On Tuesday morning, Chris Haldane, of Marathon Gold Corp., was looking at the price of gold and looking at his stock price: Gold had climbed US$17 per ounce, but the company stock was barely moving.
“It just seems like the junior gold space has gone into a pause mode,” said Haldane, who handles investor relations for Marathon, and had just issued a press release touting positive drill results for its prospective gold camp in Newfoundland.
The likely culprit: cannabis, bitcoin and the many cryptocurrencies out there. Although no one could point to any formal studies, there was wide consensus on the trade show floor at the Prospectors and Developers’ Association Conference in downtown Toronto this week, that junior mining gold companies have lost some of their mojo this cycle as a result of the flood of speculative capital that’s pouring into cannabis and cryptocurrency stocks.
Nonetheless, gold has consistently traded above US$1,300 an ounce in 2018, a feat that never took hold in 2017, and yet many junior gold producers are still waiting for a bounce in their stock price.
Haldane said one of the most bothersome aspects of the situation is that no one — not the investors, not the companies — even understands how cryptocurrencies work.