Many of Alaska and northern Canada’s mining explorers have demonstrated incredible resilience during a five-year bear market that has been especially deep and painful, even for seasoned mining sector veterans.
“This has been a particularly treacherous bear market,” longtime natural resource investor, Rick Rule, noted during a July appearance on Palisade Radio. “The reason that this has been a particularly treacherous bear market is that the last bull market was particularly generous.”
Even in the depths of this long and treacherous downturn in metals prices and mining equity markets, more than 40 companies mounted million-dollar-plus exploration programs at promising mineral projects across Alaska, Yukon, Northwest Territories, Nunavut and northern British Columbia during 2015.
Many of the same strategies that help prevent these mineral explorers from being mauled while working in bear country are being applied to surviving the persistent bear markets that have plagued the junior mining sector over the past several years.
One such bear survival strategy is to travel in groups.
A number of North of 60 mining explorers have formed partnerships with companies that look beyond the current market cycle and have the financial wherewithal to see that vision to fruition.
Many other junior companies have merged – a move that consolidates cash, expands portfolios, lowers overhead and strengthens management.
While a bear market may not be the ideal place to raise equity capital through traditional financings, it is a great environment to hunt for undervalued exploration companies. At least one Alaska exploration company was able to bolster its treasury by buying a fellow junior whose market cap was roughly 65 percent of the money it had in the bank.
If attacked by a bear, experts recommend playing dead until the predator loses interest and moves on. Many junior miners are employing a similar tactic to survive the current bear markets by conserving what little cash they have in the bank in hopes of surviving until the current financial environment improves.
Those with expertise in mining equities, however, are reluctant to predict how much longer these companies will have to endure the bear market.
“I would say we are within 20 or 30 percent of a bottom, and we are 500 percent away from a top,” according to Rule. “In terms of when this blessed time might occur, I have no earthly idea.”
Whether the long and treacherous bear market holds or bulls carry mining equities and mineral prices northward, North of 60 Mining News will be here to keep you informed on the mining and exploration companies discovering the future of Alaska and Canada’s North.
Thank you, and I hope you enjoy this seventh edition of Mining Explorers.
- Shane Lasley, publisher, North of 60 Mining News
