The case for investing in mining stocks in May 2025

The Market Online

12-05-2025

If you've heard about the potential for mining stocks to deliver exponential returns and have dry powder to deploy, your due diligence process should begin with taking the commodity market's temperature, building a sense of the current state of demand and what it suggests about the future.
To this end, let's take a look at seven major commodities, covering headwinds and tailwinds, to set our bearings about where investors can find the most prospective opportunities and optimize the probability of a satisfactory return. Oil
Like the rest of the commodities covered in this article, the price of oil has been volatile as of late in response to the potential implications of U.S. President Donald Trump's tariff regime. Even though exemptions are in place, geopolitical tension remains in the air, with the International Energy Agency seeing slower demand growth ahead.
WTI sits at a price of US$63.53 per barrel at the time of writing on Monday, entailing a minimal profit to a slight loss for most Canadian or U.S. producers, though the largest players could maintain operations into the low to mid-US$40 range.
Investors should then be conscious of available cash when considering earlier-stage companies not yet able to self-fund their growth plans. Gold
The price of gold has added more than 60 per cent since 2023 driven by major wars being waged in Ukraine, Israel, and now India and Pakistan, decreasing faith in the stability of the U.S. economy following the election on Donald Trump, and a sense of global uneasiness about how inflation will fluctuate over the near-term. This dynamic has led to a large number of recent deals from explorers to producers, including: Equinox's acquisition of the C$2.5 billion market cap Calibre Mining.
CMOC's C$581 million acquisition of Lumina Gold.
Gold Field's US$2.4 billion acquisition of Australia's Gold Road.
Various strategic investments from major players such as McEwen Mining, Agnico Eagle and Centerra Gold.
With an ounce of gold running you over US$3,200, just shy of its all-time-high, and the U.K. and China being the only countries to cut a trade deal with the U.S. following Trump's tariff push, there is plenty of cash to go around when it comes to kicking the gold supply chain into high gear.
Feel free to scan for stocks across the mining lifecycle, but take care to favor high-quality, low-cost projects with low base-case gold prices, granting them a margin of safety should demand for the yellow metal experience a prolonged dip. Silver
Given silver and gold's shared use-case as a safe-haven during times of heightened economic uncertainty, the former has appreciated by about 30 per cent since 2023, hitting a 10-year high in October 2024 of over US$34 per ounce.
Though this price remains well short of its all-time-high of almost US$50 per ounce coming out of the Global Financial Crisis, the silver market is undoubtedly booming once again, incentivizing fresh capital off the sidelines and into high-conviction operators.
Concentrate on silver's numerous industrial applications, including solar panels, chemicals, switches and circuit boards, as a means to build multi-pronged upside and diversify away from gold's predominantly investment-related demand. Copper
The price of copper, at about US$4.60 per pound, sits near a 10-year high thanks to the metal's essential roles in electrical wiring, electric vehicles (EVs), construction and healthcare thanks to its durability, corrosion resistance and antibacterial properties.
With copper demand expected to grow by 70 per cent from 2021 to 2050, and copper reserves and resources likely to remain readily available for the foreseeable future, investors seeking potentially exponential upside should focus on the micro-cap and small-cap spaces, where price-value dislocations have a higher probability of being found. Any potentially company-making project paired with a pessimistic share-price trajectory deserves further analysis. Lithium
Given a recent slowdown in EV sales because of government subsidy cuts in the U.S. and Europe, demand for lithium, the main component in EV batteries, has taken a 90 per cent nosedive since 2022, making it unattractive for mining projects to move forward with their development plans. Lithium mining stocks have unsurprisingly tanked over the period, with the broader market losing faith in the critical metal's long-term legs.
That said, when we dig a little deeper, we find that 2024 was the best year for EV sales on record, suggesting that lithium's price drop may be the latest example of the market's tendency to overreact in the face the unavoidable short-term pressures, which must always be endured to earn long-term returns.
Investors can currently take advantage of tightening supply and build exposure to a large number of globally relevant assets trading at steep discounts to expected long-term demand. Should lithium prices rebound as EVs approach cost-parity with their gas-powered counterparts, the investment outcomes could be significant. Uranium
Demand for uranium, the main ingredient in nuclear fuel, is expected to rise by as much as 140 per cent by 2050 thanks to its abundant resources and potential to lower global energy-based emissions.
Despite these robust resources – according to the 2024 joint report from the Organisation for Economic Co-operation and Development Nuclear Energy Agency and the International Atomic Energy Agency – strategic investments will still be required to make sure they're available when needed. A deficit expected to grow into 2040 and beyond, with prices doubling to US$70 per pound over the past decade, illustrates how we're falling short of this pressing need.
Consequently, the present risk-averse investment climate, hampered by inflation and geopolitical tension, is a favorable one for seasoned investors who can identify prospective uranium projects, evaluate management teams, take advantage of depressed stock prices and hold on for the decade or so it takes to progress from exploration to production. Nickel
Nickel, the final commodity in our survey, plays an important part in the energy transition, alongside lithium and copper, providing cathode material in EV batteries and enhancing stainless steel used in clean technologies. Nickel demand for batteries alone is expected to triple by 2030, according to Benchmark Mineral Intelligence.
Nickel also enjoys varied industrial applications from consumer products, to healthcare, to pulp and paper, with overall demand on track to add over 200 per cent from 2020 to 2050, according to the International Finance Corporation.
With a deficit on the horizon and strong long-term uses cases supported by global decarbonization, nickel resources with high probabilities of reaching production are few and far between, making them key considerations for your portfolio. This is especially true as the metal's price sits virtually unchanged over the past decade, suggesting investors are drastically underestimating its role in our daily lives.
Now that you have a framework in place to assess the current state of commodity demand, it's time to delve in the market to source potential allocations. To get your due diligence started on the right foot, here are 52 mining stocks worth a closer look:
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