Mining is notoriously cyclical. But if ever there was an industry that blows desert hot and arctic cold, it is the subsector of small-cap and early-stage companies known as junior miners. And boy has it been blowing cold. Many of the old hands are saying this is the worst bear market they have ever known, worse than between 2013 and 2015, when junior mining had a near-death experience following the boom of the 2000s; worse than the bear market of the 1990s that came with hugely depressed metals prices at the end of a 20-year commodities downturn, followed by the Bre-X scandal.
Bre-X was one of the scams of the century. The Canadian gold-mining company falsified gold samples from its mine in the middle of nowhere in Indonesia. The stock went up more than 1,000-fold, from pennies to a C$6bn (£3.5m) valuation before the fraud was exposed. The sector went into a prolonged depression, starving it of capital. The story became the basis for the film Gold, starring Matthew McConaughey.
Mining needs capital. It typically takes more than 15 years to take a mine from discovery
