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Is your investment still killing the gold industry? Kai Hoffmann talks funding, sentiment

Kitco News

The junior mining sector has attracted more capital inflows between May and August than all of last year combined.

Kai Hoffmann, CEO of SOAR Financial Group, sees this is a sign of renewed optimism in the space.

“Obviously the gold price explosion [caused this] but in general, the return of the brokers and the bankers to the space, they’re driving it, they’re behind it. We’ve seen $2.6 billion raised since early May until now,” Hoffmann told Kitco News on the sidelines of the Mines and Money Online Connect conference.

The Oreninc Index tracks the state of financing in the gold mining sector. Hoffmann said that he only looked at companies with a market capitalization under $1.5 billion and financings below $100 million, so the true amount of capital raised is likely much higher than $2.6 billion.

Earlier in the year, inflows into exchange-traded funds (ETFs) instead of the junior miners themselves were “killing” the junior mining sector, Hoffmann noted, but sentiment has improved dramatically since then.

“Sentiment has completely changed. The attitude towards gold and junior mining is different as well, and that’s sort of the theme that has changed over the last six months to eight months,” he said.

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.