By Jamie Hyland
TORONTO, CANADA (MiningIR) — Canada’s mining industry has been a pillar of economic growth and a global leader in natural resource extraction. Despite this, it faces an existential threat that is compromising its future. The advocacy group Save Canadian Mining (SCM), founded by Terry Lynch, has been at the forefront of a critical fight to protect the sector from illegal practices like naked short selling. These issues, combined with crippling permitting delays, are creating an uncertain future for small-cap mining companies that are essential to Canada’s economy.
Some of the biggest names in the mining industry have united to champion the future of Canada’s small-cap mining sector. Notable figures such as Eric Sprott, Sean Roosen, Rob McEwen, and Keith Neumeyer have aligned as cofounders, lending their influential support to Save Canadian Mining’s initiative to safeguard the industry’s growth and sustainability.
The Size and Importance of the Canadian Mining Sector
The mining industry is a vital component of Canada’s economy, contributing approximately $107 billion to the nation’s GDP in 2022 and employing over 700,000 people across the country. As one of the world’s largest producers of minerals such as potash, nickel, and uranium, Canada’s mineral exports accounted for nearly $125 billion in revenue, reinforcing its position as a global mining powerhouse. However, these impressive figures mask an underlying vulnerability. Predatory market practices and regulatory bottlenecks threaten to erode this economic engine, putting thousands of jobs and billions in potential investment at risk.
“Illegal naked short selling has crippled Canada’s small-cap mining sector, making it almost impossible for companies to raise the necessary capital for exploration and development,” says Terry Lynch, Founder of Save Canadian Mining. “This isn’t just a problem for our industry—it’s a problem for Canada’s economy.”
The Problem with Naked Short Selling
Naked short selling is a predatory practice that allows traders to sell shares they don’t actually own, with the intention of driving down a company’s stock price. Unlike legitimate short selling, which involves borrowing shares and selling them in the open market, naked short selling bypasses these steps entirely, causing artificial downward pressure on stocks. This is devastating for small-cap mining companies that rely on fair stock valuations to attract funding for exploration and development.
Capital Market Collapse
The impact of naked short selling on Canada’s capital markets has been staggering. The TSX Venture Exchange (TSXV), which serves as the primary platform for small-cap companies to raise funds, has witnessed billions—if not trillions—of dollars in value wiped out due to these predatory practices. This erosion of capital has not only stunted job creation and tax revenue but also hindered innovation and exploration in a country rich in untapped mineral resources.
The Bottleneck of Permitting
Compounding the crisis is the issue of lengthy permitting processes. Even as technological advancements like Artificial Intelligence (AI) promise to accelerate the discovery and development of new mines, Canada’s slow and cumbersome permitting procedures are holding the industry back. Without reforms, the country risks missing out on the global critical mineral boom, which is essential for the energy transition and technological advancement.
What Needs to Be Done
To address these challenges, SCM has outlined a robust action plan focused on three main areas:
- Regulatory Reform: SCM is calling on the Canadian government and provincial regulators to take decisive action against naked short selling. Countries like South Korea have already banned the practice, and Canada must follow suit to remain competitive in attracting mining investment.
- Lawsuit: SCM is preparing a class-action lawsuit representing hundreds of companies that have been harmed by naked short selling. This legal action aims to hold the wrongdoers accountable and push regulators to implement stronger enforcement mechanisms.
- Public Awareness and Pressure: SCM is utilizing social media and direct lobbying to expose the parties responsible for allowing these practices to continue. By rallying support from shareholders, industry leaders, and concerned citizens, SCM hopes to build enough pressure to force regulatory bodies and politicians to act.
While naked short selling is a visible and immediate issue, permitting delays are a slower but equally destructive threat to Canada’s mining future. SCM is advocating for streamlined, transparent permitting processes that balance environmental protection with the need for timely resource development. Without these reforms, Canada risks losing its competitive edge in the race to develop critical mineral resources.
A Call for Collective Action
Despite the clear and present dangers, government response has been sluggish. SCM believes that only a unified front—comprising small-cap companies, shareholders, industry stakeholders, and concerned citizens—can generate the momentum needed to push for meaningful change.
The future of Canada’s mining industry hangs in the balance. Without urgent reforms to end illegal naked short selling and fix the bottlenecks in permitting, the nation risks falling behind in the global race for critical minerals. Now is the time for stakeholders to stand together and demand that Canada’s regulators step up to protect the backbone of its economy.
Find out more about Save Canadian Mining here.
