Which Mining Penny Stocks are Investors Watching Right Now?
Mining stocks have continued to present interesting alternative options for investors to consider. While there are a lot of mining penny stocks to watch, all are quite different in the ways they operate. As we head into a presidential election, there could be some big changes for mining stocks. The best-case scenario is that a global economic recovery ensues, leading to greater demand for mined ores. In the past six months, the mining industry has seen some troubles regarding the COVID pandemic. Although mining is a relatively Covid-safe operation, demand for raw materials has not been as great as in years prior.
But, if economies are able to expand as the pandemic weakens, we could see a rebirth of industrialization and thus, a need for more mined materials. When searching for mining stocks to watch, investors should first understand their own investing style. While there are more volatile mining stocks, the majority of investors are looking for longer-term investments.
This is because in the long term, mining stocks tend to have a better chance of showing bullish potential especially during times where quantitative easing is a big factor. This is not to say that swing traders should avoid mining stocks, but rather investors should find the right option for their portfolio. With this in mind, here are five mining stocks to watch for election week.
Mining Stocks to Watch
- Walcott Resources Ltd. (WALRF Stock Report)
- Iamgold Corp. (IAG Stock Report)
- McEwen Mining Inc. (MUX Stock Report)
- New Gold Inc. (NGD Stock Report)
- Taseko Mines Ltd. (TGB Stock Report)
Mining Penny Stocks to Watch #1: Walcott Resources Ltd.
Walcott Resources Ltd. is an interesting mining penny stock that recently began trading on the U.S. OTC exchange. Before this, WAL stock was only accessible to those trading on the CSE. In the past six months, Walcott Resources has been making some major strides in the mining industry. Recently, the company closed on the acquisition of 60% of 1256714 B.C. Ltd. this transaction gives Walcott access to two high grade silver-zinc projects in Australia. The two mines within the project are known as the Tyr Silver Project and the Century South Silver-Zinc Project.
The Tyr Project has brought a great deal of critical appeal to Walcott Resources as it has major potential to be high producing mine. The project, which is based in Northern New South Wales, holds within it two historic silver mines known as Burra and Torny. These mines have both shown high-grade silver zinc-lead-tin mineralization within.
In addition, the Century South Silver Zinc project is located in an area renown for silver and zinc mining. Australia has continuously been noted as one of the top three countries with the largest silver reserves in the world. Why should this matter? Conservative estimates in Walcott’s mines show that there are high-grade surface mineral occurrences up to 4,710 grams per ton of silver (g/t Ag). For those who are not familiar, this is a very sizeable quantity of surface mineralization. If we look at the Uchucchacua Mine in Peru which holds the title for having the highest-grade silver in the world, we see that it only has reserve grades of 445 (g/t Ag).
Mining Penny Stocks to Watch #2: Iamgold Corp.
Iamgold Corp. is a company that engages in the exploration, development and production of gold and other mineral resources around the world. If we look at Iamgold Corp. from a financial perspective, it’s hard to avoid the high debt amount that it has. As of June, the company stated that it holds $411 million in debt.
While this may seem scary to some, often times debt is used as a tool for expansion. In addition, we see that Iamgold Corp. holds around $838 million in free cash, which should make investors more comfortable with this debt amount. With a value of $1.85 billion, it looks like this debt amount is not nearly as confining as investors may have previously thought.
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After hitting a high of almost $5 in mid-August, shares of IAG stock have since corrected to the $3.75 level as of November 3rd. YTD, IAG stock has stayed at the $3.80 mark, leading to a gain of around 1%. While this gain is not something to write home about, it is indicative of a larger stability in Iamgold shares. And with so many investors looking at mining penny stocks as a stable investment, IAG stock could be the right one to watch. But, for those who want a more volatile mining penny stock, they may have to wait for the longer term.
Mining Penny Stocks to Watch #3: McEwen Mining Inc.
McEwen Mining Inc. is a producer of gold and silver ore that works in several locations around the world. The company states that it holds operating mines in Nevada, Mexico, Argentina and Canada. Recently, the company announced its production for the 3rd quarter of 2020. In the report, the company stated that it produced around 23,100 gold ounces and 575,000 silver ounces. After the second quarter led to slowed production due to Covid, the company has since been able to get production back on track. Recently, the company announced that it had completed a flow-through financing deal. This deal, completed on September 10th, gives McEwen the funds to further its exploration in the Timmins region.
The goal is to use the funds raised across the next 1-2 years with two targets known as Stock West and Whiskey Jack. These mines have shown very solid results in the past and could show even more in the near future. Similarly to IAG stock, in the past six months, shares of MUX stock have stayed at relatively the same level. After hitting a high in mid-August, shares of MUX have since corrected to around there $1 mark. This correction which saw MUX stock lose over 30% of its value, means that MUX could be on the cheaper side. If investors believe in the long term potential of McEwen Mining, MUX stock could be a solid mining penny stock to watch.
Mining Penny Stocks to Watch #4: New Gold Inc.
New Gold Inc. is another major gold producer with several mines around the world. In its most recent second quarter results posted on June 30th, the company announced some exciting updates. During Q2, New Gold Inc. stated that Ito had closed on the divestment of the Blackwater Project for around CA$190 million in cash and an 8% gold stream. In addition, it also stated that it has worked on the restructuring of its balance sheet with a $400 million bond offering.
This bond offering will be complete by 2027, and will also serve to pay back senior debt notes that are due in 2022. While the company did see some downsides due to Covid, it has worked to move beyond this. In the quarter, the company produced revenue of $129 million. This totals to $271 million for the past six month period.
In addition, the company has been able to produce gold at $773 per ounce which is quite low for a gold producer. Additionally, the company was able to produce around $53 million in cash totaling to $104 million for the six-month period ending on June 30th. As stated before, the Blackwater divestment should help the company to put funds into other revenue-producing assets. In the past six months, shares of NGD stock have shot up by a staggering 130%. This is quite substantial and should not be ignored by investors. With its solid performance and future plans in consideration, NGD stock continues to be a mining name to watch.
Mining Penny Stocks to Watch #5: Taseko Mines Ltd.
In the past six months, shares of Taseko Mines’ stock have climbed by more than 185%. This has signaled a lot of investors to take note of TGB stock during that time. In addition, the company has been able to post solid financial results. These results have helped to push its share prices higher. In mid-October, Taseko Mines announced $32 million in adjusted EBITDA for the quarter. With an EPS loss of $0.02, Taseko has worked to avoid major troubles from the Covid pandemic.
Stuart McDonald, President of Taseko stated that “the price of copper continued its recovery in the third quarter, with the price increasing from an average of $2.43 in the second quarter to just under $3 in the third quarter. This copper price gain contributed to our strong EBITDA cash flow generation. Taseko’s cash position further increased this quarter to $73 million, up $98 million from the end of June.”
Since the beginning of November, shares of TGB stock are up by around 4%. While this may not seem like a major gain, it is indicative of bullish sentiment surrounding TGB stock. The company currently operates several mines around the world. This includes the Gibraltar Mine, the Prosperity Mine and more. Because of its diversified assets and solid performance, investors continue to watch TGB stock for both the short and long term.