Joe Mazumdar, editor of Exploration Insights, gave his latest thoughts on trends in the junior resource sector, as well as his outlook for specific commodities, including gold, nickel and lithium.
Looking first at gold, he said he thinks with the price at historic highs it’s a good time to review the market.
‘Find those quality plays and start accumulating, because the gold price is there,’ he said, noting that strong central bank buying has provided support for the yellow metal in the face of high interest rates.
In the nickel industry, major miners are under pressure as Indonesia floods the market with material. They are finding that although they produce ‘greener’ products, end users aren’t yet ready to pay that premium.
‘The problem that I’m seeing with a lot of nickel outside is it’s very difficult to build,’ Mazumdar said. ‘The projects that we have in Canada are huge, low grade — we’re talking $2 billion, $3 billion for some of these. And who’s going to fund it? You might get funding from the Canadian government … but that little bit of equity doesn’t exist. And until the US or some of these other guys come and say, ‘We’ll help you build it,’ I don’t know how these projects get built.’
Lithium is also in a tough position right now, and Mazumdar said a risk in that arena is technology — for example, direct lithium extraction, which could put pressure on spodumene, and newer non-lithium battery technologies.
‘The big deal for me in this critical minerals thing is that technology’s not constant,’ he said. ‘If people have a risk in terms of a mineral commodity … they’ll look for a way to put it outside the product if they can’t secure the supply chain.’
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
