Mining 2024 A Year in Review. Could 2025 be Golden for Miners?

On paper 2024 should have been a big year for the mining sector, with the gold price ending the year up 27%, silver up 25%, zinc up 11% and copper up 4% (Figure 1).

Figure 1: Performance of Metals in 2024

 

 

Source: Data Collected by MMRC

These rises in precious metal and base metal prices should have spurred investors into mining equities, especially at a time when we stand on the precipice of the next commodity Supercycle driven by the energy transition.

But that did not happen, instead, we saw share prices fall, BHP, Rio Tinto and Glencore, some of the world’s largest mining companies, all experienced a dramatic decline in their share prices, 22.2% on average (Figure 2).

Figure 2: Share Price Performance of Major Miners in 2024

 

 

Source: Data Collected by MMRC

Junior Miners followed the Majors Trajectory

The TSX Venture Exchange (TSX-V) has emerged as a hub for junior mining firms, with approximately 40% of the world’s public mining companies being listed on either the Toronto Stock Exchange or the TSX-V. Indeed, it is not just the majors that experienced a decrease in their market value. At the end of 2023, the 926 junior mining companies listed on the TSX-V had a total market capitalisation of C$39.7 billion. By the end of December 2024, the total market capitalisation of the 913 miners remaining listed was reduced by C$2.40 billion, or 6.0%, to C$37.3 billion (Figure 3).

This is set against a backdrop of a strong performance by the TSX-V which saw the market increase in value by C$17.91 billion, or 25.3%, reaching C$88.8 billion at the end of December 2024, compared to December 2023 (Figure 3). So, the negative investor sentiment during 2024 was focused towards the mining sector and not the wider market.

Figure 3: Market Value Performance of TSX-V Miners in 2024

 

Source: Data Collected by MMRC

The negative investor outlook towards the mining sector affected all size ranges of companies. At the end of December 2024, the market value of the 10 largest mining companies on the TSX-V reduced by C$1.9 billion or 14.1%, to C$11.5 billion when compared to the end of 2023 (Figure 3). At the microcap end, the smallest 500 mining companies listed on the TSX-V, those broadly under C$10 million market cap, had a collective market value reduced by C$90 million, or 5.3%, to C$1.76 billion at the end of December 2024 compared to December 2023.

Potential Explanations of Poor Mining Market Conditions

Geopolitical tensions, the positive trajectory of cryptocurrencies, and strong operational results from the technology and financial services sectors, up a combined C$19.3 billion, left the mining sector with very little attention to grab and it was the worst-performing sector of the year losing a total market value of C$2.4 billion (Figure 4).

 

Figure 4: Change in Market Value of TSX-V Sectors Dec 2023 to Dec 2024

 

Source: Data Collected by MMRC

For junior exploration and mining companies, 2024 was even bleaker than 2023, with many juniors struggling to raise funds despite the high metal prices, this inability to raise money compounded problems for already struggling juniors.

Juniors with weak balance sheets were unable to complete any meaningful exploration of their projects, leaving investors frustrated with the lack of progress. This in turn put further pressure on their share prices resulting in their continued weakening through the year.

2025 to be Golden for Miners?

Geopolitical tensions are expected to continue to climb in 2025, with the ongoing Russia-Ukraine War, and continued conflict in Gaza, which is now in danger of spilling over into neighbouring states. Added to this, are uncertainties from commodities protectionism and disruptions to supply chains, with China banning the exports of critical minerals gallium, germanium and antimony to the United States and the US threatening to impose tariffs, all of which could lead to further US inflation. Central banks, including China, are continuing to increase their gold holding and the concerns around the debt sustainability of the US remain very valid.

This range of economic and political issues will be positive for precious metals, potentially driving them to new record highs. The vast majority of bulge-bracket investment banks are forecasting a gold price above its current level (Figure 5), with many suggesting a gold price of around US$3,000 could be achieved.

Figure 5: Gold Price Forecasts

Source: Data Collected by MMRC

At these forecast price levels, gold miners would be making huge margins and achieving record profit levels.

Cashed-up gold miners would bode well for junior companies with new gold-silver discoveries, or those juniors with established resource bases, as larger cash-rich gold miners, look for opportunities to increase production levels and reserve bases.

The market values of junior gold explorers remain low for now, but as cashed-up gold miners drive a significant uptick in M&A activity during 2025, we could see a spark that sets the mining sector alight.

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