I’ve recently penned an article for Seeking Alpha looking at the merits of US silver and gold miner Hecla Mining as a likely great stock to be in should there be any recovery in the gold (and silver) prices this year. Its share price has fallen dramatically in the 3-4 year downturn suffered by most precious metals miners which actually puts it in the small cap category, but it remains a significant producer of both the principal precious metals and it is a miner than can survive even lower metal prices as its margins are decently positive at current metals prices. It is thus a precious metals mining stock with comparatively little downside and a significant upside potential in a silver and gold price scenario.
In investing in this sector – perhaps the most risky of all at the moment as in stock price terms Hecla could just about be considered a precious metals junior, and indeed is one of the biggest components in the GDXJ precious metals juniors ETF (another good bet with relatively low downside due to the diversification of holdings among mostly the least risky precious metals juniors) – and another investment option I have written about on Seeking Alpha.
If one looks at the precious metals sector as ripe for a turnaround – which could come into play this year – then Hecla and the GDXJ are at the relatively low risk end of the sector and both could do extremely well should such a turnaround materialise. Personally I do feel that 2016 could see such a recovery with physical gold demand remaining very high, particularly in the East, and major inventories in the West being run down. Something I have also written about on the Sharps Pixley website.
Anyway should you be interested in any of these articles do read them – the links are below:
Hecla Mining – A Small Cap Precious Metals Stock For The Medium To Long Term
GDXJ – Limited Downside And Great Upside Potential In A Rising Gold And Silver Price Scenario