Junior Mine 2018: The new leaders

Battery metals and royalty streams define our analysis of the top five junior mining companies

New business models and new markets helped define the junior mining leaders in 2018. In past years, investors have favoured gold companies, but more recently, they have placed a premium on successful royalty and streaming businesses with limited operational risk and on firms that develop, invest in or produce metals used in battery technology.

This year marked the end of gold’s dominance among the top five junior mine companies as investors shifted their focus to lithium and cobalt. The trend is likely to continue as long as the two metals remain a key ingredient in battery technology. Demand for cobalt is forecasted to increase by 30% between 2016 and 2020, driven by the increased popularity of electric vehicles. That figure is expected to keep rising as the cost of electric-vehicle drivetrains becomes competitive with combustion engines within the next five to ten years.


Converting market opportunities into growth

The top five junior mine companies grew in value by an aggregate 32%, to CA$2.5 billion, up from CA$1.9 billion a year earlier. Cobalt 27 Capital Corp. jumped nine places to secure top spot, thanks to the rising price of cobalt and a successful CA$300 million equity financing round. In Junior Mine 2017, Cobalt 27 CEO Anthony Milewski outlined why his company offers investors safer exposure to the electric vehicle market than the pure-play nickel and copper companies that produce the metal as a by-product. Over the next 12 months, the market gave credence to his case, raising Cobalt 27’s market cap by 228.5%.

Novo Resources vaulted into second spot from No. 52 a year earlier, as its market cap soared 616.6%. The gold company raised CA$90 million in equity financing to further its exploration efforts in Western Australia.

Equinox Gold, which changed its name from Trek Mining Inc. in December 2017, moved up to third place from 13th a year earlier. Its Aurizona gold mine in Brazil is preparing to go online in early 2019, and its Castle Mountain gold mine in California is preparing to ramp up in 2020. Atlantic Gold was also rewarded by investors for starting commercial production at its Moose River Consolidated gold mine in Nova Scotia.

Movement in the top-five ranking included the graduation to the Toronto Stock Exchange of both Gold Standard Ventures Corp. and Leagold Mining Corp. Meanwhile, Integra Gold Corp. (formerly No. 2 among miners on the TSX-V) was acquired for CA$590 million in July 2017 by Eldorado Gold Corp., which is using the assets to strengthen its portfolio in Quebec.

Contact us

Kevin Chan

Kevin Chan

National Mining Leader, PwC Canada

Tel: +1 416 941 8321

Liam Fitzgerald

Liam Fitzgerald

Competency, Innovation & Legal Tax Leader, PwC Canada

Tel: +1 416 869 2601

Mark Patterson

Mark Patterson

BC Mining Leader, PwC Canada

Tel: +1 604 806 7160

Rebecca Chan

Rebecca Chan

Partner, Tax, PwC Canada

Tel: +1 416 365 8831

Maxime Guilbault

Maxime Guilbault

Quebec Mining Leader, PwC Canada

Tel: +1 514 205 5448

Lauren Bermack

Lauren Bermack

Director, Consulting & Deals, PwC Canada

Tel: +1 416 815 5323

Follow PwC Canada