Canadian-based mining companies that are betting on the global energy transition saw a surge of investor interest in 2023, according to the latest edition of the TSX Venture 50 list. 

The annual ranking of top performers on Canada's main venture exchange, released by the Toronto Stock Exchange on Wednesday, shows 2023 was a blockbuster year for the mining sector.

Mining dominates this year's list, with companies in that sector posting an average 734 per cent market cap appreciation for the year and a 245 per cent average share price increase, the report said. 

The gains came as investors flocked to small-cap and venture companies exploring opportunities in precious metals, critical minerals and the energy transition, said Loui Anastasopoulos, CEO of the Toronto Stock Exchange, in an interview.

"Critical minerals has been a really strong theme throughout the last year or two," Anastasopoulos said.

"Investors continue to show strong interest in the energy transition and any company connected to critical minerals such as copper, nickel and lithium continues to shine."

The TSX Venture 50 list showcases small-cap issuers across five sectors — energy, mining, clean technology and life sciences, diversified industries, and technology. 

The companies are ranked by their 2022 performance in three areas — market capitalization growth, share price appreciation, and trading volume.

This year’s companies delivered an average financial return of 121 per cent and saw an average market capitalization increase of 248 per cent, a boost from last year's performance. In December 2023, the total market cap of Venture 50 companies was $23.1 billion – an increase of $7.6 billion year-over-year.

One of this year's top performers, Vancouver-based Surge Battery Metals, is looking to develop a lithium deposit in northern Nevada. Lithium is a key component in electric vehicle batteries.

While lithium prices were volatile in 2023, Surge Battery Metals CEO Greg Reimer said he's optimistic they will rebound as he believes the transition from internal combustion engines to electric vehicles is inevitable.

"What we've had recently is a situation where the growth in electric vehicles has essentially fallen short of what was projected," he said.

"There's a number of things that are contributing to that. But let's keep in mind that year-over-year, there continues to be a record number of electric vehicles sold worldwide."

Other companies with strong performance on this year's list include those involved in clean technology, such as the manufacturing of electric cargo vans or the transformation of organic waste into renewable energy.

The year was a softer one for traditional energy stocks, which saw a decline in investor interest from 2022, when oil and gas prices were soaring. Energy stocks on the TSX Venture Exchange saw an average share price increase of 51 per cent in 2023, compared with 89 per cent the year before.

This report by The Canadian Press was first published Feb. 21, 2024.