The Bottom Is In For Gold Miners - Revival Gold CEO

(Kitco News) - The dearth of investment capital flowing into the junior exploration space is taking its toll on sentiment among industry executives, but one mining CEO said that this could the bottom signal everyone is waiting for.

Hugh Agro, president and CEO of Revival Gold, said in a recent interview with Kitco News that for him, negative sentiment among industry officials is as high as it was back in the late 1990s.

"I have seen a number of CEOs throw in the towel," he said. "This environment is shaking out all the weak players, but I think the industry will be stronger in the long-term."

However, he added that industry players and investors have to remember that mining is a cyclical industry and he thinks it is only a matter of time before interest and capital returns to the sector.

The junior mining sector is already starting to see the slow return of fresh investment as gold prices trade near a one-year high. The Vaneck Vectors Junior Gold Miners ETF (NYSE: GDXJ) has pushed to its highest level since early-April, last trading at $31.90 a share, up more than 1% on the day.

However, looking past the price of gold, Agro said that the most significant factor that will drive renewed interest back to junior miners is the growing supply gap among the larger producers.

"You have to keep your eye on the long-term landscape," he said. "The fact is that no new growth projects are being developed within the gold industry."

Because of the current market environment, Agro added that the junior mining sector offers the best value for investors.

"A focused management team can generate real value from their assets in a way that a large producer with their systems, processes and G&A burdens can't," he said. "There is a lot of value hidden in some of these projects and it's up to the management teams to find that value and not just concede in a tough market environment."

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