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Five precious metals stocks to keep tabs on this summer

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As expected, inflation is picking up around the world, and with equity markets selling off, investors are finally starting to revisit precious metals. Cryptocurrencies, once touted as a refuge from inflation, have disappointed. Gold and silver bulls continue to load up on bullion stocks however, and it is rapidly turning into a buyer’s market out there.

Mining stocks themselves have been hit by a recent spate of selling, but gold in particular is being seen as a suitable investment bolt hole, with a record $11.3bn flowing into gold ETPs (exchange-traded products) in March alone. The gold continuous contract was hovering at just under $1800 at time of writing, which is seen as something of a key support at the moment. Gold miners are currently trading are some amazing valuations. Below we look at five:

#1. Fortitude Gold (OTCQB:FTCO)

Armchair Trader favourite Fortitude Gold is an explorer and producer of gold focused on its Isabella Pearl mine in Nevada. It currently trades OTC only but pays out a hefty dividend which still looks great at the current sky high inflation numbers. The company has an experienced management team that previously ran Gold Resource Corp in Mexico. Fortitude Gold has no long term debt and reported USD 15m in net sales and USD 2.6m in net income (Q1 results reported May 2022). Fortitude also owns 100% interest in five other prospective gold properties with surface or near surface gold present. This includes its Golden Mile and its East Camp Douglas projects, both within 30km of Isabella Pearl. The company is currently engaged in initial exploration of Golden Mile, yielding 10.26 g/t Au (36.6m from 15.2m). It has an indicated high grade gold resource of 2.16m tonnes at 1.13 g/t and an inferred resource of 2.4m tonnes at 1.10 g/t.

#2. OceanaGold Corp (ASX:OGC)

OceanaGold explores for gold, copper, and silver deposits. The company operates the Didipio gold-copper mine located in the Nueva Vizcaya and Quirino provinces on the island of Luzon in the Philippines; the Macraes goldfield mine on the South Island of New Zealand and the Waihi gold mine on the North Island of New Zealand; plus the Haile gold mine located in South Carolina. The PE ratio is currently at 18.7, down from 23.2 at last filing date. OceanaGold has recently reaffirmed production guidance for 2022. Sales and net income are both way up based on its  31 March 2022 numbers, and the cash position also looks extremely solid. The share price has come off somewhat and while MACD looks poor, we are anticipating a rally in this one, especially if the price reaches somewhere in the region of 1.62 – 1.85.

#3. Skeena Resources (TSX:SKE)

Skeena explores and develops mineral properties in Canada. The company explores for gold, silver, copper, and other precious metal deposits. It holds 100% interests in the Snip gold mine comprising one mining lease and four mineral tenures that covers an area of approximately 1,932 hectares; and the Eskay Creek gold mine that consists of eight mineral leases, two surface leases, and various unpatented mining claims, which total 6,151 hectares located in British Columbia, Canada. Like other gold miners the stock has slumped in 1H, giving up a lot of the territory the company made when the stock soared to greatness in Q2 2020. Prior to the recent decline, Skeena stock had held value at about 11 bucks Canadian, which shows plenty of support from investors. There were some big sellers in the stock in May, but the fundamentals still look excellent, and technicals are now indicating it will soon be heavily over-sold.

#4. AltynGold (LSE:ALTN)

AltynGold, together with its subsidiaries, engages in the exploration and development of gold doré properties that contain gold and silver mineral deposits in the Republic of Kazakhstan. Its flagship asset is the Sekisovskoye gold mine located in North East Kazakhstan.  This is a small miner with a market cap of USD 23m. The last earnings report was an impressive one, with sales to the year ended 31 December 2021 of USD 50m vs USD 30m a year ago. Net income has also mushroomed. The company is headed in the right direction regarding EBITDA, exhibiting efficient capital controls and strong overall financial performance. There has been little in the way of news flow from AltynGold since its last set of results. We have reached out to management for an update.

#5. Breaker Resources (ASX:BRB)

Breaker Resources discovers, develops, and explores for gold and copper deposits in Western Australia. The company holds 100% interest in the Lake Roe & Ularring Rock projects comprising nine exploration licenses that cover an area of approximately 1,000 square kilometers. We have not been seeing much activity in the stock price recently, and the shares are well down on where they were a year ago. The current market cap is AUD 63m.  There has been a bit of a reshuffle at the top of the firm, with Lisa Wynne coming in as new CFO. This is not just a pure gold play – e.g. further lithium exploration announced at its Lake Roe Gold project in May. But the fundamentals look solid on this one.

With thanks to Deshe Analytics for assistance with the number crunching on this article.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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