Toronto junior miners continue impressive growth

As we enter PDAC week, we find that last year was another very impressive one for Canada’s junior mining industry on the TSX Venture Exchange. According to the second annual PricewaterhouseCoopers (PwC) report on Canada’s junior mining sector Review of trends in the TSX-V mining industry while the market cap for the entire TSX-V increased a solid 14%, the mining sector surged 45% and the top 100 mining companies saw their market caps rise 37%.The PwC survey examines the top 100 mining companies on the TSX-V based on market capitalisation as at June 30, 2007. Paul Murphy, PwC partner and Canadian Mining Practice leader, noted “The mining sector led the exchange in more than growth – it also had presence. Of the more than 2,000 companies listed on the TSX-V, 47% were mining companies.”

C$3 billion was generated through share issues in 2007 as investors saw potential in exploration and development. Total assets for the top 100 rose to C$6.6 billion in 2007 from C$4.1 billion in the previous year. Revenue jumped 81% in 2007 to more than C$471 million. “Part of the increase can be attributed to the rise in the number of producing companies, up four to 17, from the year before,” said Murphy.

Commodity prices continued to play a significant role in growth with prices remaining strong. Emerging markets like China and India helped fuel demand for steel, copper and gold while plans for more nuclear reactors added to the demand for uranium.

Investor interest in higher-risk junior companies was strong in 2007 and evident in the growing market caps on the TSX-V. Companies in the top 100 with market caps above C$200 million more than doubled to 29 in 2007 from 14 companies in 2006. Those that made the top five had their market caps ranged from C$558 million to C$1.15 billion in 2007, compared with a range of C$475 million to C$1.23 million a year earlier.

The top five companies in 2007 by market capitalisation were:

    Northern Dynasty Minerals (C$1.15 billion)
    Seabridge Gold (C$764 million)
    Osisko Exploration (C$714 million)
    Nautilus Minerals (C$577 million)
    Palmarejo Silver and Gold Corp (C$558 million)