The basic materials sector is vast and includes a wide range of stocks in all price brackets. In focus right now are penny stocks within the sector. The recent excitement surrounding global trade talks have helped bolster stocks.
What Is The Basic Materials Sector? A Brief Overview
Before we get into the penny stocks making big moves this year, let’s give a brief overview of the sector. The basic materials sector involved companies that discover, develop, and process raw materials. This includes companies that take part in mining and metal refining, chemical products, and forestry products.
Comstock Mining (LODE)
Get a load of LODE. Comstock Mining (LODE – Get Report) is based in Nevada and mines gold and silver. The company has been buying up property since 2003 and building the single largest known repository of current and historical geological data on the Comstock region. For the better part of the last 2 weeks, this penny stock has been on the move. Price has consistently improved from a March 18 low of $0.1551 to recent highs of $0.2248.
Why have shares of Comstock Mining taken off? There are a few things to take note of in this case. First, there are serious fears of a global economic slowdown. During times like this, investors seem to flock to “safe haven stocks,” which include things like gold and silver. With bond yields also feeling the pain, anything related to gold or silver seems to have seen price appreciation.
In addition to this, Comstock recently announced that it had received another $1 million payment (which is non-refundable) toward the sale of its Lucerne properties to Tonogold Resources (TNGL – Get Report). Earlier this year, the two entered into a definitive agreement where Tonogold would pay $15 million cash, $8 million in obligation relief, as well as other expenses & royalties to Comstock.
This company is on the different end of the spectrum when it comes to penny stocks in the basic materials sector. Ur-Energy (URG – Get Report) is a uranium company that operates a facility in south-central Wyoming. Tuesday, April 2, the company will be presenting at the Spring Investor Summit in New York City (formerly known as The MicroCap Conference).
Shares of the penny stock have been climbing since and much of the move may have to do with its latest earnings.
“I am pleased to advise that, during 2018, we generated $11.3 million in gross profits, reported positive earnings of $0.03 per share, and built our inventory position to over 375,000 pounds of finished, ready to sell, product. We achieved these results while at the same time maintaining a perfect safety record of no lost-time accidents at Lost Creek. Our people made this all possible through their dedication and hard work, and I would like to express my thanks for their many contributions.”Ur-Energy CEO, Jeff Klenda
The company guided that it expects to sell half a million pounds under term contracts at an average price of $49 per pound in 2019. Ur-Energy also is anticipating gross profit for the year to be somewhere around $11.5 million from the sale of purchased product. We’ll see what these figures look like in a few months, for sure.