Mining stocks represent equity ownership in the firms that pull metals and minerals from the ground. When the prices of those commodities and the end products they are used to produce rise, mining stocks tend to explode upward in price. That’s the value of being near the source: You can receive the greatest gains.
Currently, several metals and minerals look very promising. Prices continue to trend upward as many factors conspire in gold’s favor. Gold, along with other metals, promises to create strong gains currently.
Wheaton Precious Metals (WPM)
Wheaton Precious Metals (NYSE:WPM) will remain a strong stock consideration in the mining sector. The Canadian firm is a streaming company meaning it doesn’t own or operate mines at fixed prices.
Instead, the company purchases production from mines at an upfront price and then pays additional fees upon delivery of the mines’ production. Wheaton Precious Metals currently owns the rights to 19 streams, 21 operating mines and 13 development stage projects. It’s very diversified in that sense.
Wheaton Precious Metals is also diversified through a vast geographical footprint of streaming rights that is globally dispersed. Those mines are considered to be high margin with 90% of its current production coming from mines operating on the lowest half of the production curve. Further, what’s particularly positive about Wheaton and other streaming firms at this point is that their contractually defined costs tend to shield them from broad inflationary pressures. The firm is protected there but it is also exposed to expansion and exploration upside simultaneously. Streaming firms make sense due to the current macroeconomic environment with Wheaton Precious Metals being particularly strong.
B2Gold (BTG)
B2Gold (NYSEMKT:BTG) is another Canadian mining firm and stock that is strong currently. The firm is focused on low-cost gold production and operates mines in Mali, Namibia and the Philippines with a project under development in Nunavut. The company is also engaged in exploration projects in Finland, Mali and Colombia.
B2Gold’s second quarter production of 262,701 ounces of gold was in line with projections. Its operating costs per ounce, at $667, was below the annual guidance range. That’s very important for a few reasons. First, it’s plainly good business. Further, it also reinforces B2Gold’s reputation as one of the lowest-cost producers.
B2Gold saw its revenues and income swell during H1 of 2023. Average realized gold prices increased while production increased. The company is on track to improve in 2023 following a strong performance in 2022. Investing in its shares exposes holders to upside of approximately 65%, a modest dividend and a generally positive business performance overall.
Newmont (NEM)
Newmont (NYSE:NEM) is a gold mining stock. In fact, it’s the largest of the gold mining stocks, producing more gold than any other miner in 2022. It has been and continues to be a strong performer and its scale gives it advantages that other firms cannot compete with.
The company recently got even larger. In May, the firm announced that it had agreed to purchase Newcrest (OTCMKTS:NCMGY) for $17.5 billion. That was the biggest ever deal of its kind. On October 11, shareholders overwhelmingly approved the acquisition. Newmont also produces copper, which is subject to positive secular trends, as it is an excellent conductor used in electronics.
Newmont remains on track to close that deal. It released earnings on October 26 that showed the company’s production is steady, earnings increasing and cash flows positive. NEM shares look to get stronger after the Newcrest deal is finalized and it’s simply doing well otherwise.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
