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But, in addition to the geological odds lined up against success, it’s much easier to launch and promote a junior-mining stock than it is to find a mineable deposit. It can pay off extremely well when it succeeds, of course.
#Copper stocks series
Instead, we want to see a series of promising drilling results, along with other encouraging development work.īuying junior-mining stocks is risky. That’s why we never recommend juniors that have much or all of their value riding on a single drill hole. So, the odds that a particular drill hole will lead to the discovery of a valuable deposit are about a million-to-one. However, the odds against finding a mine on any one anomaly are also about 1,000-to-1. It is sometimes said that a single drill hole has a 1-in-1,000 chance of turning up an “anomaly,” or a drill result that could be a marker for a mineral deposit. When we research a junior mining stock to recommend in our investment services and newsletters, we like to see a mine-finding effort that focuses on high geological probabilities and doesn’t simply attempt to piggyback on the popularity of areas that are in the limelight because of a recent rich find. Majors have proven methods for exploration and mining, and have consistent output year over year. Majors are mining companies that have been in the mining business for many years and more often than not they operate on a global scale.
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Mining stocks can generally be broken up into two categories, majors and juniors. Increase your profits from investing in copper stocks by choosing the right companies. At the same time, though, resource stocks (and this includes oil and gas, of course) should in general make up only a limited portion of your portfolio. Also stay out of investment vehicles (like options or futures) that will only make money for you if copper keeps going up in the short term.Īll in all, most investors’ portfolio could include exposure to the Resources and Commodities sector of the economy, and that includes copper stocks. But as always, stay out of promotional penny mines that are merely drilling for copper. To sum up, we like copper’s long-term prospects. Environmental issues are also making it harder for companies to acquire permits for new mines.
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Over the longer term, ore grades are also falling at many major mines around the world as producers use up the easy-to-mine ore zones in their copper deposits. In the short term, labour problems and technical delays will continue to slow global copper production. That’s just another way of saying they can be considered somewhat less risky than gold and other precious metals.Ĭopper should benefit not just from rising demand, but also from tightening supply. That means they potentially have less room to fall if markets fall. As well, they’re usually much cheaper than gold stocks in relation to their earnings and cash flow. Stocks of firms that produce base metals, including copper, generally have higher dividend yields than gold stocks.