploration officer at Fleet, said in a release about its mission to the moon.

• Email: gfriedman@postmedia.com

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THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

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Full Year 2024 Financial Highlights⁽¹⁾:

• Revenues of $2.7 billion
• Gross Margin at 16%
• Adjusted EBITDA⁽²⁾⁽³⁾ amounted to $195.5 million
• Net Earnings amounted to $54.2 million
• Total dividends of $0.56 per share declared⁽⁴⁾

Q4 2024 Financial Highlights⁽¹⁾:

• Revenues of $707.8 million
• Gross Margin at 16%
• Adjusted EBITDA⁽²⁾⁽³⁾ amounted to $51.9 million
• Net Earnings amounted to $8.3 million
• Quarterly dividend of $0.14 per share declared⁽⁴⁾

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VANCOUVER, British Columbia, Feb. 27, 2025 (GLOBE NEWSWIRE) — Doman Building Materials Group Ltd. (“Doman” or “the Company”) (TSX:DBM) announced today its fourth quarter and full year 2024 financial results⁽¹⁾ for the period ended December 31, 2024.

For the year ended December 31, 2024⁽¹⁾, consolidated revenues increased to $2.7 billion, compared to $2.5 billion in 2023, largely due to the impact of the results of the 2024 acquisitions, which were also offset with the slowing in the construction materials market. The Company’s sales by product group in the period were made up of 76% construction materials, with the remaining balance resulting from specialty and allied products of 20%, and other of 4%.

Gross margin dollars were $424.8 million in 2024, versus $402.7 million in 2023, benefiting from the results of the Company’s recent acquisitions. Gross margin percentage was 16.0% during the year, compared to the 16.2% achieved in 2023, reflecting year-over-year decreases in certain construction materials categories within the Company’s legacy operations.

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EBITDA⁽³⁾ and Adjusted EBITDA⁽²⁾ amounted to $192.2 million and $195.5 million, respectively, compared to EBITDA of $196.1 million in 2023. Adjusted EBITDA in 2024 excluded $3.3 million in non-recurring acquisition related costs. Net earnings for the full year ended December 31, 2024, were $54.2 million versus $75.8 million in the comparative period of 2023. Net earnings for the year were impacted by the previously discussed non-recurring acquisition-related costs. Adjusted net earnings before these non-recurring costs were $56.6 million.

The Company declared a total of $0.56 per share⁽⁴⁾ in dividends in 2024, which was unchanged compared to 2023.

For the three-month period ended December 31, 2024⁽¹⁾, revenues amounted to $707.8 million, compared to $527.4 million in the same period in 2023. The Company’s sales by product group in the quarter were made up of 79% construction materials, with the remaining balance of sales resulting from specialty and allied products of 17%, and forestry and other of 4%.

Gross margin dollars were $113.3 million in the three-month period versus $80.6 million in the comparative quarter of 2023. Gross margin percentage was 16.0% in the quarter, an increase from 15.3% achieved in the same quarter of 2023.

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EBITDA⁽³⁾ and Adjusted EBITDA⁽²⁾ for the fourth quarter amounted to $51.0 million and $51.9 million, respectively, compared to EBITDA of $33.2 million during the same period in 2023. Adjusted EBITDA in the fourth quarter of 2024 excluded $1.0 million in non-recurring acquisition related costs. Net earnings for the three-month period ended December 31, 2024, were $8.3 million versus $10.5 million in the comparative period of 2023. Net earnings for the quarter were impacted by the previously discussed non-recurring directly attributable acquisition related costs. Adjusted net earnings before these non-recurring costs were $9.0 million.

The Company declared a $0.14 per share⁽⁴⁾ dividend, which was paid on January 15, 2025, to shareholders of record at the close of business on December 31, 2024.

“We successfully navigated through 2024 by maintaining our focus on operational excellence through inventory and overall cost management, all while strengthening our financial position and executing significant and strategic growth opportunities,” commented Amar S. Doman, Chairman of the Board. “We are proud of our accomplishments in 2024 which have resulted in strong financial results in the fourth quarter, which is a seasonally slower period for Doman.”

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Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA:

About Doman Building Materials Group Ltd.

Founded in 1989, Doman is headquartered in Vancouver, British Columbia, and trades on the Toronto Stock Exchange under the symbol DBM.

As Canada’s only fully integrated national distributor in the building materials and related products sector, Doman operates several distinct divisions with multiple treating plants, planing and specialty facilities and distribution centres coast-to-coast in all major cities across Canada and coast-to-coast across the United States.

Strategically located across Canada, Doman Building Materials Canada operates distribution centres coast-to-coast, and Doman Treated Wood Canada operates multiple treating plants near major cities. In the United States: headquartered in Dallas, Texas, Doman Lumber operates 21 treating plants, two specialty planing mills and five specialty sawmills located in nine states, distributing, producing and treating lumber, fencing and building material servicing the central U.S.; Doman Tucker Lumber operates three treating plants, specialty sawmilling operations and a captive trucking fleet serving the U.S. east coast; Doman Building Materials USA and Doman Treated Wood USA serve the U.S. west coast with multiple locations in California and Oregon; and in the state of Hawaii the Honsador Building Products Group services 15 locations across all the islands.  The Company’s Canadian operations also include ownership and management of private timberlands and forest licenses, and agricultural post-peeling and pressure treating through its Doman Timber operations.  

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For additional information on Doman Building Materials Group Ltd., please refer to the Company’s filings on SEDAR+ and the Company’s website www.domanbm.com.

For further information regarding Doman please contact:

Ali Mahdavi
Investor Relations
416-962-3300
ali.mahdavi@domanbm.com

Certain statements in this press release may constitute “forward-looking” statements. When used in this press release, forward-looking statements often but not always, can be identified by the use of forward-looking words such as, including but not limited to, “may”, “will”, “intend”, “should”, “expect”, “believe”, “outlook”, “predict”, “remain”, “anticipate”, “estimate”, “potential”, “continue”, “plan”, “could”, “might”, “project”, “targeting” or the inverse or negative of these terms or other similar terminology. Forward-looking information in the full year 2024 Reporting Documents includes, without limitation, statements regarding funding requirements, dividends, commodity pricing, debt repayment, interest rates, economic conditions data and housing starts. Additionally, the ultimate impact of COVID-19 on the Company’s results is difficult to quantify, as it will depend on, inter alia, the ongoing duration and impact of the pandemic, the impact of government policies, and the pace of economic recovery. These statements are based on management’s current expectations regarding future events and operating performance, and on information currently available to management, speak only as of the date of the full year 2024 Reporting Documents and are subject to risks which are described in the Company’s current Annual Information Form dated March 28, 2024 (“AIF”) and the Company’s public filings on the Canadian Securities Administrators’ website at www.sedarplus.com (“SEDAR”) and as updated from time to time, and would include, but are not limited to, dependence on market economic conditions, risks related to the impact of geopolitical conflicts, local, national, and international health concerns, including but not limited to COVID-19 or other viruses, epidemics or pandemics, sales and margin risk, acquisition and integration risks and operational risks related thereto, competition, information system risks, technology risks, cybersecurity risks, availability of supply of products, interest rate risks, inflation risks, risks associated with the introduction of new product lines, product design risk, product liability risk, modern slavery and supply chain risks, environmental risks, climate change risks, volatility of commodity prices, inventory risks, customer and vendor risks, contract performance risk, availability of credit, credit risks, performance bond risk, currency risks, insurance risks, tax risks, risks of legislative or regulatory changes, international trade and tariff risks, operational and safety risks, resource industry risks, resource extraction risks, risks relating to remote operations, forestry management and silviculture, fire and natural disaster risks, key executive risk and litigation risks. These risks and uncertainties may cause actual results to differ materially from those contained in the statements. Such statements reflect management’s current views and are based on certain assumptions. Some of the key assumptions include, but are not limited to, assumptions regarding the performance of the Canadian and the United States (“US”) economies, the impact of COVID-19, other viruses, epidemics, pandemics or health risks, interest rates, exchange rates, inflation, capital and loan availability, commodity pricing, the Canadian and the US housing and building materials markets; international trade matters; post-acquisition operation of a business; the amount of the Company’s cash flow from operations; tax laws; laws and regulations relating to the protection of the environment, including the impacts of climate change, and natural resources; and the extent of the Company’s future acquisitions and capital spending requirements or planning in respect thereto, including but not limited to the performance of any such business and its operation; availability or more limited availability of access to equity and debt capital markets to fund, at acceptable costs, the Company’s future growth plans, the implementation and success of the integration of acquisitions, the ability of the Company to refinance its debts as they mature; the direct and indirect effect of the US housing market and economy; exchange rate fluctuations between the Canadian and US dollar; retention of key personnel; the Company’s ability to sustain its level of sales and earnings margins; the Company’s ability to grow its business long-term and to manage its growth; the Company’s management information systems upon which it is dependent are not impaired, ransomed or unavailable; the Company’s insurance is sufficient to cover losses that may occur as a result of its operations as well as the general level of economic activity, in Canada and the US, and abroad, discretionary spending and unemployment levels; the effect of general economic conditions; market demand for the Company’s products, and prices for such products; the effect of forestry, land use, environmental and other governmental regulations; and the risk of losses from fires, floods and other natural disasters and unemployment levels. They are, by necessity, only estimates of future developments and actual developments may differ materially from these statements due to a number of known and unknown factors. Investors are cautioned not to place undue reliance on these forward-looking statements. All forward-looking information in the full year 2024 Reporting Documents is qualified by these cautionary statements. Although the forward-looking information contained in the full year 2024 Reporting Documents is based on what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Certain statements included in the full year 2024 Reporting Documents may be considered “financial outlook” for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than the full year 2024 Reporting Documents.

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In addition, there are numerous risks associated with an investment in the Company’s common shares and senior unsecured notes, which are also further described in the “Risks and Uncertainties” section in these full year 2024 Reporting Documents and include but are not limited to the factors and risks described in the periodic and other reports filed by Doman with Canadian securities commissions and available on SEDAR in the “Risk Factors” sections of Doman’s annual information form dated March 28, 2024, as may be updated from time to time. These forward-looking statements speak only as of the date of this press release. We caution that the foregoing factors that may affect future results are not exhaustive. When relying on our forward-looking statements to make decisions with respect to Doman, investors and others should carefully consider the foregoing factors and other uncertainties and potential events.

Neither Doman nor any of its associates or directors, officers, partners, affiliates, or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in these communications will actually occur. You are cautioned not to place undue reliance on these forward-looking statements. Except as required by applicable securities laws and legal or regulatory obligations, Doman is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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⁽¹⁾ Please refer to our Q4 2024 MD&A and Financial Statements for further information. Our Q4 2024 Financial Statements filings are reported under International Financial Reporting Standards (“IFRS”).

⁽²⁾ In the discussion, reference is made to Adjusted EBITDA, which is EBITDA as defined above, before certain non-recurring or unusual items. This is not a generally accepted earnings measure under IFRS and does not have a standardized meaning under IFRS. The measure as calculated by Doman may not be comparable to similarly-titled measures reported by other companies. Adjusted EBITDA is presented as we believe it is a useful indicator of Doman’s ability to meet debt service and capital expenditure requirements from its regular business before non-recurring items. Adjusted EBITDA should not be considered by an investor as an alternative to net earnings or cash flows as determined in accordance with IFRS. For a reconciliation from Adjusted EBITDA to the most directly comparable measures calculated in accordance with IFRS refer to “Reconciliation of Net Earnings to Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) and Adjusted EBITDA”.

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⁽³⁾ In the discussion, reference is made to EBITDA, which represents earnings from continuing operations before interest, including amortization of deferred financing costs, provision for income taxes, depreciation, and amortization. This is not a generally accepted earnings measure under IFRS and does not have a standardized meaning under IFRS, and therefore the measure as calculated by Doman may not be comparable to similarly titled measures reported by other companies. EBITDA is presented as we believe it is a useful indicator of a company’s ability to meet debt service and capital expenditure requirements and because we interpret trends in EBITDA as an indicator of relative operating performance. EBITDA should not be considered by an investor as an alternative to net earnings or cash flows as determined in accordance with IFRS. For a reconciliation of EBITDA to the most directly comparable measures calculated in accordance with IFRS refer to “Reconciliation of Net Earnings to Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) and Adjusted EBITDA”.

⁽⁴⁾ On December 13, 2024, Doman declared a quarterly dividend of $0.14 per share, which was paid on January 15, 2025, to shareholders of record on December 31, 2024. Please refer to our Q4 2024 MD&A and Financial Statements for more information.

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Success stories are increasingly rare in Canada’s economy. But mining is one. And it’s mainly market-driven.

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These days most public commentary in focuses on chronic slow growth, low investment and stagnant exports. In all this gloom, mining’s buoyancy is a reminder that Canada can still be a beacon for investment and compete successfully in global markets. The sector’s resurgence is an example to our many struggling industries that even a poor decade can be followed by brighter days. Another lesson worth learning: mining’s revival was not due to elaborate government plans for growth clusters, but mostly involved allowing market forces to operate.

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Mining’s recovery over the past two decades has been truly remarkable. The industry contracted steadily in the 1990s. Slumping demand and depressed prices on world markets caused output to decline. Investment plumbed depths so low that mining’s capital stock fell outright. Not surprisingly, employment also fell. At the time, many analysts believed all these negative trends signalled the end of mining’s place among Canada’s growth leaders.

Instead, the doldrums of the 1990s were followed by two decades of spectacular growth. Record high prices on global markets boosted exports, investment and employment to their highest levels ever. Led by gold, potash, copper, nickel, iron ore and even coal, metals and minerals are now Canada’s second largest export sector behind energy. But few Canadians seem aware of mining’s turnaround.

Mining’s nominal GDP is now $61 billion per year, more than double its pre-pandemic high. Its share of GDP is up from 0.9 per cent in 2000 to 2.0 per cent, no mean feat when each tenth of a point represents $3.1 billion. This surge reflects both higher production volumes and consistently higher prices for mining products. In fact, mining prices have risen more than any other commodity’s. Energy prices get most of the public’s attention because of the impact gasoline and home heating bills have on household budgets. But prices for metals and minerals have increased almost three times faster than energy prices since 2000.

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Mining’s record volume of production in 2024 brought its total real growth since 2009 to 88 per cent, putting it in the vanguard of Canada’s growth industries. And its surge has benefited most provinces: almost all have a significant mining industry, often in remote areas where opportunities for economic development are rare.

Investment has taken off in almost all areas of mining since 2021. Gold and potash stand out with exceptional gains. Investment in gold totalled $19.0 billion over the last three years as high prices spurred producers to search for new deposits. As recently as 2007, gold attracted less than $1 billion of investment. Potash investment has also mushroomed since 2021, with outlays of $10.5 billion.

But capital spending has been buoyant in almost all other areas, too. Nickel and copper attracted record investment of nearly $2 billion in each of the past three years. Iron ore posted its best three years since 2011. Investment in coal mining tripled from its lows a decade ago, belying its reputation as a dying industry a world weaning itself from fossil fuels wants to shun. Although domestic coal consumption has fallen, overseas demand, mostly from Asia, has accelerated and now accounts for nearly three-quarters of export sales.

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Mining exports more than tripled after 2003 to become Canada’s second leading export after energy. Gold exports spearheaded the gain, more than tripling since 2016 to a record $4.9 billion last November. Without fanfare, gold has become Canada’s second largest export, ahead of the value of all vehicle exports. The strength in mining exports extends to iron ore, potash, aluminum and copper. And the market for mine output is much more diversified than for energy and autos, Canada’s other two largest exports, which go mainly to the U.S. In 2023, 44.1 per cent of metal and mineral product exports went overseas.

Canada also exports technical expertise in mining engineering and finance. It’s said that every major mining site in the world employs Canadian know-how. The Toronto Stock Exchange is the world’s largest source of finance for mining projects, with 40 per cent of the world’s public mining companies listed on it, reflecting decades of experience evaluating and financing mining projects. Exporting expertise brings the mining industry lots of income, on top of the export earnings from minerals.

As Canadians in other industries struggle with slow growth, weak investment and low productivity that hinders our export competitiveness, the recent boom in mining stands out as an example of how our resource base can help strengthen our economy — when government stops erecting barriers to its expansion.

Philip Cross is a senior fellow at the Macdonald-Laurier Institute.

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