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The Market Online
12-05-2025
- Business
- The Market Online
The case for investing in mining stocks in May 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: Join the discussion: Find out what everybody's saying about investing in mining stocks on Stockhouse's stock forums and message boards. The material provided in this article is for information only and should not be treated as investment advice. For full disclaimer information, please click here.
Epoch Times
08-05-2025
- Business
- Epoch Times
Canadian Natural Says It Can Break Even at US$40 Oil, Reports Record Production
Oil and gas giant Canadian Natural Resources Ltd. says it can weather a crude price much lower than where it's been trading over the past month. West Texas Intermediate, a U.S. benchmark for light oil, has been hovering around the US$60-per-barrel mark in recent weeks, about US$10 lower than it was just six months ago. But Calgary-based Canadian Natural said it can cover maintenance capital and dividends in the low- to mid-US$40-per-barrel range, though it did not provide a breakdown of how each of its business segments would be affected. Canadian Natural is one of Canada's biggest oilsands producers, and is also active in western Canadian natural gas shales and offshore in the United Kingdom and Cote d'Ivoire. The company also said Thursday that it's reducing its capital spending for the year by $100 million to $6.05 billion because of cost efficiencies it managed to find. 'Importantly, this reduction will have no impact on our planned activities or targeted production volumes for 2025,' CEO Scott Stauth told a conference call to discuss first-quarter results. Related Stories 10/7/2024 4/24/2025 Canadian Natural shares were up more than five percent to $41.84 in late-morning trading Thursday. '(Canadian Natural) delivered another quarter of operational outperformance marked by robust production across the portfolio, with beats recorded in each of the major operating segments relative to our expectations,' Desjardins Securities analyst Chris MacCulloch wrote in a research note. Production during the first three months of 2025 averaged a record 1,582,348 barrels of oil equivalent per day, up from 1,333,502 boe/d in the same quarter last year. Profit during the period was $2.46 billion, up from $987 million a year earlier. The company said the profit amounted to $1.17 per diluted share for the quarter ended March 31 compared with 46 cents per diluted share a year ago. On an adjusted basis, Canadian Natural says it earned $1.16 per diluted share from operations in its latest quarter, up from an adjusted profit of 68 cents per diluted share in the same quarter last year. Product sales totalled $12.71 billion, up from $9.42 billion a year ago, while revenue amounted to $10.94 billion, up from $8.24 billion a year earlier.
Calgary Herald
07-05-2025
- Business
- Calgary Herald
Varcoe: 'You've seen this movie': Canadian oil companies adjust to new reality of prices below US$60
Canadian petroleum producers are busy updating action plans and examining options to withstand the stress of oil prices marooned in the mid-US$50-a-barrel range and mounting economic turmoil. Article content Article content Companies have been rolling out first-quarter results this week and detailing how they'll navigate choppy waters created by lower oil prices, a tariff war, uncertain federal policies and a slowing global economy. Article content Article content Some are starting to trim their capital programs or review discretionary spending, trends already underway in the United States. Article content Article content Others are leaning on past efforts to pay down debt and lower operating costs to bolster their resiliency in anticipation of a future dip in a volatile commodity. Article content 'If you've been in this business long enough, you've seen this movie, it's not new,' Suncor Energy CEO Rich Kruger told analysts on an earnings call Wednesday. Article content 'You do get more judicious on your economic spend . . . Do we need to spend it today? Or can we let the dust settle and see where we are six months or a year from now? Those are the prudent things we're doing and looking at.' Article content Suncor reported net earnings of $1.7 billion during the January-to-March period, up five per cent from a year earlier. Article content On Wednesday, the U.S. Energy Information Administration's short-term energy outlook forecast that West Texas Intermediate (WTI) crude prices will average about US$62 a barrel this year — below $59 during the second half — before averaging $55 in 2026. Article content Article content It cited higher oil production outpacing demand growth for the price drop. Article content Article content Other experts have reduced their oil price forecast below $60 a barrel after OPEC+ announced plans last weekend to bring additional supplies back onto the market in June. Article content Prices for U.S. benchmark crude, which traded above $80 a barrel in mid-January, closed at $58.07 on Wednesday. Article content South of the border, independent shale producer Diamondback Energy chopped its annual spending earlier this week by about US$400 million. In a letter to investors, its CEO said the American industry is at a tipping point with current commodity prices, adding that U.S. onshore oil production has peaked and will begin to drop this quarter. Article content In Canada, a report by TD Cowen this month noted the petroleum producers that it covers are 'overwhelmingly living within their means' at $60 a barrel, with capital spending and dividend expectations below projected cash flow levels.
Yahoo
12-02-2025
- Business
- Yahoo
2 Ways Investors Can Play a Weaker Loonie
Written by Joey Frenette at The Motley Fool Canada The Canadian dollar cannot seem to catch a break, with the loonie flying lower for winter. Though the 30-day tariff pause has given the loonie a slight jolt, making up for the prior few weeks of steep losses (can you believe the loonie ran the risk of sinking well below US$0.68?), I think Canadian investors should be ready for the impact on the loonie should this month-long pause in tariffs solve nothing. Indeed, Trump tariff threats could have serious implications for Canada's economy, which wasn't in the best state to begin with. In any case, should 25% tariffs actually end up happening, I wouldn't be too surprised if the loonie were to plunge to US$0.65 or maybe even lower. Of course, it's impossible to predict the loonie's next move. For that, you'd need to know if Trump is serious about imposing tariffs on Canadian goods. In any case, I think there are several ways to prepare for a weaker loonie. In this piece, we'll go through two more ways for investors to hang in there should the loonie be in for even more of a tumble, either due to tariffs or Bank of Canada rate cuts. In a prior piece, I highlighted how precious metals, most notably gold, would be great ways to put one's guard up as the Canadian dollar stood to sink to the mid-US$60 levels. Indeed, gold has been on an unstoppable bull run of late, recently blasting off to new highs. Over the coming weeks and months, US$3,000 per ounce is a realistic possibility for gold. Though I like gold as a sound long-term hedge against inflation and macro turmoil, I must say that investors should not ignore silver at current levels. Silver prices haven't been as hot as gold in the past year, but they've been picking up serious traction in recent months. And with new highs of its own in sight, perhaps it's time to check out some of the silver closed-ended funds (CEFs) that are out there. Personally, I think silver could have a bit more room to run versus gold, as the metal looks to play a bit of catch-up in the latter half of the decade. Sprott Physical Silver Trust (TSX:PSLV) is my preferred pick for investors seeking to bet on physical silver. The CEF currently goes for a close to 3% discount to net asset value (NAV), and while the discount could increase to 4% or even 5%, I still think PSLV is a compelling longer-term option for investors serious about betting on silver. The 0.59% management expense ratio makes the CEF pricier than the gold one. However, given there aren't nearly as many pure silver options on the market, I'd say the PSLV really is a decent bet if you're keen on diversifying your precious metal exposure. Betting on a TSX-traded total stock market index ETF, like Vanguard U.S. Total Market Index ETF (TSX:VUN), which provides exposure to U.S. stocks (large, mid-sized, and small), could be worth the bet. You'll not only benefit from gains to be had from the broadening out of the U.S. stock market's bull run, but you'll also get an added bump should the loonie continue to sink from current levels. Do note, though, that if the loonie strengthens versus the greenback, VUN could face dampened upside. That's the trade-off when you bet on unhedged ETFs! Either way, if you're dreading a falling loonie, VUN should be a nice addition. The post 2 Ways Investors Can Play a Weaker Loonie appeared first on The Motley Fool Canada. Before you buy stock in Sprott Physical Silver Trust, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Sprott Physical Silver Trust wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $18,750.10!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 35 percentage points since 2013*. See the Top Stocks * Returns as of 1/22/25 More reading 10 Stocks Every Canadian Should Own in 2024 [PREMIUM PICKS] It's Time to Buy: 1 Canadian Stock That Hasn't Been This Cheap in Years Where to Invest Your $7,000 TFSA Contribution 3 No-Brainer TSX Stocks to Buy With $300 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 2025 Sign in to access your portfolio
