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2020 mining and exploration trading volumes and values: Is the best is yet to come?

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Freshly published data shows that during 2020 the total value of shares traded in mining and exploration companies on the TSX, TSX-V, LSE and AIM increased by an impressive 67% compared to the previous year, despite a global pandemic, which affected the stability of markets all over the globe.

While this eye-catching increase in sentiment towards the mining sector has led to a substantial year-on-year rise, the total trading volume value for the mining sector in 2020, of £357bn, remains 44% below its 2008 bull market peak of c. £636bn, which may indicate that there is much more activity in the sector to come in 2021.

Of the two markets, total trading volume values for mining and exploration companies were up most on the LSE & AIM, 262% compared to 2019, while the improvement on the TSX & TSX-V was much more gradual, only up 49% (Figure 1), perhaps suggesting that out of the two markets the TSX & TSX-V could see the biggest resurgence in total trading volume values for mining and exploration companies in 2021.

Trading volumes for mining companies

Figure 1: Total trading volume values for mining and exploration companies, LSE & AIM compared to the TSX & TSX-V

Source: Metals and Mining Research Corporation.

Focusing on the junior end of the market (AIM & TSX-V), total trading volume values for mining and exploration companies in 2020 were up 251% compared to 2019, totalling around £14.9bn worth of transactions. This remains 38% off the 2011 peak of £24bn of trading values on the junior markets, so the potential still remains for a bumper year during 2021 at the junior end of the market.

During 2020 AIM experienced the biggest increase in relative trading volume values for mining and exploration companies, increasing by 449%, while the TSX-V increased by 152% compared to 2019 (Figure 2). Of the two junior markets, the TSX-V remains the furthest from its 2011 high, with 2020’s trading volume values for mining and exploration companies 52% below what they were in 2011.

Trading volumes: AIm compared to the TSX-V

Figure 2: Total trading volume values for mining and exploration companies, AIM compared to the TSX-V

Source: Metals and Mining Research Corporation.

Interestingly, the data from this article is supported by that from another recent article of ours that looked at the amount of equity capital raised by mining and exploration companies in 2020, compared to previous years. That article, which can be read here, concluded that 2020 was not a bull-market for the mining sector, but rather just a minor recovery from what was the worst period (2019) for equity funding in the mining sector for the past 17-years.

2021 holds much promise for the mining and exploration sector, with analysts bullish on precious and base metal prices, potentially combining with miners and explorers receiving greater levels of investor interest and being able to access increased amounts of equity finance.

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