The mood at this year’s annual Prospectors & Developers Association of Canada (PDAC) convention is expected to be much different than last year, when the mining and metals’ industry was flush with cash, riding a wave of strong commodity prices and talking about mega mergers.

The convention runs March 1 to 4 in Toronto.

A new Ernst & Young paper outlines the deep impact the global credit crisis has had on the Toronto Stock Exchange’s top 100 public mining companies by market capitalization.

In the report Ernst & Young examines the size and scale of the companies, and their commodities, financial health and future prospects.

Of the top 100 companies on the TSX, 92 saw their share price fall between July 2008 and January 2009, leaving many vulnerable to a takeover bid from those with access to cash.

After three years of sustained growth, market cap of the top 100 mining companies in Canada fell starkly in 2008. The number of companies with a market cap of more than $1 billion fell to 23 in January 2009 from 42 in July 2008.

In mid-January 2009, 28 of the top 100 on the TSX had less than $25 million in the bank. A number of companies below this threshold have high-value projects to run and will be looking for either a cash- rich partner or ways to cut costs.

The report notes that the majority of Toronto’s IPOs in 2008 were by small, early-stage exploration companies raising relatively low amounts of capital.

“But the news isn’t all bad,” says Tom Whelan, leader of Ernst & Young’s national mining practice. “There are ways for companies to significantly increase their chances of recovery and future success. We’re telling clients to ‘survive, then thrive,’ meaning focus on getting through the current challenges in order to come out stronger and better-positioned to thrive in the long run.”

IE