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Money is finally flowing into junior explorers, but the market still has a long way to go

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(Kitco News) - The financial drought for junior explorers has ended as money is flowing back into the sector, according to Kitco commentator and founder of, David Erfle.

Erfle sat down for a podcast on Friday with mining reporters Neils Christensen and Paul Harris and talked about themes he is watching in the marketplace.

Erfle said that so far this year, the junior mining sector has raised about $1.5 billion in capital, more than double compared to this time last year.

“I think, Q2 2020 was the strongest quarter of equity raises by juniors since Q1 of 2012,” he said.

While money is starting to flow again, Erfle said that the market is still miles away from the exuberance stage, which traditionally signals a top in the market.

“Gold shares have actually been in a bear market since 1996,” he said. “It's really incredible to believe that even though the gold price, from 2000 to 2011, went from $250 to over $1,900, miners, in relation to the price of gold, have been in a bear market through that,” he said. “So we are nowhere near the manic phase.”

David added that in the current environment with central banks printing trillion of dollars, gold appears to be in a long-term bull market and that will continue to drive the junior mining sector.

“I've never seen a more bullish environment here for the precious metals,” he said.

So, the best advice Erfle has for investors seeing this bull market: hold on.

“I've learned a lot from previous bull markets, but the main thing you want to do is, not try to trade in and out,” he said. “Do you take profits along the way? Absolutely, but maintain core positions in well-researched juniors. This market is not going to trade like it's been trading for the past eight years.”

To end this week, we wanted to highlight a new initiative launched by B2Gold as it raises money to protect black rhinos in Namibian. The COVID-19 pandemic has impacted the government’s tourism, which has hurt its ability to protect these endangered animals.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.