Dave Erfle – A Constructive Outlook On Precious Metals And Select Mining Stocks In 2022
Dave Erfle, Founder and Editor of the Junior Miner Junky, joins us to assess where the precious metals and mining stocks were priced coming out of 2021, and what trends may develop moving into 2022. We discuss again the severity of the recent tax loss selling season in the mining stocks, and the potential for a sector bounce over the next month or two to start of the year. However we also review the potential for another sell down before the Fed rate hiking cycle actually gets started. We also note, the disconnect in where the mining stock valuations are in relation to the fairly buoyant underlying metals prices, and the accumulation opportunity this may present.
Next we reviewed the group of newly minted companies and that have continued to trend lower since later 2020 and having continued to sell off and drift lower after their listings and IPOs. Then we pivoted over to the more advanced exploration and development companies and why they are not getting the kinds of valuations we’ve seen in the past for their 1-2 million ounce deposits. This brought focus to the recent increase in mergers and acquisitions, a trend that Dave sees continuing. This may get more investors speculating as to which transactions will come next, and get more capital rotating within the sector.
We also give consideration to whether generalist investors, who are overwhelmingly taking passive investing strategies in today’s markets, have shifted their focus more to ETFs rather than individual stock picking, and if this may changed future trends in mining stock interest. Dave wraps us up with why he is much more attracted to high margin exploration/development projects in safe jurisdictions than he is to higher risk drill plays without resources or optionality projects that need higher metals prices.