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:

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

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Mining Stocks
Uranium stocks: electricity is in demand
Uranium prices peaked at 1979 to $43 U.S. a pound, on fears of production shortages. Many nuclear power plants then began hoarding uranium. However, supply disruptions never materialized. As operators used up their uranium inventories in subsequent years, the price of uranium fell to as low as $7.10 U.S. a pound in December 2000. Prices moved up steadily after that, and got as high as $138 U.S. a pound in June 2007. Uranium prices have since moved down to around $42 U.S. a pound. However, longer term, uranium demand is still likely to grow and push up the value of some uranium stocks.

Uranium consumption will rise with nuclear power

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1 min read
Pat McKeough
Mining Stocks
Gold investing: Why it’s hard to find value in gold stocks
Gold moved up from $300 an ounce in the early part of this decade to over $1,000 in 2008. It fell to $700 in November 2008 as the stock market bottomed out. Like the stock market, gold has regained some of its losses and now trades at around $900. We feel gold could eventually surpass its recent highs with a corresponding impact on many gold stocks. That’s mainly because investors fear that low interest rates and government stimulus spending will spur inflation. Gold prices, and gold investing, should continue to gain as the credit crisis makes it harder for gold companies to fund new projects and expand production. Regardless of what happens with gold investing in general, speculative and promotional gold stocks will make significant gains from time to time on hopes of a gold discovery. You can say something like that about any sort of speculative or promotional stocks, but most investors who dabble in them still wind up losing money. That’s because it is much easier to launch penny gold stocks than to find a gold mine....
1 min read
Pat McKeough
Mining Stocks
Choose Resource Stocks Over Gold Stocks
Gold stocks look attractive to many investors in a time of global turmoil in financial markets and stock markets. But our view all along has been that gold stocks are rarely if ever an attractive place to invest, compared to other resource-sector investments like oils and other mines, and there is no compelling reason to put up with the disadvantages of gold stocks today. Some enthusiasts of gold stocks feel it’s a travesty to lump gold in with mere industrial commodities. They put gold in a category of its own. Gold is different from other commodities, of course, due to its scarcity, its special physical characteristics like freedom from tarnishing and malleability, its unique suitability for use as a medium of exchange, and its place in the world’s financial history. But that specialness doesn’t make it an attractive investment. In fact, it detracts from gold’s investment appeal. Because of the strong attachment that gold enthusiasts feel to the metal, they bid up the price of gold stocks out of proportion to the profits those mines are likely to produce....
2 min read
Pat McKeough
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