5 Hot Mining Stocks For Christmas

December 12, 2017 - Safehaven

What if there were mines…without miners?

The future of mineral extraction is robots, drones, automated systems, and technology that will eliminate the human element and cut costs way, way down.

One mining executive predicts that robots will transform the industry, making it “unrecognizable” in as little as a decade.

Aerial drones can survey enormous areas faster and easier than manned aircraft, taking detailed digital notes of the terrain in order to pinpoint the most promising spots.

Sensors dug into the earth can map out the underground terrain at lightning speed, delivering immense amounts of data for analysis, before a single shovel sinks into the earth.

Mining bots will dig without human accompaniment. There will be no need for elaborate and costly safety measures. The time needed to tap into deposits will be cut in half.

Companies like Caterpillar Inc. and Komatsu Mining Corp. have already begun developing automated loaders, excavators and other mining bots. New mines are being designed solely for exploitation by robots, with not a single hard-hat miner in sight.

All this means that the global mining sector, which has enjoyed a boom since the commodities crash of the mid-2010s, is set to expand even more. The market cap of top mining firms grew by $47 billion in 2016, rising to $714 billion. Debt has been paid down, profits are up and new technologies promise reduced costs for large and small-cap miners.

With the importance of new technology, it’s not just miners that will matter for the new mining boom. Drone manufacturers supplying craft for mining surveys will be crucial to the success of mining’s new frontiersmen.

Here’s a few companies to watch in tech and mining:

#1 Rio Tinto PLC

The international mining giant Rio Tinto PLC has embraced the technological revolution in mining and is investing heavily in new mining methods that will allow it to mine deeper, longer and at a lower cost than any other large mining firm.

A new mine opened by RT in Superior, Arizona has seen boring of nearly 7,000 feet. The deepest shaft reaches a depth of 1.3 miles, where temperatures rise to 175 degrees F.

The shaft is so deep and temperatures so high, some mining specialists have joked RT hopes to mine “in hell.”

Such a project would have been unimaginable ten years ago, but improved technology has made it possible. RT is using automated, robot miners to plumb the depths of earth to degrees that are impossible with human miners.

The company is now planning a $2.2 billion “intelligent” iron ore min that will incorporate new robotics technology, along with driverless trains and trucks. The site of the mine is in Western Australia, where RT extracts more than 300 million tons annually, making it the second-largest ore miner.

The company already operates 73 self-driving trucks in its Australian mines, and will likely rapidly expand that fleet in the coming years, as it embraces robotic tech.

#2 Montego Resources (CSE:MY; FRA:4MO1)

A smaller miner with big ambitions, Montego is currently sitting on what could turn out to be a huge silver deposit.

The company has optioned the Taylor Mine, a historically productive site in eastern Nevada and one which has already enjoyed $27 million in investment by previous companies.

With a market cap of only $11 million, Montego has secured a property that contains 16 million oz. of measured and indicated silver, based on historical data. And utilizing new and advanced mining survey technology, drone flights and underground digital mapping, the company’s management believes Taylor could possibly contain as much as 75 million oz., worth $1.2 billion at today’s prices.

To put the figures in perspective: Alexco, another silver exploration company with properties in Yukon, holds 68 million oz. of silver and has a market cap of $179 million. Using comparative silver holdings in the ground as your sole valuation metric, that would put Montego’s market cap at around $44 million.

That means the market cap of this little company could be much higher, if things work out as expected.

Montego has lined up expert geologists with decades of experience in global mining, and is prepared to use the most advanced methods to unlock Taylor’s potential. In the past, it took months of digging and hours of expensive aerial surveys by manned aircraft to estimate a mine’s potential.

Montego is turning to drones to quickly put together a detailed idea of Taylor’s geology, constructing 3D maps of the area’s geographic architecture. Then, the robo-drill arrives and collects soil samples for analysis.

Through such modern mining methods, Montego should be able to determine where Taylor’s richest veins lie, at a fraction of the cost of traditional surveying. Once new capital is raised, Montego can go in with automated excavators, robot loaders and trucks. The whole mine could be run with a much smaller staff, as opposed to the army of miners once needed to exploit a typical silver mine.

Plus, the Taylor Mine’s superb location makes it an attractive venture. Located only 17 miles from Ely, Nevada and a mere 2.5 miles from US Highway 50, the mine is well-positioned for ease of transport.

Nevada, “The Silver State,” is a big mining state with an attractive business and political environment.

While the price of silver bottomed out in 2015, it’s been rising steadily and could be poised for a rebound in 2018 and 2019.

The Taylor site contains 131 unpatented lodes, 5 unpatented mill sites and 4 patented sites covering 2166 acres. It’s already been heavily explored by its previous owner, Silver Predator, which dug hundreds of holes.

An immense amount of exploration, countless surveys and millions in sunk costs means that Taylor’s worth has already been proven. With Montego’s emphasis on utilizing new technology to make mining quicker and easier, it’s likely the company will need to invest only a relatively small amount of capital before it comes up with high quality drilling targets.

This could make Taylor Mine the biggest silver play in Nevada in 2018.

Investors should take note of this company and watch for its news.

#3 Lockheed Martin

One of the world’s most successful defense contractors is also a big player in the world of unmanned aerial vehicles (UAVs), or drones. Lockheed Martin has developed new drone technology that put its products above the rest.

And while most of its drones are designed for combat, marketed primarily to military customers and come with a heavy price tag, the company’s tech is certain to find applications in civilian fields such as aerial surveying.

Lockheed has had a few bumper years, along with the rest of the defense industry. It’s stock price has tripled since 2013, with the price now pushing $300 a share. But don’t let that scare you off: the stock could very well split in the next year, offering an opportunity to investors to climb aboard.

Right now, Lockheed is trying out new technology designed to take down offensive drones. Utilizing the precision laser system ATHENA, that burns drones with high-intensity lasers and brings them down faster and at longer ranges than conventional counter-measures, Lockheed hopes to design the perfect anti-drone countermeasure system.

One demo had ATHENA take down five drones in quick succession, proving the technology’s viability.

So even while Lockheed is sending drones up, it’s working on new and exciting ways to take them down.

Any investors hoping to ride the UAV wave should take notice, particularly as the civilian drone market is set to expand in the future when drones become more widely used in fields such as mining, agriculture and civilian law-enforcement.

#4 Anglo-American

Mining giant Anglo-American Plc. has made it clear where it stands on the mining tech revolution: the company has predicted that in the next decade, some mines will be run entirely without a human presence.

The company feels robot-miners with superior chiseling abilities will replace human miners. In a single decade, widespread adoption of such tech will make international mining “unrecognizable.”

Anglo-American is a massive global mining firm, with eighty-seven thousand employees and mines in operation across South America, Africa and Australia.

Anglo-American technical director Tony O’Neill, in an interview in August 2017, predicted a wave of mining technology, including 3D printing, non-explosive rock breakage, medical imaging technology and other methods will allow for quicker, easier, safer and more profitable mineral extraction.

A key aspect of this will be reducing the amount of waste that is brought to the surface. Mining methods haven’t changed much in the last century, apart from improved safety. Miners today use immense quantities of energy, time and water to extract only a small amount of useable minerals.

Better tech means Anglo-American can extract more minerals with less waste. The company’s FutureSmart Mining program is emphasizing “smarter” drilling, rather than more drilling: the company is hoping to cut way down on costs by using data and advanced tech to make bigger discoveries faster, then operating mines with more robots.

This pivot to new technologies means that Anglo-American will enjoy a surge of new growth, building on its already-sterling reputation.

#5 AeroVironment 

A major name in drone manufacturing, AeroVironmnent has enjoyed immense growth: the company’s revenue grew by 47 percent from 2016 to 2017, pushed upwards by a $23.2 million gain in drone sales, chiefly to the U.S. military.

The company’s earnings for the year are around $300 million, and stocks jumped at the news.

The company has sold thousands of small UAVs to militaries around the world, and Wall Street feels it’s likely the company will sell thousands more in the years to come. Expectations among analysts have AeroVironment’s stock rising by 36 percent annually over the next five years.

And while the company has focused on the military market, it’s about to break into the civilian market in a big, big way. AeroVironment’s new drone, the Quantix, is designed for commercial applications like agriculture, mining and energy industry applications.

The small craft is designed for a vertical take-off, then morphs into a small airplane for faster, more aerodynamic movement. This allows it to travel farther and more efficiently, allowing it to cover more ground.

This hybrid design will make the Quantix more flexible, allowing it to take on a host of military and civilian applications. It’s the first drone to be introduced directly to agriculture, where the use of drones is still pretty limited, and it’s sure to find plenty of work in surveying and mining applications as well.

That means it’ll be a big earner for AeroVironment.

Honorable Mentions:

Fortune Minerals (TSX:FT) is major player in the mining space. Operating in Canada’s Northwest Territories, Fortune is eyeing status as a major Canadian producer of battery-grade cobalt chemicals--but it’s also got copper and gold bismuth upside. And it’s getting a boost from the government in terms of mining infrastructure.

Fortune’s modest market cap and low buy in make it a great stock for investors looking to get a piece of the electric vehicle revolution. The company’s value has increased significantly over the past year but it hasn’t yet reached its peak.

RNC (TSX:RNX): While investor attention is about to refocus on zinc, it’s possible that nickel is being overlooked, and while this stock has been a recent top decliner, if nickel demand growth is overlooked, RNC could be a good stock to hold.

RNC's principal assets are the producing Beta Hunt gold and nickel mine in Western Australia, the Dumont Nickel Project located in the established Abitibi mining camp in Quebec and a 30% stake in the producing Reed copper-gold mine in the Flin Flon-Snow Lake region of Manitoba, Canada.

RNC’s stock price has lagged since July, but a recent uptick in nickel prices could revive this stock once

IAMGOLD (TSX:IMG):  IAMGOLD is a fast-growing mid-tier gold miner with the ambition to become a major. The company produced some 214,000 ounces in Q1 2017 from its operations in South America and Africa. In June, this promising miner closed a deal with Japanese commodity giant Sumimoto to develop an Ontario gold project. The company saw its stock price fall earlier this year, but is poised for gains as gold is rallying.

Gold is a classic asset and the demand for the metal is not going anywhere. Investors looking to diversify their gold portfolio are definitely keeping an eye on IAMGOLD.

Centerra Gold (TSX:CG): This big mid-tier gold Canadian miner realized a very competitive cost per ounce in 2016 and expects to cut costs even further in 2017. Its Kyrgyzstan operation yielded a very strong result in 2016. Next to gold, Centerra’s copper production is worth noting as prices for this metal just leapt to two-year highs, providing a nice extra income for Centerra this year.

With new deals in the making, Centerra Gold stands to continue to be a force in the Canadian stock market, and a fair bet for investors.


Forward-Looking Statements

This news release contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this release include that prices for silver will retain value in future as currently expected; that Montego can fulfill all its obligations to exercise its Nevada property option; that Montego’s Nevada property can achieve drilling and mining success for silver and gold, and greatly increase the measured and indicated resources of silver and gold; that historical geological information and estimations will prove to be accurate; that high-grade targets exist in untested areas below the resource; that Taylor should be a relatively cheap mine to operate; and that Montego will be able to carry out its business plans. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that the Company may not be able to finance its acquisition of the Taylor mine project or its intended drilling program, aspects or all of the property’s development may not be successful, mining of the silver and gold may not be cost effective, Montego may not raise sufficient funds to carry out its plans, changing costs for mining and processing; increased capital costs; the timing and content of upcoming work programs; geological interpretations and technological results based on current data that may change with more detailed information or testing; potential process methods and mineral recoveries assumptions based on limited test work with further test work may not be viable; the availability of labour, equipment and markets for the products produced; and despite the current expected viability of its projects, that the minerals cannot be economically mined on its properties, or that the required permits to build and operate the envisaged mines cannot be obtained. The forward-looking information contained herein is given as of the date hereof and the Company assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.


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