Shares in junior mining companies could experience a revival in the next two to three years as more money goes into exploration, according to veteran mining investor Rick Rule.

Rule, chief executive of mining investment company Sprott, said decades of underinvestment from major mining companies in looking for new deposits could lead to a bull market for exploration.

Speaking at the Mines and Money conference in London, Rule said there has been ‘at least two decades of underinvestment and mis-investment’ from the majors, most of which he said have been ‘run by financial as opposed to exploration executives’.

But he added, ‘There has been a renewed focus on exploration. My suspicion is this increased focus will ultimately have a positive outcome, not just for the [majors] but for the juniors too.

‘The next two to three years will be very generous for high quality teams drilling for good deposits.’

Rule also said it will take only two or three major discoveries before ‘hope and liquidity probably returns to the junior sector’, adding that ‘no economic activity can add wealth like exploration.’

The veteran investor added the best source of money for junior firms will be from the major companies, who look to snap up stakes in high quality smaller miners as they put more money into exploration again.

An example of that came this week, when mining giant BHP (BHP) invested $22m in junior copper and gold explorer SolGold (SOLG), sending its shares up 12%.

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