Mining equities lag metals rally as tech crowding, war risk weigh on juniors | John Feneck

• Gold holds $3,800-$3,900 range, silver near $54-$55, and copper near record highs, but mining equities have not attracted corresponding investor interest as capital flows to technology and AI sectors instead
• U.S. defense supply-chain order on July 20 set Jan. 1, 2027 deadline affecting tungsten imports from China, Russia, North Korea and Iran, which Feneck calls 'super bullish' given China produces 80-81% of global tungsten while U.S. has produced none since 2015
• Feneck argues depressed junior valuations create M&A opportunities but insists on 50%+ premiums in bull market conditions, citing recent deals like NovaGold's Donlin Gold acquisition and Barrick's 9.9% stake in Kingfisher Metals

Summary

Mining equities are significantly underperforming despite strong metals prices, according to John Feneck, CEO of The Feneck Commodities Report. While copper holds the $3,800-$3,900 range, nickel trades at $54-$55, and gold near record highs, mining stocks have lagged considerably.

Key Performance Metrics:

• The HUI gold mining index has declined approximately 40% since March 1
• Junior mining stocks are down 35% to 65% during the same period
• Major producers like Newmont have reported strong earnings with elevated margins

Market Pressures:

Capital is flowing into technology and AI stocks rather than mining equities. Additional headwinds include the Iran conflict (a "huge overhang" since early March), Federal Reserve uncertainty, and low summer trading volumes. However, Feneck maintains the sector remains in a "bull framework" with charts "not broken," presenting a potential buying opportunity.

Critical Minerals Development:

A July 20 U.S. defense supply-chain order targeting tungsten imports from China, Russia, North Korea, and Iran takes effect January 1, 2027. Feneck calls this "super bullish" for tungsten, noting China produces 80-81% of global supply while U.S. domestic production ceased in 2015.

M&A Activity:

Recent deals include NovaGold acquiring Paulson Advisers' 40% Donlin Gold stake and Barrick investing C$20.9 million for 9.9% of Kingfisher Metals. Feneck urges juniors to demand 50%+ premiums rather than accepting low-ball offers during depressed valuations.

Outlook:

Potential catalysts include capital rotation from weakening tech sectors, easing geopolitical tensions, and increased M&A activity as majors seek assets while junior valuations remain compressed.