Three years ago, the bottom dropped out of the commodities markets, and plenty of investors were ready to call it quits.
Now, everything has changed.
The mining sector is red-hot. In 2017, the top fifty mining companies increased in value by $141 billion, reaching a total value of $896 billion.
At the end of the year, there was a stock surge as prices shot up across the board.
With the global economy booming and demand for commodities surging, there’s never been a better time to jump in on the action.
And the hottest entry point for this boom is gold, silver, and gemstone mining, where some companies are making big discoveries and even bigger profits.
Here are five mining companies ready to ride the wave of the new commodities boom in 2018:
#1 Newmont Mining Corporation (NYSE:NEM)
A company focused on gold and copper mining, Newmont has extensive operations in Australia and Indonesia.
With a market cap of $20.5 billion, Newmont has outperformed the industry average over the last six months, rising 18 percent. The company, which employs more than 12,000 people, unearthed more than 4 million ounces of gold in 2017.
And it’s looking to continue that streak in 2018. Total output estimates have been revised upward, to 4.9-5.4 million ounces of gold for the year. It’s expecting lower costs and higher gold prices to generate greater profits.
Newmont has picked up a lot of attention as a preferred mining stock, thanks to its strong growth in 2017 and the positive signs going forward.
Newmont, like fellow gold-miners Barrick and Goldcorp, has aggressively cut costs in the last few years to increase profitability, after the commodities bust of 2015.
It has cut a lot of its debt and enters the new year with lower costs relative to the price of gold. That should ensure it a healthy profit margin.
#2 Fura Gems (TSX.V:FURA; OTC:FUGMF)
Amid the gold and the silver, it’s worth noting that the global gemstone industry is doing better than ever.
That’s particularly notable when you compare it to the weaknesses in the diamond industry, where profits have fallen and demand seems to be drying up.
Fura Gems, a mining company with a special focus on colored gemstones (emeralds, rubies and sapphires), is looking to make a splash in 2018.
The company has purchased a controlling stake in the famed Coscuez Mine in Colombia. The mine, which has been a consistent producer of emeralds for more than four-hundred years, is still only 10 percent explored. At one point, it produced 77 percent of all the emeralds in Colombia, the world’s leading emerald producer.
That’s great news when you consider its most famous stone: the massive 1759-carat Guinness emerald, one of the largest emeralds in the world.
At a per-carat valuation of $9,800, the massive stone could be worth $17 million, and perhaps much, much more.
While the diamond market faces a decline, colored gemstones are more popular than ever. Fura Gems hopes to capitalize on that demand by producing emeralds from its Coscsuez property and rubies from its new mine in Mozambique.
The company may be small, with a market cap of only $38 million, but it’s got a lot going for it.
CEO Dev Shetty came to Fura from Gemfields Plc. While there, Shetty performed miracles. He took the company from a $209 million annual loss to an asset valuation of over $1 billion in over five years, through major discoveries in Colombia and Mozambique.
NEWS UPDATE: Fura Gems has just released results of their ruby drilling campaign in Mozambique. Click Here for their latest release
Given his track record, it’s possible Shetty will bring the same success to Fura Gems. With a mere $10 million investment in Coscuez, the company could repeat Gemfields’ performance: the company realized $225 million from only seven auctions.
With that kind of profit potential only months away, Fura Gems could be really undervalued.
#3 Royal Gold Inc. (NASDAQ: RGLD)
It was a very, very good year for Royal Gold Inc. last year. Despite the price of gold growing only 9 percent, the company saw its own share price increase by 38 percent.
The company reported record levels of revenue and operating cash flow in FY 2017, and pumped up its dividend.
A streaming and royalty-based company, Royal Gold doesn’t get directly involved in mining but rather retains a portfolio of gold and silver investments that allows it to pay out dividends to investors. It has a market cap of $5.86 billion.
The company owns interests in 196 properties scattered across six continents, including 39 producing mines and 23 projects in the developing stages.
The company’s subsidiary RGLD Gold AG sold 62,000 ounces of gold equivalent, and it currently sits on another 14,000 ounces in its inventory.
Now, with a fresh acquisition at the Rainy River mine in Canada, Royal Gold is poised for its best year ever. The mine is expected to produce a gold stream of 15,000 ounces and a silver stream of 1.86 million ounces, which could double the company’s silver assets from FY 2017.
Once the mine starts producing, all Royal Gold will have to do is sit back and watch the money pour in.
#4 Agnico Eagle Mines Limited (NYSE: AEM)
Formed in 1972 through the merger of two successful mining firms, Agnico Eagle has current projects scattered across the globe, though it’s mostly focused on Canada.
The company’s performance in 2017 was reasonably strong, as it basically matched the gold miners index (GDX) and gained around 10 percent, putting it on par with Newmont Mining.
The company expects year-over-year revenue growth of 4.7 percent, rising to $2.2 billion for the year, before declining somewhat in 2018. That’s because Agnico has money riding on new ventures that likely won’t start producing until the following year.
Agnico Eagle has a track-record of beating expectations. In the last quarter it exceeded its own estimates, delivering earnings of 26 cents a share instead of just 17 cents
The CEO Sean Boyd feels gold is a quality investment and a perfect way to diversify a portfolio—unlike crypto-currency, which has gotten all the attention lately.
“I’d rather own gold than bitcoin,” Boyd told CNBC. “It’s proven itself.” Boyd feels certain gold will retain its value despite changes in technology and the current interest in alternative currencies like Bitcoin.
With that kind of confidence, it’s no wonder that Agnico carried a strong reputation, and will likely prove to be a winner for investors looking to get in on the next gold rush.
#5 Alcoa Corp (NYSE:AA)
Like a lot of miners out there, Alcoa had a strong year in 2017. A firm based primarily in aluminum and bauxite mining, Alcoa saw its stock double last year, and increased its free cash flow from a low, low $3 million to an astonishing $288 million.
The company’s cash balance by year’s end was $1.1 billion.
Alcoa is the result of a split, when the old Alcoa divided its operations and spun out a new firm, Arconic. Alcoa focused entirely on aluminum, which at the time of the separation was experiencing a glut. The future for Alcoa looked grim.
But now the tables have turned. The market for bauxite, aluminum and related products is strong and expected to grow even stronger in 2018.
Alcoa, even while it was raking in the cash, focused on growth projects in 2017. That strategy should pay dividends in the new year, and while the stock price likely won’t double again, it’s sure to continue its winning streak.
And while the company’s performance in Q4 was a little on the underwhelming side, that’s resulted in a stock price dip that gives investors a golden opportunity.
Honorable Mentions:
Franco-Nevada Corporation (TSX:FNV): This is a CAD$15.52-billion market cap company. Some investors like the fact that FNV ties returns to the price of gold without risky exposure to direct ownership and operatorship of mines. FNV ended 2016 with a relative bang. But this is a unique case because it doesn’t own or operate any mines—so this is for the investor looking for a different kind of exposure to the metals rally: FNV secures precious-metal streams.
Franco-Nevada’s diverse interests in silver, platinum group metals, oil and gas and other resource assets are definitely a plus for those looking for exposure to these sectors.
Alexco Resource Corp (TSE:AXR) operates on two sides of the mining spectrum. Its mining business operates in the Keno Hill Silver District in Canada’s Yukon Territory, historically one of the highest-grade silver districts in the world, having produced over 214 million ounces of silver. Alexco is a focused and driven company with proven exploration, development, and operational skills.
On the other end, Alexco also operates Alexco Environmental Group, an environmental consultation business offering remediation solutions and project management, assisting businesses with environmental permitting and compliance issues.
Alexco is tried and true company with years of experience, and an entire asset portfolio located in one country, Canada.
Alamos Gold Inc (TSE:AGI) is a Canadian mining monster. The company is engaged in exploration, development, and acquisition of precious metals. Alamos’ properties are spread across Canada and Mexico, and its gold operations are booming.
The company is nearly the $3-billion market cap level, and as the bitcoin boom slows, investors are returning to precious metals in a hurry. Don’t be fooled by Alamos’ dip in share prices, the company’s excellent leadership and stunning array of assets position Alamos ahead of the pack moving into 2018.
Wheaton Precious Metals Corp. (TSE:WPM) is Canadian precious metals streaming company, focusing primarily on gold and silver sales. The company produces a massive 26 million ounces of silver, and sells over 29 million, produced by the links of industry giants Barrick Gold and Goldcorp. The company’s agreements span across North and South America, with the majority being in Mexico. The company is relatively young, but has already made waves in the mining sector.
With a team of forward thinking industry heavyweights, investors can feel safe with Wheaton Precious Metals.
Kirkland Lake Gold Ltd. (TSE:CRK) is a Canadian mid-tier gold mining company with a focus on exploration and development. The company’s diversified portfolio includes assets in the politically welcoming Australian and Canada. Kirkland has had a mixed start to 2018, but some analysts are suggesting that the company’s stock may have a significant upside potential.
Kirkland is a consistent performer, and with its 3.35-billion market cap and fair dividends, investors can feel comfortable, especially as gold comes back into fashion.
**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**
Forward-Looking Statements
This news release contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this release include that Fura’s property can achieve mining success for quality gemstones; that the gems when produced will be high quality; that tastes will move away from diamonds to colored gems; that Fura will be able to increase production through modern methods and increase the value of its assets through branding and auction sales; and that Fura will be able to carry out its expansion and other business plans. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that the Company may not be able to finance its acquisitions, expansion or other business plans, aspects or all of the properties’ development may not be successful, mining of the gems may not be cost effective, changing costs for mining and processing; increased capital costs; marketing plans may not work out as well as expected; the timing and content of work programs may change; geological interpretations and technological results based on current data that may change with more detailed information or testing; potential process methods and mineral recoveries assumptions based on limited test work with further work may not be viable; additional high value gem properties may not be available for Fura to acquire, or Fura may not be able to afford them; competitors may offer better quality or better marketing strategies; the availability of labour, equipment and markets for the products produced; and despite the current expected viability of its projects, that the gems cannot be economically produced on its properties, or that the required permits to build and operate the envisaged mines cannot be obtained. The forward-looking information contained herein is given as of the date hereof and the Company assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
DISCLAIMERS
PAID ADVERTISEMENT. This communication is a paid advertisement and is not a recommendation to buy or sell securities. Safehaven.com, Advanced Media Solutions Ltd, and their owners, managers, employees, and assigns (collectively “the Company”) has been paid by the profiled company or a third party to disseminate this communication. In this case the Company has been paid by Fura Gems eighty thousand US dollars for this article and certain banner ads. This compensation is a major conflict with our ability to be unbiased, more specifically:
This communication is for entertainment purposes only. Never invest purely based on our communication. Gains mentioned in our newsletter and on our website may be based on end-of- day or intraday data. We have been compensated by Fura to conduct investor awareness advertising and marketing for TSX.V:Fura. Therefore, this communication should be viewed as a commercial advertisement only. We have not investigated the background of the company. The third party, profiled company, or their affiliates may liquidate shares of the profiled company at or near the time you receive this communication, which has the potential to hurt share prices. Frequently companies profiled in our alerts experience a large increase in volume and share price during the course of investor awareness marketing, which often end as soon as the investor awareness marketing ceases. The investor awareness marketing may be as brief as one day, after which a large decrease in volume and share price is likely to occur.
We do not guarantee the timeliness, accuracy, or completeness of the information on our site or in our newsletters. The information in our communications and on our website is believed to be accurate and correct, but has not been independently verified and is not guaranteed to be correct. The information is collected from public sources, such as the profiled company’s website and press releases, but is not researched or verified in any way whatsoever to ensure the publicly available information is correct. Furthermore, it is certainly possible for errors or omissions to take place regarding the profiled company, in communications, writing and/or editing.
DISCLOSURE. The Company does not make any guarantee or warranty about what is advertised above. This article and the information herein are provided without warranty or liability.
NOT AN INVESTMENT ADVISOR. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.
INDEMNIFICATION/RELEASE OF LIABILITY. By reading this communication, you agree to the terms of this disclaimer, including, but not limited to: releasing The Company, its affiliates, assigns and successors from any and all liability, damages, and injury from the information contained in this communication. You further warrant that you are solely responsible for any financial outcome that may come from your investment decisions.
RISK OF INVESTING. Investing is inherently risky. While a potential for rewards exists, by investing, you are putting yourself at risk. You must be aware of the risks and be willing to accept them in order to invest in any type of security. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell securities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.
All trades, patterns, charts, systems, etc., discussed in this message and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author and do not necessarily reflect those of the publisher.
