For over a decade, the mining sector has had lackluster price performance, but this situation has now seen a significant turnaround. Particularly at the Prospectors and Developers Association of Canada (PDAC) 2026 conference, the overall sentiment among attendees suggests that a new bull market cycle in the mining sector is just beginning.

Mining ETFs rebounded strongly, far exceeding the gains in gold itself.

Over the past 12 months, the VanEck Gold Mining ETF (NYSE: GDX) has risen by more than 160% and is currently trading at approximately $106.22.

After years of stagnation, precious metals mining stocks have significantly outperformed the gold market itself, which has risen by approximately 98% over the same period, with gold currently trading around $5,180 per ounce. This data reflects the significant leverage effect of mining equity assets against the backdrop of continuously rising gold prices, attracting substantial capital attention.

The market still has significant upside potential and has not yet entered a frenzied phase.

Despite a new wave of capital inflows into the mining sector, Kai Hoffmann, CEO of Soar Financial, points out that the market still has ample upside potential because the extreme euphoria that accompanies traditional bull market peaks has yet to materialize.

Although the world’s largest mining ETF is nearing its all-time high, Hoffman believes that this momentum is primarily driven by the direct rise in metal prices, rather than a fundamental shift in investor psychology.

He stated at the conference, "This market is price-driven, not sentiment-driven. We are indeed seeing more money entering this space, but the overall narrative has not really changed."

Fund inflows remain primarily driven by specific groups; a full-scale shift by institutional investors has not yet occurred.

Hoffman observed that while the mining sector is attracting new funds, particularly from diversified investors, a large-scale reallocation from other asset classes to mining has not yet truly begun. Many investors remain highly focused on technology and AI-related stocks rather than making a significant shift towards mining equities.

He emphasized, "The discussion I'm hearing isn't about investors pulling money out of AI or other sectors and flooding into mining. Yes, we're attracting more attention, but we haven't reached the point where investors feel they have to reallocate to mining."

He believes a clearer signal will be the full return of large institutional investors, who have historically played key roles in mining cycles. While some pension funds and other institutions have begun to re-engage, the market as a whole still lacks the widespread euphoria typical of the late stages of a bull market. The current rally is largely driven by strong fundamentals within the sector: mining companies are benefiting from the continued rise in gold prices, achieving record profit margins and free cash flow.

Producers have strong cash flow, but there are no signs of a bubble yet.

Hoffman stated, "We are seeing producers raising large amounts of capital and generating strong cash flow, but the market has not yet entered a bubble phase."

He pointed out that one factor that could attract more large institutions back is the mining companies' increased focus on returns on capital. While share buybacks have made headlines many times, many institutional investors, especially insurance companies, are more focused on reliable dividend income. He believes, "By gradually increasing dividends and share buybacks, we are on a healthy track. For large institutional investors, demonstrating stable returns, even in mediocre years, is crucial."

In recent years, mining companies' balance sheets have been in their best condition, but the sector still faces structural challenges, particularly the difficulty of maintaining production growth.

Production declines among major producers and a lack of new discoveries constrain long-term growth.

Hoffman specifically noted that many of the world's largest gold producers are facing declining production, making it more difficult for them to increase dividends or demonstrate long-term growth. He cited examples such as Barrick, Newmont, and Agnico Eagle, all of which have seen weakening production trends in recent years. Meanwhile, significant new mine discoveries are extremely scarce in the industry, further limiting overall growth potential.

He stated, "We haven't really made any major discoveries in the past few years. The last meaningful discovery was the Snowline Valley project, which was several years ago."

Despite these challenges, Hoffman remains optimistic about the sector's fundamentals improving. With gold prices near record highs and mining company profit margins continuing to expand, he anticipates that funds will gradually flow downstream in the industry chain, from large producers to development-stage companies, and ultimately to exploration firms. Currently, investor focus remains primarily on the largest producers.

Hoffman concluded, "The market is mainly focused on large companies, where profit expansion is simply incredible as gold prices continue to rise."

Overall, the mining sector is experiencing a strong recovery from a prolonged slump, and the atmosphere at the PDAC 2026 conference confirms the initial start of this bull market cycle. While not yet in a full-blown frenzy, strong fundamentals, gradual capital inflows, and high gold prices collectively provide a foundation for further upward movement. Looking ahead, as institutional participation deepens and capital spreads downstream, this sector is expected to see a broader valuation reassessment. Investors should closely monitor subsequent developments to seize potential opportunities.