A major bull market is just starting, according to one mining CEO
The economic impact of the COVID-19 pandemic, with blowout deficits and massive money printing, will create the perfect storm for precious metals and will launch a massive bull market for mining equities, according to one junior exploration executives.
In an interview with Kitco News during the Mines and Money online connect virtual mining conference, Ivan Bebek, executive chairman of Auryn Resources said that the rally in exploration companies seen since the March lows is just the start of what he expects will be a long-term uptrend for the sector.
“If you're not long this business right now, and you should make a point of learning quickly and starting to get some positions, we are in the very early innings of one of the biggest bull markets that we'll see in the last 30 or 40 years,” he said.
The TSX-Venture Index, which is heavily weighted with junior exploration companies, saw a sharp selloff in mid-March due to increased volatility as a result of the COVID-19 pandmic, since that low the index has rallied 64%.
“I think the 64% is more of a recovery, not a rally that we've seen so far,” said Bebek. “I think the rally is about to come here in the coming two to three years...This is not a short term rally. This is something that's going to have legs.”
Looking at the state of the mining sector as COVD-19 lockdown measures start to ease, Bebek said that he sees a healthy sector. He added that the higher gold prices is helping to attract generalist investors back into the market and is making it easier for companies to raise money.
“If you look at a handful of companies and their share price performances, including ours, everyone's gone up between 30 and a few hundred percent. And I think that's the first sign of money coming in,” he said. “I’d like to think it's 10 times easier to raise money today than it was six months ago. And I think every mining executive would agree with me.”
As for the rest of the year for Auryn, Bebek said that it’s going to be very busy as the company starts to develop a plan for its key assets in Canada and Peru. He explained that the company is looking at maybe spinning out three projects to further add value for company shareholders.
“I think that's a decision we're going to really push and the next few months, so hopefully, and the best case scenario, we can deliver three different shares to shareholders: a pure gold share in Canada, a big silver swing in Peru, as well as a big copper gold district,” he said. “If we can deliver these three things to investors by year end. I think we would have started this bull market running properly with some great, great opportunities to make those legendary returns.”