Could these mining stocks rally next month? 3 to keep your eye on
As the economy dropped in value last year, investors put lots of money into mining stocks. Often when the value of the dollar and economy drops, metals such as gold and silver will increase in worth. Due to the economy losing so much value, gold and silver saw the largest-ever rally in their history in mid-2020.
The prices of gold and silver were down last week, likely due to the stock market as a whole being bearish. Some believe that if gold stocks and silver stocks are underperforming then the mining sector should be avoided altogether. On the other hand, there are many mining stocks to watch that are unrelated to those two precious metals.
Gold prices have been unable to reach past the $1,800 per ounce point throughout all of April. There is a lot of pressure about inflation at the moment due to the large amount of government stimulus. Yet the price of gold has still not been able to push higher in the market. This has confused investors, and given some the sense that the metal could fall in value soon. The gold market can often be confusing and this speculation may not be accurate, but it is something to consider when investing.
Iron ore is also showing high performance at the moment as well. In fact, on Tuesday, April 27th iron ore prices reached a new record high at $193.85 per ton. For this reason, many iron ore stocks are performing well. Prices climbed because of huge demand for the metal in China in particular. As 2021 continues we will see what happens with mining stocks amid the world’s reopening. Keeping this in mind let’s look at three that could potentially benefit in May.
Mining Stocks To Watch In May
- Hecla Mining Company (NYSE: HL)
- Osisko Gold Royalties Ltd. (NYSE: OR)
- Cleveland-Cliffs Inc. (NYSE: CLF)
Hecla Mining Company
One mining stock that saw significant progress in the stock market over last year is Hecla Mining Company. The company focuses on the discovery and production of precious metals. Some of its offerings include unrefined gold and silver bullion bars, lead, and zinc. Some of the mines that Hecla operates include the Greens Creek mine, Lucky Friday Mine, and Casa Berardi mine among others. HL has not necessarily had the best 2021 so far. This could change soon as analysts at Zacks Equity Research predict that its earnings will grow in its upcoming financial report.
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HL stock is nearly a dollar less than it was when 2021 started. Hecla experienced a good amount of momentum around in April but fell off towards the end. Its last significant update was on April 8th when it reported its preliminary silver and gold production for the first quarter of 2021. Its silver production grew 7%, while its gold production fell 12%. On the other hand, Hecla’s zinc and lead production went up by 25% and 82% respectively.
The President and CEO of Hecla Phillips S. Baker Jr. stated, “This is our fourth consecutive quarter of increasing cash balances, all attributable to free cash flow generation.” Now Hecla plans to release its full first quarter financial results on Thursday, May 6th. Could this be when HL stock makes a 2021 comeback?
Osisko Gold Royalties Ltd.
Osisko Gold Royalties Ltd. is a gold company that will acquire and manage precious metal royalties and streams. The company is also involved in exploring and developing mining projects. Its main asset is with the Canadian Malartic mine in with it has a 5% net smelter return royalty.
Osisko’s latest update comes from April 22nd, when the company announced the acquisition of four royalties over the Spring Valley project. It also announced the acquisition of 1 royalty over the nearby Moonlight Project. This will increase its net smelter return royalty on Spring Valley from 0.5% to 2.5%-35. Acquisitions can be good for a company as they show the desire to expand and improve business.
The CEO and President of the company, Sandeep Singh stated, the acquisition of additional royalties on the Spring Valley project will add additional exposure to a high quality asset in a proven mining jurisdiction. It has the potential to become a significant North American gold mine and builds on our already strong growth profile.”
Earlier this month Osisko reported its preliminary first quarter deliveries. In this first quarter, the company earned 19,960 attributable gold equivalent ounces. This delivery was much higher than the company’s original expectations. Now Osisko plans on increasing production at its Eagle mine which could result in more financial gain for the company. It will be interesting to see how this gold stock that grew a lot in the last year will perform amid the 2021 climate.
As iron ore demand increases and prices climb, Cleveland-Cliffs Inc. is performing well as a result. The company focuses on iron ore mining. It operates the Tilden mine and Northshore and United Taconite mine. Cleveleland-Cliffs produces iron ore pellets for use in the automotive, industrial, and groundwork sectors.
One week ago the company reported its first quarter results for 2021. This is important as reports like this often have an impact on a company’s stock price. Cleveland-Cliffs’ first quarter consolidated revenues were $4 billion, compared to $359 million year over year. Its full-year adjusted EBITDA guidance has been increased from $4 billion, up $500 million from its previous guidance.
The President and CEO of Cleveland-Cliffs, Lourenco Goncalves said, “Our expectation of $4 billion in adjusted EBITDA for the full year is predicated on conservative pricing expectations relative to today’s pricing and the current forward curve.”
With such a positive outlook, it is no surprise that CLF stock has an upwards trajectory. Considering the company’s stronger outlook, this could be one of the mining stocks to watch in May.
Mining Stocks In May
While mining stocks performed very well throughout 2020, things are changing this year. We are nearly halfway through 2021 already, and many niches within the mining industry are not performing as well as last year. What is important for these companies is the fact that many materials are staying within a certain price range rather than drastically falling in price. On the other hand, some materials like iron and copper are on the rise. This is why there are still plenty of mining stocks to watch in May.
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