Critical Commodities, Critical Timing: Why Canadian Juniors Can’t Be Ignored

 

Flow-Through Funds in Focus: A Golden Moment for Canadian Juniors

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As we reach the midpoint of 2025, global markets continue to be shaped by persistent macro uncertainty, most notably
the ongoing trade tensions between the United States and China. Both sides have recently accused the other of violating
a fragile trade truce, particularly over the critical issue of rare earth elements — materials vital to advanced electronics,
clean technology, and defence systems. The U.S. has alleged that China is walking back its commitment to ease
export controls, escalating what is quickly becoming a strategic battle over access to essential resources.

These export controls — restrictions on the cross-border flow of strategic goods and technologies — have re-emerged
as a powerful geopolitical lever, and we expect supply chain security to remain central in upcoming trade negotiations.
Yet despite the broader volatility, Canada’s junior mining sector is showing renewed resilience and strength. In fact,
today’s environment is marked by central bank easing, firming commodity prices, and increasing demand for strategic
resources is creating one of the most compelling backdrops in recent memory for investors focused on early-stage
exploration and development companies.

Markets are now anticipating earlier interest rate cuts from the Federal Reserve, with futures pricing in a potential move
as early as September (versus prior expectations for October). A combination of lower rates and progress toward trade
resolution would be strongly supportive for risk assets, particularly in the junior resource space, which has historically
benefited from improved liquidity and investor risk appetite.

Indeed, 2025 has quietly become a breakout year for Canadian-listed junior mining companies. As shown in the chart
below, the Marquest Custom Junior Mining Index, which tracks hundreds of Canadian juniors via Bloomberg, has delivered
a robust 18% year-to-date return, a clear signal of capital rotating back into the sector.

 

Source:  Bloomberg

This rally has been supported by a broad-based recovery across key commodities. Copper has gained approximately
22% year-to-date, driven by tight supply and accelerating demand from electrification and clean energy initiatives.
Gold has surged 28%, buoyed by persistent geopolitical tensions in Eastern Europe and the Middle East.
Even uranium, after a muted start to the year, has staged a sharp rebound since March — a trend we explore
further below as the sector enters a new phase of global strategic relevance.

Uranium: Strong Policy Tailwinds and Supply-Demand Imbalance Support Long-Term Bull Case

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On May 23, President Trump signed a series of Executive Orders aimed at dramatically expanding domestic nuclear
power capacity. These directives include extensive permitting and regulatory reforms, most notably a new 18-
month cap on approvals for the construction and operation of nuclear reactors, as well as fast-tracked testing for
small modular reactor (SMR) technologies. SMRs are a next-generation class of nuclear reactors that are smaller,
more flexible, and faster to deploy than traditional plants, making them central to the future of clean, reliable
base-load power.

The U.S. policy sets ambitious goals: 10 new large-scale reactors under construction by 2030, and total nuclear
capacity rising to 400 GW by 2050, from approximately 100 GW today. While these targets are aggressive, any
material expansion of the U.S. nuclear fleet presents a structurally bullish scenario for uranium over the medium
to long term.

From a market perspective, uranium remains in structural deficit, with supply expected to trail demand through
at least 2030. Despite short-term softness in spot pricing, delayed supply responses, combined with growing
global demand driven by decarbonization, energy independence, and power security, are creating a strong foundation
for sustained price strength.

This environment is particularly favourable for Canadian junior uranium explorers. As shown below, demand for
U₃O₈ (uranium ore) is projected to exceed supply, supporting both the commodity price and upstream investment
opportunities. With Canada home to some of the world’s highest-grade uranium deposits — and with major
producers gradually depleting their existing reserves — there is rising interest in juniors as the next source of
production growth. This could come via joint ventures, equity partnerships, or outright acquisitions.

 

Source: Scotiabank, Daily Edge (Mar. 25, 2025)

Canada’s junior mining sector is uniquely positioned to capitalize on this shift. With strong fundamentals and
growing investor interest, Marquest will continue to align its portfolios in 2025 to take advantage of these
emerging opportunities, particularly through its flow-through investment vehicles, which offer powerful tax
advantages and direct exposure to exploration-stage upside.

Conclusion: A Rare Window of Opportunity in the Junior Resource Sector

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As global demand for strategic commodities accelerates and capital continues to flow back into exploration and
development companies, Canada’s junior mining sector is emerging as a clear beneficiary of this trend. With supportive
macro conditions — including strong commodity pricing, anticipated interest rate cuts, and a rising geopolitical
focus on energy and resource security — the outlook for early-stage mining investments is increasingly attractive.
Flow-through structures remain one of the most efficient ways to access this opportunity while offering
significant tax advantages. In today’s environment, targeted exposure to high-potential juniors in uranium, gold,
copper, and critical minerals offers meaningful upside potential and diversification for investor portfolios.

To learn more, contact the Marquest Sales Team regarding the Marquest Critical Minerals 2025 Super Flow-Through Limited Partnership,
designed to provide tax-advantaged exposure to Canada’s junior exploration opportunities, positioning clients to potentially
benefit from the next phase of activity in the resource market.

 

Glenn G. Drodge, CFA Senior Portfolio Manager