In this article, we will take a look at the 11 best mining penny stocks to buy now. To see more such companies, go directly to 5 Best Mining Penny Stocks to Buy Now.
Mining is one of those segments in the overall economy that continue to gain investors’ attention. Amid growing production and growth around the world, mining companies remain on everyone’s radar. Latest advancements in different facets of technological revolution keep on creating the demand for new metals and minerals. For example, the electric vehicle industry is one of the biggest catalysts for the mining industry.
The EV boom is also causing many venture capitalists to pour money into mining-related startups. A latest Wall Street Journal report, citing data from PitchBook, said that mining-tech startups have raised a whopping $350 million this year through the second week of August. In 2022, when funding was drying up across the board amid recession risks, mining-tech startups managed to raise $748 million. The report, however, cited experts who believe mining technology startups are working on technologies related to EV batteries that could take years to take off or become successful.
However, the sector is also one of the most volatile. A Bloomberg report shows that over the past few months S&P/ASX 200 Index, whose constituents include several mining companies, has shown extreme volatility. Some companies have gained a lot of value while others lost. For example, the report said that Liontown Resources Ltd. has surged this year after the company snubbed several takeover bids from Albemarle Corp. Liontown Resources shares have gained about 80% year to date through August 29.
On the other hand, many miners face challenges at different mines and plants, causing their share prices to tank. For example, Lake Resources NL fell over 70% this year after the company announced a six-year delay at one of its projects.
One of the most notable trends in the lithium mining sector is different mining stocks jumping to record levels as soon as companies announce new lithium discoveries. But in many cases these stock jumps are caused by market overreactions. Initially, investors usually don’t focus too much on the quality and size of lithium discoveries. The Bloomberg report cited Carrick Ryan, portfolio manager at Westbeck Capital Management, who said:
“In a market like we’re in today where it’s red hot for lithium explorers, if the stock moves up a lot on a skinny discovery, you should be careful.”
The mining industry is also subject to volatility amid massive macroeconomic fluctuations, commodity price changes, demand and supply dynamics and more. For example, Australian-based miner Newcrest, which has agreed to be acquired by Newmont in May, earlier this month declared an 11% decline in annual profits. Despite the fact that the company produced more gold and copper from its mines last fiscal year, its profits were dented due to weak copper prices, inflationary pressures and rising costs.
A PwC report on the mining industry outlook for 2023 had highlighted how increasing costs and softening demand were expected to affect the mining industry:
“We expect softening prices for many key mining commodities and, as a result, we forecast a 9% fall in revenue. Revenue from coal is expected to fall by at least 20%, and the commodity is unlikely to be the industry’s main revenue source next year, which could lead to a change in the composition of the Top 40. We expect the 2022 trend of rising costs to stabilize through 2023, as lower shipping and fuel costs offset some inflation pressures. Our outlook—higher costs and lower revenue—points towards a decrease inEBITDA margins, from 29% in 2022 to 28% in 2023, and towards negative net cash flow. Given the challenging economic conditions, we believe overall capital spending will also decline, though spending on critical minerals and decarbonisation should increase. Payment of dividends is still expected to be high, although down fromm2022 levels. To ensure longer-term resilience, the Top 40 should focus on responding tomevolving trends even as they temper spending. With continued free cash flow and strong balance sheets, these miners are well-positioned to take advantage of new opportunities.”
Best Mining Penny Stocks to Buy Now
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Methodology
For this article we used the Yahoo Finance’s stock screener to list down stocks from the precious metals & mining sector trading under $5 as of August 27. Out of these stocks we selected 11 stocks with the highest number of hedge fund investors. The stocks listed in this article are the best mining penny stocks to buy according to hedge funds. To gauge hedge fund sentiment on stocks we used Insider Monkey’s database of 910 hedge funds.
Golden Minerals Company (NYSE:AUMN) is one of the mining stocks that are currently in the spotlight as the stock has gained about 17% over the past five days through August 28. Golden Minerals Company (NYSE:AUMN) recently announced that the NYSE accepted the company's business plan to regain compliance with the exchange's continued listing standards. Back in June Golden Minerals Company (NYSE:AUMN) had received a notice from the NYSE that it was not in compliance with a regulation which requires a listed company to have stockholders equity of at least $6 million when having sustained losses from continuing operations and/or net losses in its five most recent fiscal years.
Just one hedge fund in Insider Monkey’s database of 910 hedge funds had stake in Golden Minerals Company (NYSE:AUMN) as of the end of the second quarter. Steven Boyd’s Armistice Capital had a $1.1 million stake in the company.
New Pacific Metals Corp. (NYSE:NEWP) explores mineral properties in Bolivia. The gold and silver mining company recently posted results for the June quarter. Net loss attributable to equity holders of New Pacific Metals Corp. (NYSE:NEWP) came in at $1.86 million or $0.01 per share, compared to a net loss of $2.34 million or $0.01 per share reported in the second quarter of 2023.
9. Vox Royalty Corp. (NASDAQ:VOXR)
Number of Hedge Fund Holders: 4
Canadian mining royalty and streaming firm Vox Royalty Corp. (NASDAQ:VOXR) ranks 9th in our list of the top mining penny stocks to buy according to hedge funds. Earlier in August Vox Royalty Corp. (NASDAQ:VOXR) posted Q2 results. GAAP EPS in the quarter came in at $0, while revenue in the quarter jumped 27% year over year to $2.22 million. Earlier in August Vox Royalty Corp. (NASDAQ:VOXR) declared a quarterly dividend of CAD 0.011/share. Dividend yield came in at around 2%.
A total of 4 hedge funds in Insider Monkey’s database had stakes in Vox Royalty Corp. (NASDAQ:VOXR) as of the end of the second quarter of 2023.
Integra Resources Corp. (NYSE:ITRG) explores for gold and silver deposits.
As of the end of the second quarter of 2023, 4 hedge funds in Insider Monkey’s database of 943 funds were long Integra Resources Corp. (NYSE:ITRG). The biggest stakeholder of Integra Resources Corp. (NYSE:ITRG) during this period was Eric Sprott’s Sprott Asset Management. Over the past five days through August 28, Integra Resources Corp. (NYSE:ITRG) is up about 1.4%.
Insider Monkey’s database of 910 hedge funds shows that 5 hedge funds had stakes in Platinum Group Metals Ltd. (NYSE:PLG) as of the end of the second quarter of 2023. In July Platinum Group Metals Ltd. (NYSE:PLG) posted fiscal Q3 results. GAAP EPS in the period came in at -$0.01 beating estimates by $0.01. Platinum Group Metals Ltd. (NYSE:PLG) said that its primary business objective is to advance the Waterberg Project to a development and construction decision.
Over the past 12 months Metalla Royalty & Streaming Ltd. (NYSE:MTA) shares have gained about 4%. The Canadian precious metals royalty and streaming company is engaged in the management of precious metal royalties, streams, and related production-based interests in Canada, Australia, Argentina, Mexico, and the US.
As of the end of the June quarter, 6 hedge funds in Insider Monkey’s database had stakes in Metalla Royalty & Streaming Ltd. (NYSE:MTA). The biggest stakeholder of Metalla Royalty & Streaming Ltd. (NYSE:MTA) was Murray Stahl’s Horizon Asset Management which owns a $1.7 million stake in the company.
