With most mining stocks – and sectors – having been in the doldrums in recent years, investors have listened to endless commentary talking about “compressed valuations”, “strong value propositions”, and simply “buying opportunities”. But even with the most experienced and/or patient mining investors, such discussions become increasingly tiresome.
Investors don’t prosper on potential. Investors prosper on
returns. And in recent years, there haven’t been many mining companies able to reward return-starved investors with a strong stock performance.
However, as mining investors also frequently hear, mining is a highly cyclical industry. After a number of very lean years, mining investors (and mining companies) may be starting to see a light at the end of the tunnel. In this edition of Buzz on the Bullboards, we’re shining a spotlight on mining winners. For the moment (at least), these winners tend to be concentrated into a single sector: precious metals.
Stockhouse’s mining investors have their fingers on the pulse of this sector. In our January 24, 2019 edition of Buzz, we published the results of our current Stockhouse Investor Pulse poll.
As mining investors gear up for PDAC, here are some of the precious metals miners that have already been generating healthy returns for investors. And with valuations still historically low and many small-caps not yet rallying, newer entrants can still “get in early” with many of these companies.
Great Bear Resources Ltd. (TSX: V.GBR, OTCQB: GTBDF, Forum) +700% 1-year return
One of the biggest winners in the world of mining over the past year is a junior gold exploration company, Great Bear Resources. As the saying goes, “a picture is worth a thousand words”. In this case, however, mining investors may choose to abbreviate the chart below with a single word:
“ten-bagger”.
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The Company’s Dixie Gold Project has been generating a series of exciting drilling intercepts. This has propelled GBR’s share price from roughly $0.50 a year ago to a new all-time high above $4 per share in recent days.
Wallbridge Mining Company Limited (TSX: WM, OTCQB: WLBMF, Forum) +400% 1-year return
This is another junior gold mining company that is generating considerable “buzz” through exceptional high-grade drilling results. But while Wallbridge hasn’t risen as far as Great Bear over the past year (its shares have ‘only’ quadrupled), WM’s drilling results have arguably been even stronger.
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Here are some of the numbers that have been pushing the Company’s share price higher:
- 260.4 g/t Au over 7.02 meters
- 311.1 g/t Au over 3.06 meters
- 141.2 g/t Au over 7.06 meters
- 137.63 g/t Au over 4.10 meters
Huge numbers. And Wallbridge is currently harvesting some of this ultra-high grade gold in a “bulk sample” that is expected to yield in excess of CAD$30 million.
Royal Nickel Corp. (TSX: RNX, OTCQB: RNKLF, Forum) +250% 1-year return
Now doing business as “RNX Minerals”, this is another high-flying mining company that has soared higher from its gold mining operations. A major discovery at RNX’s Beta Hunt Mine in 2018 caused the share price to explode.
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Year-over-year, the Company has recorded roughly a 250% gain, but that misses part of the story here. Its current share price ($0.63) is 9X above its 52-week low of $0.07. And for any fortuitous investor who bought in at the bottom on September 7, 2018, could have reaped
as much as a 1700% gain if they sold at the high on September 24, 2018 – just 2 ½ weeks. For these reasons, RNX has consistently topped Stockhouse’s list of most popular Metals & Mining stocks over recent months.
Kirkland Lake Gold Ltd. (TSX: KL, NYSE: KL, Forum) +250% 1-year return
Also generating a strong return for investors over the past year is large-cap gold producer, Kirkland Lake Gold. While the world’s very largest gold producers are notorious for being bloated, under-performing behemoths, Kirkland Lake is simply a well-run gold mining company.
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The Company is cresting to a new 52-week high on the back of “record earnings and cash flow” for both Q4 and the full-year 2018.
Gran Columbia Gold Corp. (TSX: GCM, OTCQB: TPRXF, Forum) +100% 1-year return
This mid-tier gold mining company isn’t only benefitting from a rising gold price. This is
a successful turnaround story where management has raised output, significantly reduced cash costs, and dramatically cleaned up its balance sheet.
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The market has been rewarding GCM for its success on the operational front. Meanwhile, the Company provides investors with a big long-term upside as it moves its huge Marmato Deposit (~8 million ounces gold) toward full production.
First Majestic Silver Corp (TSX: FR, NYSE: AG, Forum) +38% 3-month return
More recently, some of the silver mining companies have started to move, with large-cap producer First Majestic Silver setting the pace. First Majestic is one of the purest silver producers on the planet, and most of its non-silver byproducts are gold credits.
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With six-producing mines located in Mexico (the global capital for silver production), a high commitment to mine efficiency, and a rising production profile, First Majestic’s share price has been leveraging recent gains in the price of silver.
Silvercorp Metals Inc. (TSX: SVM, NYSE American: SVM, Forum) +38% 3-month return
This is a mid-tier silver producer based in China that also has a very high ratio of silver in the production from its three mining complexes (the Ying Mine District is actually a collection of four, separate mines). Thus this is another company that can provide strong leverage on a rising silver price.
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Like First Majestic, this is a silver mining company that has just started to move higher and (like First Majestic) is well off of historic highs – despite steadily advancing operations. Silvercorp’s management also has a strong efficiency focus and has introduced innovative mine protocols to boost output.
Why mention these silver mining companies, instead of selecting additional gold mining companies with more robust 1-year returns? Think “the Tortoise and the Hare”.
When precious metals start to rally, it’s generally gold (and gold mining companies) that jump out of the starting blocks first. But in any major precious metals rally, it’s
always silver that crosses the finish line first. Always. And a recent
Stockhouse feature shone the spotlight on this most-brilliant precious metal.
The gold sector has been generating some strong returns (unevenly) for several months, and longer than that for some of the stronger performers. Silver mining stocks have only begun to rally. For investors who believe that “this is the year” for precious metals, the vast majority of these precious metals mining companies remain very cheap.
At Stockhouse, a significant percentage of our mining investors
do think that this is the year for mining companies, as evidenced by the results from our latest Stockhouse Investor Pulse poll:
As we head into PDAC, it’s clear that bullish sentiment is returning to the mining space, even ahead of any broad rally among these companies. At the moment, it’s precious metals that leads the parade in mining, leading to the question in our
new Investor Pulse poll.
With precious metals one of the strongest sectors in recent months and many mining stocks rallying, what percentage of your portfolio is in precious metals?
- More than 50%
- 25% - 50%
- 10% - 25%
- Less than 10%
- Still looking
- Not interested
Look for this new poll on our
Stockhouse homepage and cast your vote to weigh in on precious metals.
While the precious metals sector is supplying most of the mining winners at the moment, Stockhouse has many large mining hubs for investors on our industry-leading Bullboards, spread across many mining sectors. And these hubs are generating a lot of activity on our site.
Look at these read numbers from our most popular mining stocks on Stockhouse, year-to-date in 2019.
While Royal Nickel (RNX Minerals) is dwarfing the numbers from
any mining Bullboard on Stockhouse at the moment, several other mining companies also have strong support, and numerous other mining stocks see regular activity on their Stockhouse Bullboards.
Mining stock valuations remain generally weak, despite the fact that many metals markets are relatively strong. Mining investors are taking note of this large disconnect and sentiment is rising – even ahead of any broader mining rally.
This rising wave of mining sentiment is perfectly timed for the world’s premier mining conference: the Prospectors & Developers Association (PDAC) conference, held annually in Toronto. This year’s event officially kicks off March 3, 2019 and runs through March 6
th.
Watch for additional post-PDAC coverage of the conference, including our usual collection of on-the-floor interviews with notable names at PDAC.
FULL DISCLOSURE: Great Bear Resources Ltd. and Wallbridge Mining Company Limited are paid clients of Stockhouse Publishing.