Michael Blanchard

JUNIOR MINING STOCK RETURNS SINCE THE FEBRUARY 29, 2024 BULL MARKET BEGAN: EXTRAORDINARY GAINS AND DEVASTATING DRAWDOWNS A historical study of 452 junior mining companies | February 29, 2024 – October 26, 2026 Structural Alpha Research 452 mining companies. Nearly three years of historical data. Extraordinary cumulative gains — and an equally extraordinary collapse in market breadth. The junior mining sector is experiencing one of the most severe periods of technical deterioration in our historical study. Yet the data reveal a striking paradox. Almost three out of four junior mining companies remain in positive territory since February 2024, even though the median stock has fallen more than 50% from its individual high. How can a market generate exceptional long-term returns while suffering such a devastating correction? Our study of 452 junior mining companies, covering February 29, 2024 through October 26, 2026, examines cumulative performance, drawdowns, moving-average participation, new lows and relative strength. The results offer a revealing picture of the sector's internal condition. 1. THE BULL MARKET IS STILL VISIBLE IN HISTORICAL RETURNS Despite the recent selloff, the cumulative performance of the universe remains remarkable. Of the 452 companies analyzed: 334 companies (73.9%) have positive cumulative returns. 112 companies (24.8%) have negative returns. 6 companies (1.3%) are essentially unchanged. The median cumulative return stands at +127.27%. In other words, the company at the center of the distribution has more than doubled its initial share price. This is not the profile of a universe that has failed to generate wealth over the full study period. But cumulative returns tell only part of the story. They do not reveal how much of those gains has subsequently disappeared. 2. THE OTHER SIDE OF THE RALLY: DEVASTATING DRAWDOWNS The drawdown statistics are among the most striking findings of the study. Median maximum drawdown: −61.49% Median current drawdown: −51.31% Companies currently down from their highs: At least 30%: 367 companies. At least 40%: 311 companies. At least 50%: 240 companies. At least 60%: 160 companies. More than half of the universe is trading at least 50% below its individual high during the study period. Consider the contrast: Median cumulative return: +127.27%. Median current drawdown: −51.31%. Both figures describe the same group of companies. A market can retain extraordinary gains over a multiyear period while simultaneously undergoing a correction of exceptional severity. These are not contradictory observations. They reveal the extreme volatility and dispersion characteristic of junior mining equities. Importantly, these are cross-sectional company statistics, not the performance of an investable equal-weighted index. 3. MARKET BREADTH REVEALS THE EXTENT OF THE DAMAGE To understand the current condition of the sector, we need to look beyond cumulative returns. Market breadth measures how many companies are actually participating in a trend. And the deterioration has been dramatic. Participation above the 200-day moving average On August 28, 50.23% of companies with sufficient data traded above their 200-session moving average. By October 23, that figure had collapsed to 17.56%. On October 26, it recovered only marginally to 17.75%. That represents a decline of more than 32 percentage points in less than two months. The weakness is no longer confined to a limited group of underperforming stocks. It has spread across the vast majority of the universe. Participation above the 50-day moving average The deterioration is even more severe in the intermediate trend. On August 28, 78.14% of companies traded above their 50-session moving average. By October 23, participation had fallen to just 6.83%. On October 26, it improved slightly to 7.67%. Fewer than eight out of every hundred companies were above their 50-day moving average. This is not an ordinary deterioration in momentum. It is an exceptionally broad breakdown in trend participation. The simultaneous weakness of the 50-day and 200-day measures indicates that both intermediate- and longer-term technical structures have been severely damaged. 4. NEW LOWS CONFIRM THE INTENSITY OF SELLING PRESSURE Moving averages are only one dimension of market breadth. New lows provide another important perspective. On October 23: 40.00% of companies with valid data recorded new 20-session closing lows. 9.51% recorded new 52-week closing lows. By October 26, those percentages had declined to: 26.38% for 20-session lows. 6.95% for 52-week lows. The decline in short-term new lows was substantial: 13.62 percentage points in a single session. However, the distinction between short-term and long-term new lows is crucial. A surge in 20-day lows can reflect a sharp liquidation event. A significant expansion in 52-week lows suggests something more persistent: companies are breaking price levels that had held for approximately an entire trading year. The current correction therefore involves not only intense selling pressure, but also significant deterioration in longer-term price structures. 5. IS A BULLISH BREADTH DIVERGENCE DEVELOPING? This is perhaps the most important question. After such an extreme deterioration, investors naturally begin looking for evidence that selling pressure is exhausting itself. Bullish breadth divergences typically emerge when the market continues to register new price lows, but progressively fewer companies participate in that move. The internal market begins to improve before the broader recovery becomes obvious. The October 26 readings offer some preliminary encouragement. Compared with October 23: MA200 participation improved from 17.56% to 17.75%. MA50 participation improved from 6.83% to 7.67%. New 20-session lows declined from 40.00% to 26.38%. New 52-week lows declined from 9.51% to 6.95%. These are favorable developments. But they represent only one session. There is not yet sufficient evidence to declare a confirmed bullish breadth divergence. A durable improvement would require a sustained contraction in new lows, broader participation above moving averages and evidence that the market can maintain its recovery. An isolated rebound after an extreme selloff is not the same as a structural reversal. 6. RELATIVE STRENGTH: THE NEXT LEADERS MAY ALREADY BE DIFFERENT One of the defining characteristics of junior mining equities is the enormous dispersion between individual companies. Some stocks have multiplied their prices many times over since February 2024. Others have suffered catastrophic losses. Even among the strongest cumulative performers, the ability to preserve gains varies dramatically. For example: San Lorenzo Gold has accumulated a gain exceeding 7,600%, with a current drawdown of approximately 24%. Patagonia Gold retains a cumulative gain exceeding 2,100%, but its current drawdown exceeds 74%. Discovery Silver combines a cumulative gain above 1,500% with a current drawdown of approximately 24%. These examples illustrate an important distinction. Historical leadership is not necessarily the same as current resilience. A company may rank among the greatest winners of a bull-market cycle while simultaneously experiencing an exceptionally severe correction. Relative strength should therefore be evaluated through both cumulative performance and the ability to withstand market-wide selling pressure. And as market conditions change, leadership may rotate. The companies that dominated the previous advance will not necessarily lead the next recovery. 7. CORRECTION WITHIN A BULL MARKET — OR THE BEGINNING OF A BEAR MARKET? The evidence supports two plausible scenarios. The recovery scenario The current decline could represent an extreme liquidation phase within a longer-term bull market. Under this scenario, new lows would progressively contract, participation above moving averages would recover, and a smaller group of resilient companies could begin establishing new leadership. Breadth improvement might emerge before the broader price recovery becomes convincing. The prolonged deterioration scenario Alternatively, the correction could continue eroding the substantial gains accumulated since February 2024. Initial rebounds might fail to restore intermediate-term trends. Participation could remain depressed, while persistent 52-week lows would indicate further deterioration in long-term structures. At present, the data do not allow either scenario to be ruled out. The decisive factor will not simply be how far prices have already fallen. It will be whether the market's internal condition begins to improve consistently. 8. WHAT WE ARE WATCHING NEXT Five indicators will be particularly important over the coming weeks: 50-day moving-average participation: Is the intermediate trend beginning to recover? 200-day moving-average participation: Are longer-term structures being rebuilt? 20-session new lows: Is immediate selling pressure losing breadth? 52-week new lows: Is longer-term technical deterioration beginning to subside? Relative strength: Which companies are demonstrating resilience and emerging leadership? No single indicator is sufficient. The strongest evidence would come from several measures improving together and sustaining that improvement. THE CENTRAL CONCLUSION Our study of 452 junior mining companies reveals five essential findings. First: The cycle since February 2024 has generated extraordinary cumulative gains. Nearly 74% of companies remain positive, and the median cumulative return exceeds 127%. Second: The correction has been devastating. The median current drawdown exceeds 51%, and more than half the universe has lost at least half its value from individual highs. Third: Technical deterioration is extraordinarily widespread. Participation above both the 50-day and 200-day moving averages has collapsed. Fourth: Selling pressure is affecting longer-term structures, as shown by the expansion in 52-week lows. Fifth: The October 26 improvement is encouraging, but it does not yet constitute a confirmed bullish divergence. The distinction matters. Extreme oversold conditions describe the magnitude of a decline. They do not, by themselves, prove that the decline has ended. The most important signal will not merely be that junior mining stocks stop falling. It will be that market breadth begins to improve persistently. Until then, analytical caution remains essential. READ THE COMPLETE RESEARCH The full study includes detailed historical breadth statistics, moving-average participation tables, new-low analysis, relative-strength comparisons, methodology and an interactive ranking of all 452 junior mining companies, including cumulative returns and maximum and current drawdowns. Structural Alpha Research — Full Study: structuralalpharesearch.net/… Independent quantitative research. For informational purposes only. Not investment advice. #JuniorMiners #GoldStocks #SilverStocks #MiningStocks #MarketBreadth #Drawdown #RelativeStrength