Bullion prices edged down in Thursday’s trading session and are on track for their biggest monthly decline since November 2016. But despite the tumble in bullion prices over the past week, investors remain bullish on gold stocks and, specifically, on the mining stocks of Canadian junior gold miners.
Some individual mining stocks are registering gains as are gold and silver mining ETFs, which remain a popular destination for investor capital. Over the past twelve months, the mining ETF with the highest returns is the Sprott Junior Gold Miners ETF (SGDJ). It is up 45.24%, easily best in the field:
Junior gold miners with strong revenue growth and price momentum are the most likely to enjoy long-term stock performance. The current dip in gold prices is highlighted by many analysts as an indication for investors to react to seize opportunities in a timely fashion.
One of the most promising Canadian junior gold miners is Great Bear Resources. The company made a huge discovery two years ago, which continues to bring in significant revenue for the firm.
Among other interesting gold stocks is that of SGDJ is Skeena Resources Limited. The Canadian company completed a share consolidation last week. Skeena has multiple sites in Canada’s famous “Golden Triangle” region. The company’s stock price has risen considerably over the past 12 months, trading at $5.40 a year ago and at $14.38 today.
Finally, analysts are looking at Karora Resources (TSX: KRR), which is jumping on the carbon neutral train and partnering with The Net Zero Company to establish a pathway to become one of the world’s first net zero junior gold miners.
The Toronto-based miner owns the Beta Hunt underground gold mine in Western Australia and the Higginsville open pit operations and processing plant, 75 km away. The increasing interest in combating climate change and government incentives for companies in the mining sector mean a carbon intensive industry will have to undergo an overhaul in the years to come. Most of the mining companies that have so far made net zero pledges are majors. Some pre-production juniors have also committed to building future mines as carbon neutral operations. With its work on establishing a net zero pathway, Karora is in a prime position to become a leader among junior gold producers and this will surely reflect on its mining stock.
All three gold miners offer excellent risk/reward fundamentals. Their balance sheet is solid and their development plans are also bullish for investors who believe gold prices are set to rise. Accordingly, these gold stocks are really a higher-leverage bet on where investors see precious metals prices two or three years from now.