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.

Alamos Gold

The gold miner’s cash flow has soared as gold prices rise and it prepares for full production at its new operation.

ALAMOS GOLD (Toronto symbol AGI; www.alamosgold.com) owns the Mulatos and El Chanate mines in Mexico, and the Young-Davidson mine in northern Ontario. That Canadian site holds as much as 5.6 million ounces of gold. Production started in 2013 and the operation should reach full output in 2017.

The company also has a number of projects under development in Turkey, the U.S., and other parts of Mexico and Canada. They include its advanced-stage La Yaqui project in Mexico. The site holds at least 450,000 ounces of gold.


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In the three months ended September 30, 2016, Alamos’s overall gold production increased 13.2%, to a record 99,228 ounces from 87,633 a year earlier. Along with rising gold prices, that higher output lifted the company’s cash flow to $46.1 million, or $0.17 a share, from $12.2 million, or $0.05 a share (all figures except share price in U.S. dollars).

Mining Stocks: Has $287 million in cash

Alamos holds cash of $287.0 million. It will use some of that money to complete the Young-Davidson gold mine and increase the operation’s output from 380,000 ounces in 2015 to over 424,000 for 2017.

The company’s outlook is positive. But it needs to succeed with its Young-Davidson expansion in order to meet its production targets.

Recommendation in Stock Pickers Digest: HOLD

For our recent report on the world’s largest uranium producer, read Positive outlook for Cameco Corp. despite low uranium prices.

For our answer to one of the most frequent questions about gold, read Gold investing: Gold stocks and 2 other ways to put gold in your RRSP.

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Mining Stocks Post Archives

Mining Stocks: Finning ready for growth

Mining Stocks: Finning ready for growth

Finning International Inc. lifted its earnings in the latest quarter despite low commodity prices and their impact on sales of its heavy equipment.
FINNING INTERNATIONAL INC. (Toronto symbol FTT; www.finning.com) sells and services Caterpillar-brand heavy equipment in Canada, South America and the U.K. Its main customers… Read More

Mining company stocks: What to look for before you invest

Mining company stocks: What to look for before you invest

The best mining company stocks will have a record of success and a strong management team
Mining company stocks involve the exploration for, and the development and production of minerals. While sometimes risky, mining stocks can also be strong performers when commodity prices move up.
We think… Read More

The risks of following in celebrity investors’ footsteps

The risks of following in celebrity investors’ footsteps

Celebrity investors should be observed, not followed

In today’s celebrity-obsessed world, it’s natural for some investors to place a premium on celebrity-investor endorsements.

More and more investors seem to look on the involvement of celebrity investors like Warren Buffett or Bill Gates as something… Read More

The best mining stocks to buy meet all of these criteria

The best mining stocks to buy meet all of these criteria

If you have been searching for junior and major mining stocks to buy, learn these tips before investing.
The best mining stocks to buy can generally be broken up into two categories, juniors and majors.

Junior mining stocks are mining companies that are generally new or have… Read More

Investing in precious metals: What you need to know

Investing in precious metals: What you need to know

The inside scoop on successfully investing in precious metals like silver and gold.

Investing in precious metals is very attractive to many mining stock investors. That’s in addition to investments in companies that produce or explore for other minerals, such as uranium, coal, molybdenum… Read More

Tips for profitable investing in top mining stocks

Tips for profitable investing in top mining stocks

What you need to know to pick the top mining stocks

Mining stocks are investments in companies that produce or explore for minerals such as uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold.

We think most investors should consider… Read More