Cash-starved junior miners poised for next leg of gold equity rally - Crescat’s Kevin Smith

Crescat Capital’s Kevin Smith says the next leg of the gold equity rally is likely to broaden from seniors/royalties into cash-starved junior explorers, arguing the segment is still early-cycle despite strong performance since 2025. He cites a decade-plus of underinvestment in exploration as creating structural supply tightness and “big fundamental supply and demand imbalances,” setting up disproportionate upside if risk capital returns. Smith notes the rally has been uneven: VanEck Gold Miners ETF (GDX) is up >200% since the start of 2025 versus +85% for Canada’s TSX Venture Index, leaving juniors lagging seniors even as bullion/miner sentiment improves. Speaking from PDAC 2026, he described a noticeably stronger conference “vibe” (crowds/attendance), but said many allocators remain cautious and want evidence that higher gold prices are durable after volatility. Crescat is still actively buying, viewing pullbacks/consolidation as healthy opportunities to accumulate. From a supply/demand standpoint, Smith emphasizes the scarcity of major new discoveries—attributed to chronic exploration underfunding—as a bullish medium-term setup: producers may increasingly compete for new resources, potentially lifting sector valuations. Near-term catalysts he flags are a stabilization/consolidation phase in gold to rebuild institutional confidence, plus a broader asset-allocation shift (“great rotation”) out of mega-cap tech and into commodities/hard assets—an impulse that typically benefits higher-beta juniors most, but also raises drawdown risk if equity risk appetite fades. Key risk: junior exploration remains binary and geology-driven; Smith stresses the need for Tier-1 scale targets, mineable jurisdictions, and strong capital structures/management—implying selection matters more than broad-beta exposure at this stage.