Copper fundamentals and market drivers

Nick Hodge, Co-Owner of Digest Publishing and editor of Foundational Profits and Underground Alpha, joins us for a longer-format discussion with macroeconomic factors, veteran stock tips and opportunities in select silver, gold, lithium, and copper stocks.

We start off discussing the break in silver to all-time highs, coming out of the mid-October through mid-November corrective move in the precious metals sector.  Nick points out that in light of this sector resurgence in silver, gold, and also copper over the last few weeks, that we’ve continued to witness large, outsized financings in companies like Vizsla Silver and Arizona Sonoran Copper; that were aggressively taken up in very short periods of time.  This underscores the large pools of money on the sidelines that are still quite interested in getting positioned with the highest quality projects as the metals bull market continues to unfold.

We review how the recent moves in both gold and silver to record levels have become too big to ignore for generalist investors and analysts, that will now shift their gaze to the expanded margins playing out in Q4 and continue to push PM producers to higher levels.  

• He flagged the capital flows and stock performance in royalty companies like Royal Gold and Empress Royalties as evidence that more generalists and institutional funds were being drawn into the precious metals sector.
• This led to a discussion about the substantial positioning of Tether Investments recently into a handful of royalty and streaming companies; which may pave the way for more rotation of funds from the crypto space into the PM stocks.

Additionally, Nick sees the most undervalued opportunities in the brownfield developers with defined ounces in the ground, compelling economics, and that are moving down the pathway towards production.

• He pointed to companies like Perpetua Resources and Revival Gold as good examples of developers up near 52 weeks highs, garnering interest from investors, but that still had more runway to keep appreciating in price to NAV metrics.

Even the exploration stocks focused on new discoveries are getting a stronger bid in this environment, and Nick points to the move up this year in Kingsmen Resources, including the move today on the back of a silver/gold discovery in Mexico.

Next we shift over to the uptick in both the lithium carbonate pricing on the global markets, as well as a renewed interest in many lithium stocks.

• Nick unpacked his investing journey and strategy utilizing early positioning in private placements to experience multi-fold returns in lithium stocks like Q2 Metals, and Lion Rock Resources, both with compelling recent exploration results.

Wrapping up we touched about the continued favorable supply/demand fundamentals in the copper sector, the improving pricing strength in copper itself, and the recent surge in copper producers in several ETFs.

• Nick mentioned positions in the (PICK) iShares MSCI Global Metals & Mining Producers ETF, the positive market reaction in Ivanhoe Mines despite reduced production forecasts, and the M&A positioning for Teck Resources from AngloAmerican and BHP as evidence of a pickup in interest in copper and base metals producers.

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