Is mining in a new boom?

This kind of stuff is simply wrong:

It’s boom time for mining stocks, says Lion Selection, prompting the LIC focused on junior miners to move its investment clock to 7.

“Equity prices have been driven by investors buying back into the sector,
however this is not the only money flowing in,” Lion says, noting anincrease in capital raisings.

“Miners are able to raise equity funds in large parcels again, and whilst we have seen instances of this in the last five years, until recently large fund raisings have corresponded exclusively with financing the purchase of operating assets,” Lion says in a note to clients.

“Given the strong share price performances of gold miners, and otherwise positive share price performance across the sector, but critically the opening of the mining IPO market, the Lion Clock has now moved to 7 o’clock.”

That clock has no reference to the current commodities cycle. There’s no cash takeovers. Exploration is not taking off, it is still tumbling with investment. Where are the new floats? With the exception of a few select commodities, we are currently in a bear market rally for mining: base metals, coal, bulk commodities, oil and gas all remain oversupplied at a point in the business cycle when demand is supposed to be booming but is instead is only supported by fits of stimulus.

This is a process in which we rise and fall around the marginal cost of production seeking that equilibrium point where supply and demand discover a sustainable price. It comes in fits and starts, wrenching cost curve drops and wild counter rallies.

Don’t mistake that for a new bull cycle.