Studying past bull and bear market cycles in the precious metals shows that we are maybe in the bottom of the third inning... gold and silver have been rising nicely and now outperforming the stock market, but the general public are only just starting to notice.
Historically, western investors would hold 5% to 10% of their assets in precious metals. The numbers today stand at 2% to 3%. The vast majority of investors, both private and institutional are still fascinated by the extremely overpriced Magnificent 7... Facebook, Tesla, Microsoft, Google, Apple, Nvidia, and Amazon.
As an example, the market is placing a total value on Nvidia of over 4 trillion dollars. That's a lot of zeros! But the entire valuation of all publicly traded gold mining companies around the world, including all the big ones like Newmont and Barrick is only about $800 billion. It's so far out of whack that it's ridiculous.
The markets often undervalue some sectors and overvalue others. But they are cyclical, and things always revert back to normal. This has already begun to happen, but the general markets are due to turn down, and that will accelerate the process.
So, I promised to tell you my top five investments that we currently own, and why.
Here they are, in no particular order...
Rio2 Mining. Trading symbol in Canada is RIO, and in the U.S. is RIOFF
Rio2 is building a gold mine in Chile. Located in a mining friendly jurisdiction, construction is on schedule and on budget with the first gold pour scheduled for January 2026. Initial production targets 100,000 ounces per year, with a roadmap to 300,000 ounces per year. At current gold prices, this company will be printing cash next year.
Luca Mining. Trading symbol in Canada is LUCA and in the U.S. is LUCMF
Luca Mining owns and operates two different mines in Mexico. They were severely undervalued a year ago due to poor management, but brought in a new CEO who has been turning things around. They are showing good cash flow and expect to be debt free by mid 2026. The last quarter showed high costs, but it was all due to elevated development and exploration spending. This will pay off in Q3 and Q4. They showed $4.9 million in free cash flow during the first half, but expect that to increase to $30 to $40 million during the second half. The market hasn't caught on to that yet.
Vizsla Silver. Trading symbol in Canada is VZLA and in the U.S. is VZLA
Vizsla Silver owns the big Panuco project in Mexico. They are fully financed to build the mine with over $200 million in cash and a $200 million financing package. This is probably the best undeveloped silver mining project in the world. To give you perspective, they plan to spend $224 million to build the mine, and they will make that back in nine months at current metals prices!
AbraSilver Resource. Trading symbol in Canada is ABRA and in the U.S. is ABBRF
AbraSilver Resource owns the Diablillos silver development project in Argentina. Located in mining friendly Salta province. They have proven resource of 199 million ounces of silver and 1.7 million ounces of gold. They have applied for permits and are advancing towards a production decision. There is a worldwide shortage of silver and this is probably the second best project in the world. I'm expecting this will get bought out before they get a chance to develop it.
K92 Mining. Trading symbol in Canada is KNT and in the U.S. is KNTNF
K92 Mining operates the Kainantu Gold Mine in mining friendly Papua New Guinea. They are easily on track to produce around 175,000 ounces of gold in 2025. They are in the midst of completing an expansion project that will increase production to around 275,000 ounces in 2026 and possibly 400,000 ounces in 2027. This company will also be printing cash in 2026, and I wouldn't be surprised if they announce a dividend policy next year.
Each one of these investments has strong potential to double over the next 12 months, even if the price of gold and silver remains the same. But the price of gold and silver is also likely to increase over the next year.
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Great deal on this 15.6" Portable Monitor.
And in Canada...
Another one I have had for years is Franco Nevada Mining Company (FNV) and it is a Canadian Company. Made me some strong gains over the years.
ReplyDeleteFranco Nevada has done well, but I like the smaller companies that have higher possibility of 3x gains.
DeleteDon’t forget Uranium. Cameco which is a Canadian company is at $80 US, my cost $37 16 months ago
ReplyDeleteI actually don't follow uranium at all. There is enough opportunity in the gold and silver space for me.
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