Undervaluation remains a persistent issue for mining companies, particularly juniors, compared to other sectors like technology and biotech, SCP Resource Finance chairman Peter Grosskopf said in an interview this month.
Grosskopf expects stock market values to improve through strong performance and industry consolidation.
“The price of junior gold producers is exceptionally low against the gold price. There’s been a really massive underperformance,” he said during the Rule Symposium in Boca Raton, Fla.
He also says the mining industry is scrambling to catch up after decades of underinvestment. Major mining companies seek new production sources and to build reserves to address this investment gap.
However, junior mining companies, which the majors often rely on to replace depleting reserves, face significant challenges in raising capital. Grosskopf pointed out that many traditional gold funds have diminished, leading to a hollowing out of investment in the junior sector. This makes it difficult for smaller companies to secure the necessary funding.
Watch the full interview with The Northern Miner’s western editor, Henry Lazenby, below.
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