Junior Mine 2011: Volatility, the new “business as usual”

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A review and analysis of the top 100 mining companies on the TSXV

We believe high market volatility is the new “business as usual.” Daily swings of one percent on the TSXV and one hundred points on the TSX are no longer anomalies, leading people to believe the worst; instead, the market is moving in waves of extreme highs and lows.

Junior Mine 2011 reviews the top 100 mining companies listed on the TSXV, as of June 30, 2011. At June 30, the TSXV mining sector market capitalization, compared to 2010, increased by 72% to $64.9 billion. However, when compared to activity after June 30, 2011, the collective market capitalization of these same companies dipped to as low as $13.45 billion and peaked as high as $22.80 billion.

Why do we believe market volatility has become business as usual versus a fleeting trend? Until the underlying factors driving market volatility are addressed, we do not expect stability to wash over the markets. Key drivers of volatility include:

• Currency swings
• Pace and reliability of earnings growth
• Caustic political environments and
• Sovereign debt and deficit issues across the globe

Where does this leave junior mines? Are they at the stage where they should be worried?

In Junior Mine 2011 the story appears very positive for mining companies. However, this success has to be interpreted with the understanding that only weeks after June 30, the market changed and began to ride the wave of extreme volatility. This volatility means that junior mining companies need to maintain their focus on the long-term for junior mining. Knee-jerk reactions to the market will result in decisions that will negatively impact the growth strategy of junior mining companies in the long run.

Realizing the game has changed will help mining executives put into place the proper measures and strategies that will propel long-term growth for their company. Download the full PDF above to learn more.

Previous editions

Junior mine: Trends in the TSX-V2010 (October 2010) (1.1 MB) Download the full PDF article.

Junior Mine: Trends in Junior Mining - 2009 (February 2010) (953 KB) Download the full PDF article.

Junior Mine: Review of trends in the TSX-V mining industry (2009) (973 KB) Download the full PDF article.

Junior Mine: Review of trends in the TSX-V mining industry (2008) (1.1 MB) Download the full PDF article.

Junior Mine: Review of trends in the TSX-V mining industry (2007) (1.8 MB) Download the full PDF article.