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… Read More
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.
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.
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.
Mining Stocks Post Archives
John Templeton, a famous investor who inspired modern investors, still offers lessons we can use today
Today, many investors might not immediately recognize the name of the master investor John Templeton. In the final quarter of the last century, however, Templeton was a famous investor, and… Read More
While it has successfully opened the first diamond mine in Quebec and it is getting a higher price for its diamonds, this stock is still dealing with some problems in its processing plant, and will likely need more than one producing mine to spur its… Read More
Potash Corp. expect to complete its merger with Agrium in the next few months. Under the deal Potash Corp. investors will receive 0.40 of a share in the combined company (called Nutrien) for each POT share they hold; Agrium investors will receive 2.23 shares for each… Read More
In a recent issue of Stock Pickers Digest, we raised our recommendation on Alamos Gold from a hold to buy. This Canadian company has full ownership of 3 producing gold mines and several strong development projects while production and cash flow are both rising. Thanks… Read More
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
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
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
Heavy equipment specialist Finning has seen its revenue rise and fall in response to fluctuating commodity prices, largely due to lagging sales of new equipment. But higher maintenance and repair business, restructuring and renewed spending in the oil sands have the company well positioned for… Read More
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
This leading miner saw its cash flow jump in the latest quarter despite falling silver production and only marginal increases in its gold output.
HECLA MINING COMPANY (New York symbol HL; www.hecla-mining.com) explores for, mines and processes silver and gold in the U.S., Canada and Mexico.
Most… Read More
Agrium is set to see its earnings rebound this year on stronger prices and regulatory approval for its planned merger with a chief competitor.
Under the terms of the upcoming merger of Potash Corp. and Agrium, POT investors will receive 0.40 of a share in… Read More
The best Canadian mining companies are well-financed with low debt and good management
The best way to invest in Canadian mining companies is through high-quality mining stocks as part of the Resource sector of your portfolio.
Mining stocks are affected by fluctuating commodity prices in addition… Read More
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
Gold company stocks are a better investment than many gold investors realize
All investments come with a mix of risk and potential reward. The greatest danger comes when you understand the mechanics of an investment, but you’re missing some of the details. Your understanding of the… Read More
Both revenue and cash flow have fallen for this drilling contractor, but it should benefit as miners try to access increasingly remote deposits of ore, oil and gas.
MAJOR DRILLING (Toronto symbol MDI; www.majordrilling.com; No dividends paid) is a large contract driller that mainly serves… Read More
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
Silver investing can be profitable if you follow our advice for selecting the best mining stocks and ETFs
Silver investing gains popularity when gold prices rise, but do you know how to invest in these stocks properly?
Silver attracts a lot of interest as gold prices reach levels that seem too expensive for the average investor. Silver is sometimes known as “poor man’s gold”… Read More
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