Penny stocks and small-cap stocks, in general, tend to move up no matter what broader markets are doing. This doesn’t mean that all penny stocks are independent of bigger trends, however. Take the mining industry, for instance. Gold, silver, rare earths, and even energy metals all tend to be a target of interest among investors this year.
Whether it’s because they’re seen as safe havens or part of a growing ecosystem (relating to energy metals), the same ideas hold true. When these niches experience momentum so do the stocks within them.
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We’ve seen this a lot when it came to gold and gold stocks earlier this year. Companies that had exposure to mining, refining, selling, and the like surged as gold prices rallied. Some of these companies hadn’t released news of their own in months. Additionally, some companies that simply had the word “Gold” in their name surged with the broader trend.Mining Stocks To Watch
- Walcott Resources Ltd.
- Taseko Mines Limited
- New Gold Inc.
- PureGold Mining Inc.
- Synalloy Corporation
This is something that mining stocks, as a whole, have demonstrated this year. A mix of economic uncertainty in one discussion with talks of industry growth in another helped boost this sector as a whole. With another round of new, record COVID cases this week, traders are back to looking for mining stocks as safe havens.
Something to note if you’re new to mining is that when the industry itself experiences a surge, the smaller stocks tend to outperform larger ones. In light of this, mining penny stocks are some of the most sought after. Will any of these be on your list before November?Mining Penny Stocks To Watch #1: Walcott Resources Ltd.
Walcott Resources Ltd. (OTC : WALRF Stock Report)(CSE : WAL) has just recently begun trading on the U.S. exchanges. For the most part, Canadian traders had gotten to see the first stages of this company as it first began trading on the CSE earlier this year. Fast-forward to recent and Walcott has reached several key milestones that could put it on the list of top mining stocks to watch right now. Why? Earlier this month Walcott closed the acquisition of 60% in 1256714 B.C. Ltd. The B.C. company owns a 100% interest (subject to a 2% NSR) in two prospective silver-zinc projects in Australia, being the Tyr Silver Project and the Century South Silver-Zinc Project.
In this case, the controlling interest in here gets Walcott direct access to a prime location in one of the most prolific silver production areas in the world. While Mexico has long-been known as a top silver producing country, the untapped potential could rest within 3 countries. According to data from Statista, Peru, Poland, and Australia are the top 3 countries holding the largest silver reserves in the world.
Walcott is taking Australia head-on with a specific focus on this primary silver asset in New South Whales. High-grade zinc-lead-tin mineralization has already been identified. Walcott plans to re-open two historic silver mines with conservative inferred resource estimates and many high-grade surface mineral occurrences up to 4,710 grams per ton of silver (g/t Ag).
To put this into perspective, Buenaventura’s Uchucchacua mine, located in Peru, is the highest-grade silver mine in the world. It holds reserve grades of 445 g/t Ag. Furthermore, looking locally, South 32’s Cannington Mine produces 6% of the world’s silver; it has a measured mineral resource of 56Mt @ 193 g/t Ag.Mining Penny Stocks To Watch #2: Taseko Mines Limited
Taseko Mines Limited (NYSE : TGB Stock Report) (TSX : TKO) is another one of the mining stocks to watch right now. Not only has the penny stock been climbing higher for the last 7 months, recent financial results have helped boost TGB stock further.
This week the company reported its financial position and results for the third quarter. Among key financials, Taseko recorded $32 million of adjusted EBITDA for the quarter. Furthermore, its EPS came in at a loss of just $0.02 compared to last year’s Q3 EPS loss of $0.08.
“The price of copper continued its recovery in the third quarter, with the price increasing from an average of US$2.43 in the second quarter to just under $3.00 in the third quarter. This copper price gain contributed to our strong EBITDA and cash flow generation. Taseko’s cash position further increased this quarter to $73 million , up $9 million from the end of June. Sales for the quarter were 29 million pounds and we generated a healthy operating margin of nearly 40%.”Stuart McDonald , President of Taseko
The mining stock dipped early in the Tuesday session but has since managed to bounce back above the $1 level. Barring any previous coronavirus set-backs, annual production guidance remained unchanged for 2020.Mining Penny Stocks To Watch #3: New Gold Inc.
New Gold Inc. (NYSE : NGD Stock Report) is another one of the top-performing mining stocks to watch this year. Since March, NGD stock has climbed from lows of $0.39 to recent highs of $2.28. It’s also one of the small-cap gold stocks that’ve performed closely with the price of gold and not so much, solely from its fundamental performance. This isn’t to say that New Gold is underperforming. In fact, the company reported its Q3 results earlier this month showing a strong performance for the quarter.
New Gold’s production was over 115 thousand gold equivalent ounces while remaining on target to deliver free cash flow generation starting next year. What’s more, is that the company’s Rainy River mine achieved record mine and mill productivity. It’s also worth mentioning that New Gold was able to redeem its outstanding 6.25% senior notes due in 2022 as well as transferring $90 million in letters of credit to related mine closure costs to surety bonds. This increased the company’s available funds under the credit facility.
“As we enter the final quarter of the year, we will continue to build on the progress made during the year as we position the Company for the future and deliver free cash flow generation beginning in 2021.”Renaud Adams, CEOMining Penny Stocks To Watch #4: PureGold Mining Inc.
Pure Gold Mining Inc. (OTC : LRTNF Stock Report) (TSXV : PGM) popped higher on Tuesday. While the general trend for 2020 as been bullish, the recent surge resulted in one of the biggest 1-day moves that the mining stock has seen in weeks. PureGold announced that surface exploration drilling near its PureGold Mine yielded positive results.
The latest drill holes confirmed the exceptional grades of the gold mineralization in its Wedge resource area, according to PureGold. These, it said, support continuity of high grade gold mineralization across the entire seven-kilometer long gold system. This also confirmed high grade gold in mine stopes scheduled for early production.
The drilling results showed that one intersect includes 1,147 g/t of gold over 1.2 meters from underground. There were also surface drilling grades as high as 66.3 g/t gold over 1 meter. In light of these results, LRTNF stock jumped over 10% on Tuesday, further extending the penny stock’s recent uptrend.Mining Penny Stocks To Watch #5: Synalloy Corporation
It’s not often we see metals and mining stocks with low floats. But Synalloy Corporation (NASDAQ : SYNL Stock Report) is one of the exceptions to the rule. It has fewer than 10 million shares outstanding and some sites show the float below 8 million. By all definitions, this is one of the low float penny stocks to watch.
The company is part of the last steps in the “mining ecosystem”. Synalloy produces stainless steel and galvanized pipe and tube. This week, the company saw its highest trading day of the year after a key milestone. Synalloy announced the retirement of its president and CEO, Craig Bram. A current board member, Christopher Hutter will become the interim president and CEO.
This was seen as a positive for the company as this was one of the first meaningful green days this stock has seen in quite some time. While the future is still uncertain, this news helped spark a rally so far of more than 20% on Tuesday.