Tsx-venture soars on rally in mining

Gold exploration and early stage companies in other sectors are fuelling a massive rally at the Tsx-venture exchange, which has come roaring back after hitting rock bottom earlier this year when the coronavirus pandemic froze most economic activity.

The S&P/TSX Venture Composite Index has more than doubled to 739.5 on Thursday, after dropping to a 10-year low of 358.04 in early March.

Much of the surge has been driven by investors’ new-found interest in all things gold, including junior gold companies, which are suddenly back in vogue as the price of bullion sits near an all-time high, trading near US$1,951 per ounce as of Thursday afternoon.

The junior gold companies, many of which are still in the exploration stage, as well as mid-tier miners have by some metrics outperformed their senior counterparts.

For example, shares in Vaneck Vectors Junior Gold Miners ETF (GDXJ), which tracks mid-tier gold mining companies, have surged 164 per cent to US$58.99 since March, while the Vaneck Vectors Gold Miners ETF (GDX), which tracks more senior gold miners, rose 119 per cent during the same period.

“It’s been quite a run here over the past six months for junior mining,” said Dean Mcpherson, head of business development for global mining at TMX Group Ltd., which owns the TSX and the TSX-V exchanges. “Precious metals, of course, is what started it all.”

Top performers on the TSX-V include Pure Gold Mining Inc., up 316 per cent since early March to $2.00 per share, and Great Bear Resources Ltd., up 274 per cent during the same period to $15.74. Both are developing gold projects near Red Lake, Ont., and Pure Gold plans to produce gold by the end of the year.

In the past month, Mcpherson said trading volumes of junior mining companies on the TSX-V for perhaps the first ever exceeded the trading volumes of mining companies on the TSX.

Of course, shares in other mineral exploration companies, as well as green-tech companies, have also spiked, as have those in internet and technology companies. But the interest in gold miners and explorers comes after a long fallow period.