Did we hear a tap opening?

It’s not like the Summer of Love in 1996 all over again (at least we hope it’s not), but the season has served us with a tray-full of financings for the junior exploration companies and small producers.

From a few hundred thousand kicked into a junior company to the tens of millions that have gone toward project financings by small, new, or aspiring producers, money has started to appear.

More than that, there are a couple of interesting trends. Two and three years ago, much of the money that a small exploration or development company could raise would have been done so through private placements, made by serious investors committed to the sector. Now the retail investor seems to be back, if only in a modest way.

The other trend is the return — again in a modest way — of the investment houses, and notably the big banks. It seems that after chasing big money in other disappointing sectors of the economy, and leaving mining with snarky comments about poor returns, the banks may have decided that hard commodities are not such a basket-case after all.

And while there were independent houses that stuck it out in the resource industry’s lean years (shops like Haywood and Canaccord, and more recently Northern and Jennings), the return of many other independents is a sign that the whole financial community is taking notice of mining again.

It’s not at the point where money now chases projects instead of the other way around, and that is good: cheap capital destroys capital, and that’s the last thing this industry needs. But it is certainly nice to know there is a reasonably sized pool of investment money out there.

Finding mineral deposits costs, and in the absence of reliable financing, there was no way the industry could make the kinds of discoveries that keep the investors coming. Especially now — having been burned successively by the junior explorers, the dot-coms, and the big-money acquisitors in the telecommunications industry — investors tend to like sectors that get results.

Perhaps a little liquidity sent in the general direction of some good drill targets could make a few retail investors rich, and in the process wash off some of the mud that has stuck to junior exploration since its collapse in the late 1990s. When investors see money being used seriously and to good effect, the mineral exploration business will recover a lot of credibility.

A kinder atmosphere for mineral explorers and miners didn’t come out of nowhere. Surely at its heart is the improved gold price, which has the financial world talking about gold for the first time in years.

But a better gold price doesn’t explain how base metal explorers have been able to raise money too. Nickel, of course, is in one of its periodic upward spikes, driven by the Inco strike and potential shortages. But zinc is hurting, and copper, while it has moved up, is not booming.

As an aside, there’s an instructive comparison to be made between the effect of the Sudbury strike on the nickel price and the brief Escondida walkout on the copper price. The lesson we might draw is that nickel is still a far more volatile market, and that nickel producers stand to gain much more from short-term supply crunches. Copper, on the other hand, suffers from the ability other producers have of ramping up production, even marginally, to take the place of an operation that’s temporarily shut down.

It follows that junior companies with nickel assets have much more ability to make their mark in a tight supply situation than do those with copper assets. There are still few enough nickel producers that shortages occur, and that’s when suitably nimble small operators can find a market for their concentrate. Exhibit A in that category is the joint venture between FNX Mining and Dynatec, whose properties — all Inco castoffs — look much better when viewed from below by an ambitious junior.

We’ve banged on about this before — the “scale trap,” in the pithy phrase of BHP Billiton’s Alan Carter. A great many mineral deposits are thought to be too small to make an impact on a large, diversified mining house — at least until the smelter starts wondering where its next truckload of concentrate is coming from. But they’re economic to mine, when they find a company that fits.

And if we are at the point where everything must be an Antamina to interest the biggest players, then all the fun is going to be in the junior and middle tiers of the industry.

Certainly investors and investment houses are seeing how little fun is to be had in the rest of the stock market. And enough of them are talking now about the rebirth of hard assets as an attractive investment choice.

Maybe the money we’ve seen sloshing around this summer just wants to have fun.