Following a huge recovery in stocks this month, there’s a feeling of anxiety creeping back into markets.
On Wednesday, US markets fell over 1.5%.
That’s the first real wobble ever since markets surged after Trump backed away from some of his ‘Liberation Day’ tariffs.
So, are we approaching the next major down draft? Maybe, I’m not so sure.
But does it even matter for Junior Mining Investors?
For my paid subscribers on Wednesday, we closed our position in Adriatic Metals [ASX: ADT], a zinc-silver miner, for a 50% gain.
Its share price popped this week after takeover rumours surfaced.
And on that same day, another one of our recommendations rocketed higher.
That was after it announced a 1,619 metres drill hit!
If there were a Guinness Book of Records for the world’s longest drill results, I think that would be it.
Economic grades of copper, gold, and silver extending below the surface for more than 1.6 kilometres!
To put that in context… It’s the equivalent of two Burj Khalifas (the world’s tallest building) stacked over one another.
Opportunities for the Taking
The point is that while markets could be moving back to fear mode, conditions are heating up in the junior mining sector.
Several stocks (not in our portfolio) but on my radar have also made significant discoveries this year.
But for now, most investors are too distracted by Trump and the ongoing tariff bluster to see any real opportunity.
And right now, I think a lot of that sits in the junior mining sector.
Companies putting aside the market noise and keeping the rigs spinning… Pushing ahead with discovery, even if the market isn’t taking much notice.
And on that note…
Earlier this week, I discussed the importance of finding juniors with unique cash flow—royalties, a mining service division, or a small-scale mining project to get cash in the door.
That allows them to stay active when liquidity is tight.
Explore now, and reap the benefits from those discoveries later, once investors clamber back into mining stocks.
That’s why I’m watching these discoveries closely. Their profile remains low and out of sight for most investors.
But the key here is to focus on quality. As I keep telling my paid readership group, quality doesn’t come at a steep premium when conditions are tight.
And that idea doesn’t just extend to explorers; it includes developers and producers.
To show you what I mean…
One high-quality name we added a while ago was Capricorn Metals [ASX: CMM]. That was during a weak market for gold stocks back in 2022.
The company went nowhere for almost two years in our portfolio.
But, with gold producers returning to favour, this has been one of the leading performers among the ASX mid-cap gold producers. Doubling in price over the last 12 months.
It comes back to the idea that quality names tend to outperform when conditions turn bullish.
Capricorn came with a strong track record for delivering on its production guidance. Investors appreciate certainty, especially in a sector with production challenges and delays.
This is how you can exploit poor market conditions by accumulating quality names when no one’s interested… Remaining patient and waiting for conditions to turn.
While gold has had a strong run over the last 12 months, most commodity stocks remain out of favour. Meaning there’s opportunities for the taking!
That’s what I’m doing for my readership group.
If that interests you, I have a service dedicated to mid-cap producers and mining service stocks: Diggers & Drillers.
Or, if you’re more interested in speculative explorers making hits but not capturing much attention (yet), you can join me at my premium service, Mining Phase One.
Across both of our services, we’re accumulating a list of quality names that I believe will lead in the coming commodity bull market.
Until next time.
Regards,
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James Cooper,
Editor, Mining: Phase One and Diggers and Drillers
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