Spot gold has enjoyed a bull market for the last few months amid rising inflation and recession fears, despite the recent pullback. The current downturn the commodity is experiencing could signal good news for miners, however, who often see a trickle-down effect, lagging a bull run in spot gold.
Mergers and acquisitions in the gold miner space are also often indicative of a bullish run in the sector and Newmont Corporation's NEM proposal to acquire 100% of the issued share capital of Newcrest Mining Limited, which was announced on Feb. 6, was a sign many gold bulls were looking for.
“Gold miner consolidations typically always precede bull runs. A lot of these indicators point into what could be a very exciting year for once in the mining space,” Managing Director of Canada-based trading and investing platform Ceo.ca Joshua Duggan told Benzinga in a recent interview.
Joshua Duggan On The Junior Mining Landscape
Junior miners “were very depressed last year and saw significant drops in their stocks --upwards of 80% to 90%, and now you have to think, with the bullish trend (that) they’re at a point now where they’ve hit their floor, and they’re back on the rebound,” said Duggan. “It’s an exciting time for the juniors for sure,” he added.
“The ones that are well cashed up, that have strategic plans, with great assets in friendly jurisdictions are going to do really well and they’re going to take advantage of this global economic crisis and capitalize.”
Ceo.ca is a Canada-based mobile investment conference, where users can discuss stocks and track their performance in real-time. Executives and insiders of some companies, who are asked to disclose their relationships with the stocks, also join the platform to talk business with shareholders.
The platform, known as “the largest junior resource and venture investment community,” said Duggan, has grown its user base exponentially. “We have 11 million lifetime users, we get a few million new monthly users a year. We’ve never seen such growth as we do now. We’re up about 129% year-over-year –growth in members –that started during the pandemic and it’s just continued to springboard.”
Ceo.ca “was founded in the community venture space, so the small-cap space, and it evolved to become reflective of the total aggregate position of the venture market, which is heavily weighted in the junior resource space.” As the platform, owned by EarthLabs, Inc SPOFF, continues to grow, it’s expanding the platform, by adding 50,000 new channels to cover stocks trading on the NYSE, Nasdaq, OTC, London-based LSE and the Australian ASX.
A lot of that growth is coming from the younger generations, according to Duggan. “The younger users are coming in, irrelevant of our nostalgic look, because the generalists are starting to talk about this market now for the first time.” Duggan believes AMC Entertainment Holdings, Inc’s AMC stake in gold and silver miner Hycroft Mining Holding Corporation HYMC may have spurred new interest from Gen Z and Millennial investors.
“I look back to the AMC investment in Hycroft, which I’ve really seen as the kick-off in the generalist space into the mining market,” Duggan said, adding that younger users are “starting to understand that (junior mining) might be a place to invest in for the first time.”
“It’s been exciting to see a little bit of youthfulness come back into the market,” Duggan said. And In terms of junior mining stocks in particular, he added, “we haven’t traditionally seen the younger crowd coming into them, but now we are.” An influx of younger investors are joining debates on the platform to discuss and share ideas about popular mining stocks such as Patriot Battery Metals, Inc PMETF, he said.
But it isn’t just mining stocks gaining attention at Ceo.ca. “With the explosion of ChatGPT we’re seeing this huge focus on AI stocks now primarily in the States, but there’s some Canadian transition as well and that’s the new hot thing right now. That’s been the hottest increase next to mining,” he added.
Joshua Duggan On The 2022 Bear Market And Looking Forward Into The Next Bull Run
Many junior and mid-cap stocks, like their larger counterparts, took a massive hit during the 2022 bear market. "Gold prices were depressed in the bear market, juniors got hit really hard, inflation hit them harder than most because obviously their costs are rising significantly. So, there was an inverse correlation between the price of gold and the price of mining stocks –both majors and juniors –just because of those rising inflationary costs." Duggan said.
"Everything from drilling costs to mining equipment to geologist costs –those were rising in this inflationary environment, so that’s been a bit of a damper," he added.
“Now we’re moving into the bull market. It’s really interesting, I was just at VRIC (Vancouver Resource Investment Conference) in Vancouver and Ross Beaty, a mining legend, he (came) out saying just about every single metal on the periodic table is in a bullish trend right now, and I totally agree,” Duggan noted.
"You have the lithium rush, which is incredible. You have Elon Musk saying Tesla may have to get into the mining business because costs are so insane –they locked in that deal with Piedmont Lithium, Ford locked in their deal with Liontown resources for about $300-million AUD, about $200 million USD, for a loan there in Australia, General Motors just put $650 million into Lithium Americas. That property alone can support production of about 1 million EVs per year." he pointed out. "So you have all these major-caps jumping into the mining space, securing their distribution, which I think for the first time people are starting to understand is so important."
"Then you have gold, obviously, which has been on a bit of a tear recently. It’s really hard not to recognize the potential for a bullish trend. You have Russia and Iran planning a gold-backed stable coin, U.A.E and India looking at trading in rupees, same with China. There’s rising threats to the dollar’s dominance in global trade." Duggan said.
Joshua Duggan On The Value Of The Ceo.ca Platform
“Ceo.ca has been the town-square of mining forever. You can’t get that level of feedback anywhere else. Just knowing what the crowd has to say is important for shaping your thesis,” Duggan said.
The platform brings in about 60% of its traffic from Canada and the remaining 40% from the U.S., Europe and Australia and is seeing “larger increases in Americans coming to the site to invest in Canadian primary listed junior resource equities,” he said.
“It’s kinda that unbiased spot where people can go and actually see in real-time how people are feeling and that’s so important in small caps relative to large caps. You don’t need to go read a board about some gigantic five-billion-dollar pharma company –it’s irrelevant what people really think –but in the small-cap world everyone’s thoughts contribute to and correlate to the stock price, so it’s just so important to keep your finger on the tab there,” he said.
The platform boasts live commodity tickers, enhanced chat features, research dashboards for company filings, technical charts and a community article program where “everyone from analysts to students to retirees to institutional fund manager who share ideas and write articles on Ceo.”
Ceo is “coming up with really unique things to educate users about the various sectors in the market, show them that there is a fun side and enhance tools and resources for people who are trying to do due diligence on stocks for the first time to take their analysis to the next level,” Duggan said.
“When a press release comes out people want to go immediately chat about what they’re seeing,” Duggan said. “In junior mining you don’t have to be a geologist to understand, but the language is very complex and not as simple as cannabis or tech. When they’re putting out drill holes and they’re putting out complex programs and analysis and looking at IP surveys and other things it gets quite complicated for people, on face, and a little bit scary if you’re coming in for the first time. But, getting that Google review mentality of coming to the page and seeing other experts or other people who are more familiar, that’s where I think the value of Ceo is.”
"Younger is cool, the connection is cool but it’s the transparency that’s really important to us," Duggan said.
"We get all the company filings so if a company tries to sneak a press release on Friday night, and they just file it on PR (Cision PR Newswire) in Canada, or in the U.S. and don’t put it through the proper channels, it still comes real-time to the (Ceo.ca) channel when they put it out. There’s no hiding from investors anymore. That strategy’s out the window and trust me with small caps that’s been a historical strategy."
Although the platform offers paid subscriptions for advanced features, such as Level 2 (where traders can see real-time bid and ask information) many features are free to use and the discussions are free to read. “We want to make sure we keep it as free and open as possible and make it an open space to learn about the mining space,” Duggan said.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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