Investors looking for options in the mining industry may note that few options have outperformed in recent years, given the lack of interest in commodities when compared to equities in this elongated bull market. In general, havens such as fixed-income securities and precious metals or commodities have been forgone by the market in exchange for higher yielding options such as securities in this macroeconomic environment.
While precious metals miners and commodities firms may indeed be out of favor, value investors everywhere should indeed be getting excited about the prices at which these securities trade.
One such company, Lundin Gold Inc. (TSX:LUG), unlike its parent company which mines primarily base metals, is a unique gold play centered in South America.
This company has performed quite well in recent years, absent a real meaningful increase in the price of gold, and is working toward developing a number of high quality assets which have been estimated to hold a significant amount of gold, in excellent densities.
The company’s Fruta Del Norte project in Equador is estimated to hold approximately four million ounces of gold and 14 million ounces of silver, at high grades and densely located, allowing for the potential for high profitability moving forward.
While Lundin Gold remains a highly speculative play, having a small percentage of one’s portfolio invested in such companies is an excellent way to increase the growth profile of a group of stocks while making an educated bet on a sector which could explode if equities implode in the years to come (a hedge is never a bad thing in a bear market).
Invest wisely, my friends.
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