Mining Stocks

Mining stocks are investments in companies that produce or explore for minerals. Some of these minerals include uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold. They are affected by fluctuating commodity prices in addition to their own business and operating risks.

While sometimes risky, mining stocks can also be strong performers when commodity prices move up. However, due to the volatility of these stocks, Pat McKeough recommends that they only form a modest part of a well-balanced portfolio.

Canadian penny mining stocks are some of the riskiest stocks you can buy. These companies are trying to find mineral deposits that mine at a profit and such a find are exceedingly rare. Because of this, it’s even more important to look for investment quality in penny mines.

For example, we automatically rule out investing in penny mines that promote themselves too aggressively or do so misleadingly. The mine-finding effort is more likely to succeed if the managers focus on finding a mine rather than hyping their stock.

Junior mining stocks are usually smaller companies that typically take on riskier mining projects. However, if a junior mining stock is successful at finding and mining, it can mean huge returns for investors.

No matter what type of mining stocks, or other stocks you invest in, TSI Network recommends following our three-part Successful Investor strategy:

– Invest mainly in well-established, mostly dividend-paying companies;
– Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities);
– Downplay or avoid stocks in the broker/media limelight.

newmont-mining

Revenue and earnings both rose for Newmont Mining in the latest quarter. Higher gold production, lower costs and improving gold prices have all worked on behalf of the world’s second largest gold producer. It is also proceeding with a major expansion project in Ghana. In the meantime, Newmont’s quarterly dividend, which is linked to gold prices, increases by 50% with the September payment.


NEWMONT MINING
(New York symbol NEM; www.newmont.com) is a major gold and copper producer, with mines in the U.S., Peru, Suriname, Australia and Ghana.

In the three months ended June 30, 2017, revenue rose 12.3%, to $1.88 billion from $1.67 billion a year earlier. Earnings gained 60.0%, to $248 million from $155 million. With more shares outstanding, earnings per share climbed 53.3%, to $0.46 from $0.30.


Mining stocks: digging for value

The right mining stocks make a valuable contribution to your investments whether commodity prices are up or down. Pat McKeough tells you how to find deep value in mining stocks—and gives you the outlook on gold, copper, uranium, and the remarkable story of Canadian diamonds.

 

Read this new free report >>

 


The gains came from higher gold production and lower costs. The company’s gold output rose 13.3%, to 1.35 million ounces from 1.19 million. Newmont’s balance sheet is also strong: its long-term debt of $4.0 billion is just 21% of its market cap; and it holds $3.1 billion in cash, or $5.81 a share.

Mining Stocks: Expanded Ahafo project expected to produce 1.8 million ounces

Newmont is developing an underground mine, and related processing facilities, at its Ahafo gold project in Ghana.

This expansion will produce a total of 1.8 million ounces over its estimated 11-year lifespan. To put that in context, Newmont expects to produce between 4.9 million and 5.4 million ounces of gold in 2017.

The company will spend $300 million to $380 million on this latest project. The underground mine achieved first production in June 2017 and Newmont expects commercial production from the mine to be underway in the second half of 2018. The Ahafo Mill Expansion is expected to begin production in the first half of 2019.

The company links its dividend to gold prices. Under that plan, it sets a minimum annual payout of $0.10 a share when gold trades below $1,150 an ounce. The dividend then rises in stages to a maximum of $1.10 if gold moves above $1,600.

As a result of improving gold prices, Newmont will increase its quarterly dividend with the September 2017 payment by 50.0%, to $0.075 a share from $0.05. The new annual rate of $0.30 yields 0.8%.

Recommendation in Canadian Wealth Advisor: Newmont is a buy, but only for investors who want to own a gold stock.

For our recent report on a Canadian stock we raised from a hold to a buy, read Promising production, strong balance sheet life Alamos Gold to a BUY.

For our view on the best way to invest in gold, read 7 ways to pick the best gold stocks.

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Mining Stocks Post Archives

5 tips for buying uranium stocks

5 tips for buying uranium stocks

Uranium stocks offer long-term promise—here’s how to pick the best ones.
Uranium stocks are shares in companies that explore for, mine and refine the metal uranium.

Uranium’s long-term outlook is positive, but supply remains much higher than demand. Low oil prices should also keep prices down in… Read More

Tips for investing in gold—and how to hold gold in your RRSP

Tips for investing in gold—and how to hold gold in your RRSP

Investing in gold: gold shares, gold bullion and gold in your RRSP—which is best?
At TSI Network, we’ve long recommended that you stay away from buying gold bullion, coins (unless you collect them as a hobby) or certificates representing an interest in bullion. If you are looking… Read More

Canadian diamond stock teams with DeBeers to open new mine

Canadian diamond stock teams with DeBeers to open new mine

Note: The Gahcho Kue diamond mine began its the ramp up to production in August 2016.  Below was our initial 2012 look at one of its major stakeholders,  Mountain Province Diamonds. Today the stock trades at $3.93 and has a market cap of $629 million.

Pat McKeough responds to… Read More

7 ways to pick the best gold stocks

7 ways to pick the best gold stocks

There are many ways to invest in gold. But we think the best gold stocks are your safest bet.
We recommend that gold investments only make up a limited portion of your portfolio’s resources segment.
However, if you want to hold gold shares, then here are some… Read More

What is one of the most promising Canadian diamond stocks?

What is one of the most promising Canadian diamond stocks?

Here’s one Canadian diamond stock for aggressive investors.
Diamonds are a transparent form of pure carbon, and their dense crystal structure makes them the hardest substance known.

Aside from jewelry, they’re widely used for machining plastic, glass and metal. Diamonds’ resistance to wear makes them essential for… Read More

Mining Stocks: Cash flow jumps for HudBay Mineral

Mining Stocks: Cash flow jumps for HudBay Mineral

The gold, silver, copper and zinc miner significantly increased its output in the latest quarter—a move that’s lifted revenue as well as cash flow.
HUDBAY MINERALS INC. (symbol HBM on Toronto; www.hudbayminerals.com) produces base and precious metals including copper, zinc, gold and silver.
The company first… Read More

Mining Stocks: Challenges ahead for Northern Dynasty Minerals

Mining Stocks: Challenges ahead for Northern Dynasty Minerals

Pat McKeough recently replied to an Inner Circlememberlooking for an opinion on this mining stock. The company aims to mine one of Alaska’s largest copper/gold deposits, says Pat. But it faces opposition.
Q: Hi Pat. I am considering Northern Dynasty Minerals (NDM) for the aggressive part… Read More