'The risk takers have gone'

Its stock price soared more than 459 per cent between its first day of trading last September and the end of 2017, and it hit close to $2 billion of market capitalization during that time. It has fallen dramatically since then, and is trading 56 per cent lower since the start of the year.

As Canada prepares to legalize marijuana, companies looking to claim a piece of the burgeoning industry have been attracting hordes of capital. For instance, stocks of and have surged 120 per cent, 189 per cent and 316 per cent, respectively over the past 12 months. As a comparison, VanEck Vectors Gold Miners ETF, one of the largest gold mining companies’ funds, eked out a 0.44 per cent gain during that period.

It’s left gold producers feeling like a pall hangs over their sector.

“The risk takers have gone somewhere else — they’ve gone into bitcoin or cannabis,” said John Green, chief financial officer of Unigold, who added that his comments reflected his personal view, and not the official views of his fledgling company.

Nor is the sentiment limited to junior mining company executives.

Even Clive Johnson, chief executive of B2Gold — which he describes as the “new senior” as it predicts its gold production will increase from 650,000 ounces last year to as much as 950,000 in 2018 — said marijuana and cryptocurrencies have hurt junior gold companies.

But he also blamed larger gold companies for underperforming during the last few years, for deterring investors from the gold space.

“It’s not just the weed phenomenon, which is relatively new,” said Johnson, “the fact is the gold industry was not performing well — quite badly actually, and it gives me no pleasure to say that.”

Theoretically, undervalued junior gold companies would be a good thing for the senior gold companies that look to purchase them — but Johnson expressed little excitement for the junior sector and said his company is focused on its own projects.

At the end of the day, many gold producers are reminding themselves why they got into the space in the first place — because gold has been a store of value for millennia.

“You always need metals,” said Green. “Are people going to need bitcoin in five years? I don’t know.”