Howe Street is in the spotlight again as high gold prices and a low-interest-rate environment have investors kicking the tires of speculative mining exploration companies.

Photograph by: ...., LMP

Canada's top young hockey players aren't the only juniors gunning for gold.

These are boom times for Vancouver junior mining companies, as high gold prices coupled with low interest rates have speculative investors looking to Howe Street for juicy returns.

The B.C. companies with the highest share price gains in 2010 certainly reflected that trend. Vancouver juniors Gold Canyon Resources and Canaco Resources topped the list with share price gains of more than 1,000 per cent each.

“We had the type of environment that was conducive for speculative capital to move into the sector,”

said Wendell Zerb, director, research – mining analyst at Canaccord Genuity.

“In that kind of environment, companies that were working on what I would call exciting exploration/development programs, if they had success, they were well-rewarded in the marketplace.”

The conditions that fuelled TSX Venture exchange gains in 2010 remain in place for the upcoming year and relatively high volumes on the Venture reflect the heightened interest, Zerb said in a phone interview. But the coming year will continue to be volatile for the juniors, he cautioned.

2011 certainly opened with a bang: the first day of trading saw commodity prices plummet and the gold price drop about $35 an ounce, or more than two per cent.

“There are always bumps that take place in the junior exploration stories,” Zerb said, citing the history of volatility on the Venture exchange and its predecessor Vancouver Stock Exchange. “I expect that we're going to get some decent corrections during the year. Overall, is it still a really good environment for speculative junior mineral exploration companies? Absolutely.”

Gold Canyon Resources is exploring for gold in Ontario, Missouri and Nevada, while Canaco – which has a partnership with a major Chinese exploration firm – has gold exploration projects in Africa. It's not just mining juniors in the top 10, either. Two of the top 5 are oil-and-gas exploration plays: Primary Petroleum and East West Petroleum.

Two of the top 10 – Canaco and Rio Alto Mining – made Canaccord Genuity's 2010 junior mining watch list, which was released in December 2009. The yearly list of mining exploration companies highlights “early high-risk speculative stories that have a chance,” Zerb said.

Investments in such early-stage public companies are not for the faint of heart, he emphasized.

“These are very, very high-risk speculative stories,” Zerb said. “Anybody who's investing in them really has to understand that.”

These 10 B.C. companies had the highest share price gains in 2010 among companies with a market capitalization of at least $100 million:

Gold Canyon Resources (GCU-V) 1,100%

Canaco Resources (CAN-V) 1,034%

Primary Petroleum (PIE-V) 982%

Gold Bullion Development (GBB-V) 855%

East West Petroleum (EW-V) 680%

Rio Alto Mining (RIO-V) 598%

Tasman Metals (TSM-V) 528%

Mart Resources (MMT-V) 500%

Northern Superior (SUP-V) 500%

Copper Fox Metals (CUU-V) 480%

jkwantes@vancouversun.com

Blog: vancouversun.com/yourmoney

Twitter: @jameskwantes