TORONTO (miningweekly.com) – It is more difficult for junior exploration companies to generate excitement and draw investors to their stocks than may have been the case ten years ago, financial commentator and editor of The Grandich Letter Peter Grandich commented on Saturday.
Speaking at the Cambridge House resources investment conference under way in Toronto this weekend, Grandich said that a lot of the “ingredients” that have ignited junior stocks in the past are no longer as prevalent.
“The reality is, I don't believe the junior resource market it what it was ten or 15 years ago, despite four or five fold increases in the price of the metals,” Grandich said after a presentation.
“The game is a lot tougher now...we don't have a lot of the ingredients that used to ignite the markets where stocks went.”
He cited the gradual disappearance of mining-focused brokers who used to work on commissions, searching out new companies in which to invest, as well as increased regulation, as reasons for the change.
Another factor that has dampened the appeal of juniors is that no big, exciting new exploration camp has emerged to grab companies' and investors' attention in the last decade or so, he suggested.
“I would argue that outside of Quebec and a little bit of British Columbia, we have not had an area play or a camp play in over ten years,” Grandich said.
“When every year in the junior resource market somewhere in the world we had an area play going on, with people running out and staking, and a map showing where everybody was.”
He cited an example of a CEO who, when touting his firm's British Columbia gold project several years ago, took pains to point out that the project was 2 300 miles due west of the high-profile Voisey's Bay nickel deposit - “and on strike”.
“And his stock probably got a 10% rise because of that,” Grandich quipped.
Things may be about to turn around though, judging by the excitement around the new 'gold rush' developing in Canada's Yukon territory.
In fact, the Yukon was something of a theme in Saturday morning's presentations, starting with the first speech of the day from The Mining Speculator's Greg McCoach, who recently returned from a trip to the exploration camps in the region.
The Yukon also got a mention not only from Grandich, but also the Midas Letter's James West, who included companies exploring in the region in his list of 'stocks most likely to take off'.
Companies exploring new gold discoveries in the Yukon include Kinross Gold, which bought Underworld Resources this year for its White Gold project, Atac Resources and Kaminak Gold.