7 Top Mining Stocks in Gold, Silver and Copper

Many investment strategists believe most investors should have at least some exposure to metals, whether as a safe haven in troubled times, protection against inflation or simply as a chance to diversify one's bond and equity holdings. Here, several MoneyShow.com contributors highlight some favorite mining ideas in gold, silver and copper. Brien Lundin, Gold Newsletter Modern economies, built upon foundations of central bank proffered monetary adrenaline, are like addicts in need of ever-greater doses to get the same result. There seems little doubt that the trend toward easier money will only accelerate. So what are the implications? How should we prepare? The most obvious answer is to make sure we have plenty of gold. I won't pretend an ability to predict the exact path ahead. But, if the last rounds of QE brought gold to a new nominal high of $1,920, these new rounds should take it past the old 1980 high in real, current-dollar terms. And that means a gold price in excess of $2,800, or about 85% above the current levels. Whether gold declines into December or whether it's already resumed its bull run, the current valuations in the junior mining sector are extremely attractive. Among our buy recommendations, SSR Mining followed the broader market up this summer. And while it's given back some of those gains since August, its share price remains well up for the year. That only makes sense, given this company's penchant for delivering consistent production performance. SSR is an establish mid-tier producer, making it a first-off-the-shelf buy as general investors begin moving back into the precious metals space. The company released its third-quarter 2019 production numbers recently and demonstrated, yet again, its ability to deliver results. SSR's Marigold, Seabee and Puna Operations combined to generate more than 100,000 gold-equivalent ounces during the quarter. Its Marigold Nevada mine produced 52,968 ounces of gold during the quarter. The news was even better at Seabee. The Saskatchewan project had another record quarter of production, generating 32,345 ounces of gold. Recoveries were a robust 98.8%. Finally, the company's newly consolidated stake in the Puna Operations allowed that division's silver operations in Argentina to produce 1.7 million ounces of silver. With these third-quarter numbers, SSR Mining remains on pace to meet or exceed guidance for eight years running. That kind of consistency makes the company a go-to bet on gold's bright future. The company is a key component of our portfolio, and a buy at current levels. Mike Cintolo, Cabot Top Ten Trader Gold stocks had a great summer and have now been base-building for the past couple of months. If the group gets going again, we think Agnico Eagle Mines is one the best positioned, with some company-specific positives to go along with the benefit from higher gold prices. Really, it's a matter of perfect timing -- Agnico embarked on a massive CapEx wave in 2017 and especially 2018 (basically doubling spending over a couple of years) to advance some mines toward commercial stage, and now it's beginning to reap the benefit of that, with one new mine coming on-line in May and another just a couple of months ago. They won't be game changers, but Agnico's production has been creeping higher and should grow another 10% next year, with further smaller gains following that. Just as important, CapEx is tapering off, which means free cash flow and earnings are beginning to surge. Indeed, analysts see the firm's earnings nearly doubling next year, and management is also returning capital to shareholders with a 40% hike to its small dividend (yield now around 1.2%). Obviously, a drop in gold prices will put the kibosh on this story, but at this point the odds favor higher prices given the trends and some fundamentals. As far as gold stocks go, we like Agnico's solid, de-risked growth story. If you're game, you can start a position here and add to it if the recent strength continues. Adrian Day, Global Analyst Fortuna Silver is trading at a significant discount to other silver companies, almost entirely because of the Argentina risk. Its third mine -- located in Argentina -- will boost cash flow by 50% when fully operational, and is on track for its first pour in the first quarter of 2020. Results at its existing two mines continue to be soft, emphasizing the importance of Lindero -- and the Argentina risk. Production at San Jose in Mexico was down 12% on estimates, largely because of lower head grades, which pushed costs up. At Caylloma in Peru, lead and zinc production increased again, while silver output fell. The stock is cheap, trading a 0.8 times book, against twice that for Pan American , and an even greater discount against higher peers. There could be volatility, and around the $3.11 level we would add to positions. More likely, the stock will bounce, and the large short position, could see continued recovery in the days and weeks ahead, absent any economic policy pronouncements that spook the market. Jason Clark, The Prudent Speculator Shares of Newmont Goldcorp slumped over 7% last week after the price of gold retreated by 3.5% and the giant precious metals miner posted adjusted third-quarter EPS of $0.36, a penny light of analyst expectations. CEO Tom Palmer commented, Newmont Goldcorp generated $1,079 million in adjusted EBITDA and $365 million in free cash flow for the third quarter, building momentum for an even stronger fourth quarter. Despite the executive suite optimism, management also lowered its full-year production forecast from 6.5 million ounces to 6.3 million ounces as the company works out a few snags at properties acquired in the Goldcorp merger. On the other hand, as a testament to the Newmont's solid financial position, the company also refinanced its note due in October by issuing the lowest 10-year metal and mining coupon ever at a 2.8% rate. All things considered, we have fine-tuned our target price for Newmont Goldcorp to $45. We like the hedge provided by our modest exposure to gold, especially given volatile geopolitical and economic conditions around the globe. That said, we do acknowledge the complexities and obstacles inherent in the mining industry, so we continue to monitor Newmont's efforts to streamline operations and control costs as it integrates Goldcorp. Carl Delfeld, Cabot Global Stocks Explorer Commodities and commodity stocks also go through their own cycles and the big gains come to those who jump in when commodity prices are down and forming a bottom, or in the early stages of an uptrend. That's where many commodities are right now, including copper. The slowdown in global growth, particularly in China, has caused copper prices to slumber even though demand remains quite positive. Another attraction to investing in large mining companies right now is that they will provide some welcome international diversification and value; many also offer some nice dividends for much needed income. Let's look at three global mining stocks that could hit pay dirt if you have a little patience for the cycle to turn: The first is Phoenix-headquartered Southern Copper Corporation , which engages in mining, exploring, smelting, and refining copper and other minerals in Peru, Mexico, Argentina, Ecuador and Chile. The company is primarily involved in the mining, milling and flotation of copper ore. Southern Copper's share price has a good record of closely following copper prices so it is an excellent proxy for copper but much of its production is in Chile, which accounts for 28% of world copper production and is going through some turbulence as protests have captured headlines causing some investors to hit the pause button. Another idea is Freeport-McMoRan , which primarily produces copper as well as gold and molybdenum as by-products. The company owns and operates copper mines in the U.S., Peru, Chile and Indonesia. Freeport is the world's most significant copper producer, with very little Chile exposure. Its largest mine is the Grasberg mine located in Indonesia, representing the second-largest copper mine in the world. The Grasberg mine has entered a period of transition from open pit to underground mining and expects to see a net decline of about $1.1 billion in revenue in the next couple quarters as a result. Despite this period of transition and the weak copper price environment, I believe Freeport-McMoRan is an attractive long-term option for investors. The most conservative play may well be London-based Rio Tinto , the largest mining company in the world. Rio Tinto employs more than 47,000 people across 35 countries on six continents producing gold, diamonds, aluminum, copper, titanium, iron ore and other industrial and rare metals. Infrastructure, construction, communications, transportation, healthcare and green energy all rely on what Rio Tinto digs out of the ground and sells all over the world. In the first half of 2019, gross revenue rose marginally to $21.8 billion, cash flow from operations increased 22%, and earnings increased 12%. The company expects debt to fall 40% in 2019 and has $9.5 billion in cash on hand. The frosting on the cake is that its stock trades at only seven times trailing earnings and has a current dividend yield of 5.7%. So if you have some cash to invest and are looking to get ahead of the value commodity curve, these three global mining stocks would be a good place to start.

7 Top Mining Stocks in Gold, Silver and Copper

The big gains in commodities stocks come to those who jump in when commodity prices are down and forming a bottom, or in the early stages of an uptrend.

Columnist Conversation

This Weekend on Real Money

Friday Morning Fibocall for 10/22/2021

10-Year Note Yields

COLUMNIST TWEETS

Please Join or Log In to manage and receive alerts.