Mining stocks are crucial to the world economy in several ways. While the factors that make mining stocks rise may be different from other areas of the stock market, there are several similarities. When economies are doing well, expansion tends to follow quite quickly. For any expansion to occur, raw materials are a necessity. In 2020, global economic expansion did slow down earlier in the year due to COVID. In October however, we have seen that many countries are beginning to expand economically once again.
If we use the past as a guide for the future, we see that periods of economic turmoil often lead to major economic booms. The global economic slowdown that we have seen from the coronavirus pandemic has only lasted a few months at this point. Because of this, investors are beginning to see renewed interest in mining stocks.
Mining stocks are the backbones of economic growth. Additionally, mining is a relatively Covid-proof industry in that it does not require close contact to be conducted. This means that mining operations have been able to continue producing during the pandemic. Because of Covid, investors may be able to find mining stocks to buy that may be below their book values. With this in mind, let’s take a look at four mining stocks for October 2020.Mining Stocks to Watch:
- Walcott Resources Ltd. (CSE: WAL Stock Report)(OTC: WALRF)
- Barrick Gold Corp. (GOLD Stock Report)
- Fortuna Silver Mines Inc. (FSM Stock Report)
- Kinross Gold Corp. (KGC Stock Report)
Walcott Resources Ltd. is one of the mining stocks focused on silver. While it does trade on the Canadian Stock Exchange, U.S. investors have just recently gained exposure to the company. Although silver on its own can have growth potential, most precious metals have a high correlation with gold. With gold prices rising higher and higher, investors have continued to show bullish sentiment with silver stocks. Walcott Resources’ primary mine known as the Try Project, is based in Australia.
This project has shown a very high amount of zinc-lead-tin mineralization during past drilling operations. More recently, however, Walcott Resources has worked to open two historic silver mines within the project. Some estimates for these mines show that it could yield around 4,710 grams per ton of silver ore.
Recently, Walcott announced that it had closed on a brokered private placement of its common shares. The deal, worth around $2.86 million, consists of 11,463,000 million common shares. Walcott stated that it plans to use the proceeds for further expansion of several mining projects. Furthermore, Walcott’s mines are situated near already top-producing mines and could intersect some of the area’s richest mineralization systems. This could prove to be a major point of focus as the company begins its mining plans for Tyr.Top Mining Stocks to Watch #2: Barrick Gold Corp.
Barrick Gold Corp. is one of the most popular mining companies in the world due to its high market value. The company has stated that its trajectory is based on operating what it calls, Tier One mining assets. The company states that these are assets that are producing more than 500,000 ounces of gold per year as well as having more than 10 years of mining life left.
This goal should help the company to move forward with its long term goals. One of the intriguing parts of GOLD stock is that it is usually quite stable. The company has stated that it aims to continue producing around 5 million ounces of gold for the next decade or so.
In addition, utilizing the concept of Tier One assets means that it is able to push lower prices and higher margins than most of its competitors. With the price of gold increasing and Barrick Gold’s operating costs decreasing, the company looks like it is in a solid position for growth.
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It has also stated that it aims to lower its cost per ounce of mined gold from $1,000 this year to around $800 within the next four years. Due to its size and the time that the company has been operational, it has managed to show a very stable balance sheet. With all of this in mind, Barrick Gold remains a leading gold and mining stock to watch for October.Top Mining Stocks to Watch #3: Fortuna Silver Mines Inc.
Fortuna Silver Mines Inc. is a Canadian-based mining company with mines spanning across the Western Hemisphere. Currently, the company has mines in Peru, Argentina and Mexico. The company has stated that one of its primary business principles is creating mined materials utilizing sustainable methods.
Recently, the company announced its third-quarter results from its two operating mines in South America. This includes the San Jose Mine in Mexico as well as the Caylloma Mine in Peru. So far in this quarter, the company has produced roughly 2.1 million ounces of silver and around 12,791 ounces of gold.
For the 2020 year so far, the company has produced more than 5.2 million ounces of silver and almost 30,000 ounces of gold. Although production was slowed earlier in the year due to Covid, the company has been able to resume the majority of its mining operations.
In its latest third quarter, the company also announced that it has produced 10% more than the same quarter of the previous year. In addition, the price of mining has decreased substantially in the South American region. As of October 14th, shares of FSM stock are up by around 4% during intraday trading. This again shows that there is a great deal of bullish support for Fortuna Silver Mines Inc.Top Mining Stocks to Watch #4: Kinross Gold Corp.
Kinross Gold Corp. has mining projects around the world where it explores and develops various precious metals. This includes mines located in the U.S., Chile, Brazil, Mauritania, and Russia.
While many mining companies only mine raw ore that is then sold off, Kinross Gold engages in the extraction and processing of the substrate. This means that it can secure higher margins and more profitability than most. In 2020 so far, KGC stock has shot up by as much as 94% as of October 14th. In addition, the company has stated that it expects its production to shoot up by as much as 20% by 2023. This represents around 2.9 million ounces of gold.
With more materials being mined, the company has also stated that it intends to lower the cost per ounce of materials mined. This should help to increase its cash flow and profits in the long term. The company also has been working to increase the dividends that it pays investors.
After not paying any dividends for more than seven years, the company recently announced a new dividend yield of around 1.3%. This is quite substantial and is an added bonus for investors. In its most recent second quarter, the company announced net earnings of around $194 million. This is more than double what it produced at the same time last year. All of this considered KGC stock remains a leading mining stock to watch.Will Mining Stocks Continue to Pick Up Steam?
The short answer to this is hope. With a potential economic recovery on the horizon, mining stocks could see more bullish momentum in the future. Of course, we have to consider that any speculation about the next few years is purely that. But, as of now things have continued to look quite good for many mining stocks to watch.