Despite how bad it feels out there today, it could get worse. Metal prices are still at historically high levels and production cuts have been minimal–so far. Most mining companies have been chopping their sustaining costs and have managed to remain cash flow positive, at least at the operational level. The rapid drop in energy prices and near-global currency devaluations may have saved us from the final leg down– or just put the inevitable off for a year or two. As for gold, it still faces a possible pounding as (if) the Fed begins increasing interest rates–and it’s hard to see what could take it higher that hasn’t already happened.

So yes, it could easily get worse and drag on for some time. There are still hundreds of zombie juniors that have to fade away, and a number of resource funds still in liquidation mode. There are no catalysts on the horizon to take the mining sector higher; and nearly everything I see says mining is dead. It is hard to imagine how things could look much worse, which is another way of saying this is how the bottom looks every time, before it eventually and slowly gets better.