Muzhu Mining Ltd. (CSE: MUZU)
Creating lasting wealth by developing gold and silver properties with near-term mining potential
Building a successful mining stock portfolio requires knowledge, timing and patience, also a good understanding of commodity prices. In the metals investment space, the hottest commodities for 2024 are uranium, gold and copper. How to capture the potential bull market in these popular commodities this year by investing in related stocks is a question worth pondering for mining investors.
At the Vancouver Resource Investment Conference (VRIC) in January, Resource Maven’s Gwen Preston shared a few strategies on investing in uranium, gold and copper stocks.
She noted that it took the uranium market six years from 2016 to 2022 to address the oversupply. As the world’s largest uranium producer, Kazatomprom has cut production over the past few years, helping to stabilize uranium prices. At this stage, the company is facing a lack of funds to fully restart uranium production.
And at the same time, the uranium market is being bothered by geopolitical issues, with the U.S. House of Representatives passing the Russian Uranium Import Ban Act last December, which proposes that the U.S. restrict imports of Russian uranium. This is expected to have a knock-on effect, restricting not only Russian uranium, but any uranium that comes through the port of St Petersburg.
Preston says this is not a speculative market and the reality is that there really isn’t enough uranium on the market to meet demand.
As for gold stocks, they have been trading sideways for a few years now, despite the impressive run in the price of gold over the past few years, and with central banks widely expected to cut interest rates in 2024, many experts are optimistic about the outlook for gold. Preston believes that there are opportunities on the horizon for investors looking to get a foothold in gold stocks, but notes that it’s too soon to accurately tell when gold stocks will move.
Therefore, it would be more prudent to buy those stocks that are the first to pull up when gold is strong, rather than buying gold stocks in a big way now. Gold is definitely going to make a big move this year, but it may take a few more months before we see a breakout.
Preston concludes by noting that conservative management teams, sluggish investor sentiment and a challenging licensing environment are having the biggest impact on the copper market. For producers, neither new large copper mines have been discovered nor is there funding to drive project development. The long-term demand outlook for copper remains strong, but the oversupply may take longer to digest. Investors are advised to focus on stocks of producers with healthy balance sheets and new copper projects coming online in the next few years.
