While market capitalization is up 62% this year for the Toronto Venture Exchange’s top 100 junior miners, volatility has become the new norm in the sector, according to a report released today by PwC.
Junior Mine found that the value of those top 100 companies grew to $20.6 billion in the 12 months ending June 30, up from $12.7 billion the year prior.
But it also noted that volatility in the sector appears to be permanent. The report found since June 30, the total market cap for the top five companies has dropped 38%. The report noted that in the past month alone, the TSX-V rose or fell 1% in the same day more than 60% of the time.
“Market volatility is not just a fleeting trend,” John Gravelle, PwC’s Canadian mining leader, said in a news release.
“It is the new business as usual for juniors and more intense than ever. “Stability is prevented by fluctuations in currency, the current pace and reliability of earnings growth, aggravated political environments and sovereign debt issues across the globe.”
Gravelle advised junior miners to stay focused on the long term.
“Knee-jerk reactions could negatively impact their growth,” he said.
PwC did not respond to an interview request by press deadline.
Jenny Wagler
@JennyWagler_BIV