Time To Start Buying Mining & Gold Stocks?
This week a number of metals and mining stocks headed higher. This was at the same time broader sector stocks were caught slipping; literally. More confusion on a government stimulus in the U.S. paired with growing concerns around the coronavirus was a deadly team. The stock market was halted for its 4th time in 2 weeks thanks to circuit breaker provisions stopping trading when the S&P declined 7%. In addition to this, the market was undaunting in its flight to safety. Even precious metals stocks weren’t able to completely avoid the sell-off.
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However, mining and gold stocks faired much better than broader sector names. But in a sea of red, it could have been difficult to find the best mining stocks to watch right now. In such a situation, we saw it fitting to widen the scope to more than just gold stocks and include several precious metals and mining stocks to take a closer look at right now.
Gold Discovery Stocks To Watch: IMC International Mining
One of the top points of interest right now is finding lower-priced or bottomed out mining and gold stocks. While IMC International Mining (IMCX-Free Report)(IMIMF) is not considered a “bottomed out gold stock” it is traded below $1 right now. The company first began attracting attention earlier this year as shares managed to climb from $0.25 to highs of $0.50. Speculative sector activity helped push junior mining stocks like IMC.
However, later in the year, the business of the company became a targeted focus. Last month IMC announced plans to acquire Thane Minerals of British Columbia. Not only does Thane hold 100% ownership interest of a property called Cathedral, but it also has a strong leadership team. Through the latest acquisition deal, both could come to IMC International. What’s more is that in a March update, the company said it has plans to close on the acquisition by the middle of the month.
Considering the timing right now or both gold prices and dates in March, this could be an important time to have IMC on the watch list. Furthermore, Thane’s Cathedral asset could bring more strength to IMC’s current asset portfolio. Cathedral is located in the Quesnel Terrane. This area in British Columbia is how to past and planned production. These are numbers that rival some of the top producing regions in the world.
Rider: It is noted that the results of nearby or adjacent properties are not necessarily indicative of the potential of the Cathedral property and should not be understood or interpreted to mean that similar results will be obtained from the Cathedral property.
Mining Stocks To Watch: Fortuna Silver Mines Inc.
Shares of Fortuna Silver Mines Inc. (FSM-Stock Report) headed higher on Wednesday. Similar to most precious metals stocks, FSM retreated from 2020 highs at the end of February. This week, after hitting new 52-week lows, Fortuna Silver stock began to reverse in trend. From $1.47, the silver stock managed to rally to highs of $2.59 this week. Even after pulling back to a $2.27 close on Tuesday, the mining stock headed high still, on Wednesday to highs of over $2.37.
In the company’s last update, Fortuna provided insight into its handling of the COVID-19 situation. The company stated, “Each of our sites’ management teams at the San Jose Mine located in Mexico, the Caylloma Mine located in Peru, and the Lindero Project located in Argentina are continually assessing the situation as it evolves and are implementing business continuity measures to mitigate the potential impacts of COVID-19 on the Company’s operations. The Company has postponed all non-critical capital projects and has temporarily suspended all Greenfields and Brownfields exploration activities.”
This move comes right after Fortuna reported an earnings beat earlier this month. Its full-year sales came in just above $257 million while net income was recorded at $23.8 million. Fourth-quarter net sales came in strong as well. Fortuna realized a nice boost to $69 million compared to $59.6 million during the same period in 2018.
Mining Stocks To Watch: SSR Mining
Another one of the mining stocks to watch this week was SSR Mining (SSRM-Stock Report). Shares of the gold mining stock reached highs of $13.94 on Wednesday after climbing back from weekly lows of $9. In its most recent earnings report, Paul Benson, President, and CEO said, ” SSR Mining had another successful year in 2019 as we continued our track record of achieving production and cost guidance for the eighth consecutive year.”
“We delivered reserve growth at Marigold and resource growth at Seabee, which continue to support mine life extensions at both assets. Looking ahead, 2020 consolidated production is forecast to grow to approximately 425,000 gold equivalent ounces.”
Despite this, analysts were mixed on the company’s stock. For example, B. Riley lifted its price target on SSRM to $26 giving it a Buy rating. At the same time, Canaccord Genuity downgraded the mining company. It cut its rating from Buy to Hold. Among most analysts, the average rating as of February was a buy with an average price target of $21.
Mining Stocks to Watch: MAG Silver Corp
Finally, MAG Silver Corp (MAG-Stock Report) made a similar move this week as SSR Mining. On Monday, the mining stock hit lows of $3.84. Over the course o the week so far, this mining stock was able to move back to highs of over $8.60 by Wednesday.
The recent drop in oil prices could bode well for mining companies across the board. Energy costs remain one of the largest for miners. On March 18 the price of oil fell to a more than 18-year low.
Earlier this month the company made a new update on its Juanicipio Joint Ventures Property. Among other things, the company discovered 2 new veins on the property. George Paspalas, President and CEO of MAG explained that “the discovery of more northeast-trending veins close to the planned production areas, coupled with the expanding high-grade Anticipada and Pre-Anticipada veins, should add significantly to the growing mineral endowment of the project and, importantly, provide considerable mining flexibility throughout an extended mine life.”
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