Since mid-2025, the gold mining sector has reignited its bullish momentum, but unlike previous bull market cycles, this rally has not been a broad-based gain, but rather highly concentrated in large producers and concessionaires. The VanEck Gold Mining ETF (which tracks a basket of the world's largest precious metals producers) has risen more than 200% since the beginning of 2025, compared to only 85% for the TSX Venture Index, which reflects more junior developers and exploration companies, over the same period.

Kevin Smith, founder and CEO of Crescat Capital, believes the next phase of the mining sector's rally could be driven by a return of capital to long-term underfunded junior exploration firms, an area that has suffered from severe underinvestment for over a decade.

At the PDAC2026 conference: Sentiment has clearly improved, but investors remain cautious.

In an interview with Kitco News on the sidelines of the Prospecting and Development Association of Canada (PDAC) 2026 conference, Kevin Smith said the atmosphere at this year's conference was different from previous years, indicating a resurgence of interest in the mining sector, although many investors remained cautious. "The atmosphere was definitely different," he noted, adding that there were more people, more booths, and even finding a seat was difficult. This phenomenon reflects the increasing attention the mining industry is attracting, but investors remain hesitant about whether they've missed out on the rally after the strong performance of gold and mining stocks over the past year.

Despite concerns about having "missed the bull market," Kevin Smith emphasized that Crescat Capital continues to actively invest in mining stocks, believing the sector is still in the early stages of a long-term bull market. He stated, "We are definitely buying. Many investors may feel they've missed out… but we believe the cycle is still in its early stages."

Junior exploration companies are the most attractive: a thirst for capital leads to a supply-demand imbalance.

Kevin Smith is particularly bullish on the primary exploration sector. He stated that this segment has long suffered from a lack of funding, leading to a severe under-exploration and a structural supply-demand imbalance. He added, "The exploration segments we are focusing on have long been underfunded, resulting in a severe supply-demand imbalance."

Crescat's investment strategy focuses heavily on early-stage exploration companies, which have the greatest potential for growth should they make a significant discovery. However, he acknowledges that this sector carries significant risks and requires deep technical expertise.

He stated, "Tier-1 level geological targets are required." He added that the project must be located in a jurisdiction where mining is ultimately feasible. While management quality, local environment, and capital structure are important, geological conditions ultimately determine the success or failure of the project.

The discovery of scarcity highlights long-term opportunities: Investors need to patiently wait for confirmation.

One of the challenges facing the mining sector is the limited number of major new discoveries in recent years. Kevin Smith believes this is a result of long-term underinvestment. However, he also points out that this scarcity will ultimately drive up sector valuations as producers fiercely compete for new resources.

Some investors remain on the sidelines because they need to confirm whether the rise in gold prices is sustainable.

Following the sharp fluctuations in the metals market, he believes a period of consolidation will help institutional investors build confidence. He stated, "A pullback here is fine," adding that a healthy retracement allows investors to establish positions at lower levels.

Future Outlook: Capital Shifts from Tech Stocks to Commodities and Hard Assets

Kevin Smith predicts the next rally in precious metals will be driven by a broader shift in global capital flows, moving from overvalued large-cap tech stocks to undervalued commodities and hard assets—a shift he calls a “major rotation.” He states, “Funds will flow out of overvalued large-cap stocks and tech giants and into undervalued commodities and hard assets.”

Against this backdrop, gold remains a core trade. He added, "Gold is the number one anti-dollar trade."

Kevin Smith believes that the mining sector is poised for a sustained rally as investor confidence gradually recovers, metal prices continue to improve, and exploration successes increase.

He stated, "Funds chase performance." He added, "There's still plenty of performance to come that will attract these investors."

Overall , Kevin Smith's view suggests that while large producers have dominated the mining stock rally since 2025, junior exploration companies hold enormous potential due to their long-term funding needs.

The enthusiastic atmosphere at the PDAC 2026 conference suggests a recovery in sector sentiment, but investors still need to patiently wait for confirmation of price sustainability and new findings.

Crescat Capital's continued buying strategy reflects confidence in a long-term bull market: gold, as the ultimate anti-dollar asset, coupled with global capital rotation, will drive the next wave of growth in mining stocks, especially in the primary exploration sector.

While paying attention to short-term fluctuations, investors should focus on early-stage projects with strong geological potential and stable geographical locations to capitalize on this structural opportunity. In the coming years, if gold prices remain strong and accompanied by exploration breakthroughs, a revaluation of the mining sector as a whole will be inevitable.