In this article, we discuss the 11 mining stocks to buy now according to David Iben’s Kopernik Global Investors.
David Iben is Kopernik Global Investors’ chief investment officer, managing member, founder, and chairman of the board of governors. He earned his bachelor’s degree from the University of California, and his MBA from Southern California’s Marshall School of Business. He is a charterholder of the CFA Institute and a member of the CFA Society of Tampa Bay. Iben worked at Vinik Asset Management as a director and leader of the Global Value Unit before launching Kopernik Global Investors. Before joining Vinik Asset Management in July 2012, Iben co-founded and served as the leading portfolio manager and CIO of Tradewinds Global Investors, which had $38 billion in assets under management at the time of Iben’s departure.
Iben Kopernik founded Kopernik Global Investors, a Florida-based, bottoms-up value asset hedge fund, in July 2013. By hedge fund standards, Kopernik Global Investors’ Q3 portfolio is highly concentrated, with only 25 equities and a top 10 holdings concentration of 90.95%. Kopernik Global Investors’ 13F portfolio was worth $946.75 million in the third quarter of 2021. Iben is well-known on the Wall Street for specializing in natural resources. Over $4 billion in assets are managed by Kopernik Global Investors, with 25% invested in gold and silver stocks.
Despite the COVID-19 pandemic, the mining industry has remained resilient. According to PwC, the top 40 mining businesses globally generated $544.4 billion in revenue in 2020, up from $521.4 billion 2019. Vale S.A. (NYSE:VALE), BHP Group (NYSE:BBL), and Rio Tinto Group (NYSE:RIO) are among the most prominent mining stocks.
Vale S.A. manufactures and exports iron ore, pellets, manganese, and iron alloys. On December 10, Goldman Sachs analyst Marcio Farid initiated coverage of Vale S.A., rating the stock as “Neutral”, and gave a price target of $15.
David Iben of Kopernik Global Investors
With operations in over 90 countries and a market value of $150.371 billion, BHP Group (NYSE:BHP) is one of the world’s largest mining companies. In November, BHP Group declared that it had inked a share sale and purchase agreement to sell its 80% stake in BHP Mitsui Coal, a Queensland-based operated metallurgical coal joint venture.
Rio Tinto Group is an Anglo-Australian multinational company that produces iron ore, copper, diamonds, gold, and uranium. Rio Tinto Group was upgraded to “Overweight” from “Equal Weight” by Morgan Stanley analyst Alain Gabriel on December 9, with a price objective of A$110.50, up from A$101.
Our Methodology
Here is a list of 11 mining stocks to buy now according to David Iben’s Kopernik Global Investor. We used Iben’s 13F portfolio for Q3 2021 for this analysis.
Mining Stocks to Buy Now According to David Iben’s Kopernik Global Investors
11. Vista Gold Corp. (NYSE:VGZ)
Kopernik Global Investors Stake Value: $245,000
Percentage of Kopernik Global Investors’ 13F Portfolio: 0.02%
Number of Hedge Fund Holders: 4
Vista Gold Corp. (NYSE:VGZ) is an international gold mining corporation located in Denver, Colorado, with a 25-year history of gold exploration, development, and operations. Vista Gold Corp. is a new addition in David Iben’s Q3 portfolio, as Kopernik Global Investors bought 337,992 shares of the company, worth $245,000.
Following the Q3 results, Alliance Global Partners analyst Jake Sekelsky decreased his price objective on Vista Gold Corp. to $2 from $2.60 and maintained a “Buy” rating on the shares. Due to the imbalance caused by the stock offering, he lowered his price target.
Vista Gold Corp. saw an increase in hedge fund sentiment in Q3 2021. The number of long hedge fund positions climbed to 4 at the end of the third quarter, compared to 2 positions in the previous quarter.
Just like Vale S.A., BHP Group, and Rio Tinto Group, Vista Gold Corp. is one of the mining stocks gaining the attention of investors.
10. International Tower Hill Mines Ltd. (NYSE:THM)
Kopernik Global Investors Stake Value: $9,499,000
Percentage of Kopernik Global Investors’ 13F Portfolio: 1.06%
Number of Hedge Fund Holders: 4
International Tower Hill Mines Ltd. (NYSE:THM) is a mineral exploration firm that focuses on mining property acquisition and exploration. In the third quarter, David Iben increased his stake in International Tower Hill Mines Ltd. by 7%, and his position in the company is worth about $9.50 million.
In November, International Tower Hill Mines Ltd. posted earnings for the third quarter of 2021. The company had $9.2 million in cash and cash equivalents as of September 30, 2021, compared to $13.04 million at December 31, 2020. According to Insider Monkey’s Q3 database of elite hedge funds, John Paulson’s Paulson & Co owns the most valued stake in International Tower Hill Mines Ltd, worth close to $45.95 million and accounting for about 1.3% of the fund’s overall 13F portfolio.
4 out of the 867 hedge funds tracked by Insider Monkey held stakes in International Tower Hill Mines Ltd. in the third quarter of 2021, totaling $75.77 million, compared to the same number of funds in the preceding quarter, holding stakes in International Tower Hill Mines Ltd. worth $106.83 million.
9. IAMGOLD Corporation (NYSE:IAG)
Kopernik Global Investors Stake Value: $10,719,000
Percentage of Kopernik Global Investors’ 13F Portfolio: 1.2%
Number of Hedge Fund Holders: 18
IAMGOLD Corporation (NYSE:IAG) is a gold and mineral resource exploration, development, and production company. In November, IAMGOLD Corporation posted earnings for the third quarter, reporting a loss per share of $0.04, missing market estimates by $0.03. In addition, revenue for the quarter was $294.10 million, down 12.24% from the previous year’s third quarter revenue.
In November, Canaccord analyst Casey MacRury raised his price target on IAMGOLD Corporation to C$4 from C$3.75 and reiterated a “Hold” rating on the shares. Jim Simons’ Renaissance Technologies is the biggest stakeholder of IAMGOLD Corporation, with 19.96 million shares worth $45.10 million.
As of the end of the third quarter, 18 hedge funds in Insider Monkey’s database of 867 funds held stakes in IAMGOLD Corporation, compared to 19 funds in the quarter earlier.
8. New Gold Inc. (NYSE:NGD)
Kopernik Global Investors Stake Value: $10,735,000
Percentage of Kopernik Global Investors’ 13F Portfolio: 1.2%
Number of Hedge Fund Holders: 13
New Gold Inc. (NYSE:NGD) is a gold mining business that focuses on developing, operating, and exploring mineral resources. Rainy River, New Afton, and Cerro San Pedro are some of the properties in its portfolio. New Gold Inc. on December 13 agreed to sell its current gold stream on the Blackwater Project in British Columbia, Canada, to Wheaton Precious Metals for $300 million.
National Bank analyst Mike Parkin boosted his price objective on New Gold Inc. to C$2.50 from C$2.25 in November and maintained a Sector Perform rating on the stock. New Gold Inc.’s third quarter EPS came in at $0.03, beating consensus estimates by $0.01.
At the end of the third quarter of 2021, 13 hedge funds in the database of Insider Monkey held stakes worth $39.16 million in New Gold Inc., compared to the same number of funds in the preceding quarter, holding stakes amounting to $69.44 million.
7. Northern Dynasty Minerals Ltd. (NYSE:NAK)
Kopernik Global Investors Stake Value: $12,723,000
Percentage of Kopernik Global Investors’ 13F Portfolio: 1.42%
Number of Hedge Fund Holders: 5
Northern Dynasty Minerals Ltd. (NYSE:NAK) is a gold and copper mineral exploration and development company. Southern Alaska is home to one of Northern Dynasty Minerals Ltd.’s most prestigious projects. The project encompasses 417 square miles. There are almost 2,400 mining claims in the region.
Kopernik Global Investors is a significant shareholder in Northern Dynasty Minerals Ltd. among the hedge funds monitored by Insider Monkey, owning 27.70 million shares valued at more than $12.72 million.
At the end of the third quarter of 2021, 5 hedge funds in the database of Insider Monkey held stakes worth $14.04 million in Northern Dynasty Minerals Ltd., down from 6 funds in the previous quarter, valued at $14.34 million.
6. Royal Gold, Inc. (NASDAQ:RGLD)
Kopernik Global Investors Stake Value: $22,647,000
Percentage of Kopernik Global Investors’ 13F Portfolio: 2.54%
Number of Hedge Fund Holders: 21
Royal Gold, Inc. (NASDAQ:RGLD) is a prominent precious metals and royalty company focused on acquiring and administering precious metal streams, royalties, and other production-based interests worldwide. Royal Gold, Inc. declared a quarterly dividend of $0.35 per share in November, up 16.7% from the previous dividend of $0.30.
In November, BofA analyst Michael Jalonen upgraded Royal Gold, Inc. from Underperform to Neutral with a $125 price target, up from $108.75, telling investors that the firm’s commodities team had become more bullish on gold but less so on copper.
By the close of the third quarter, 21 hedge funds were long Royal Gold, Inc., compared to 20 funds in the preceding quarter. On the other hand, David Iben’s Kopernik Global Investors disclosed a decreased stake in Royal Gold, Inc. by 4%. He held 237,168 shares worth $22.65 million in Q3 2021.
Royal Gold, Inc. is one of the mining companies preferred by analysts and investors as a long-term investment, alongside Vale S.A., BHP Group, and Rio Tinto Group.
In its Q1 2021 investor letter, Argosy Investors highlighted a few stocks, and Royal Gold, Inc. is one of them. Here is what the fund said:
“Gold royalties business achieve 2 objectives for us: 1) It’s a good business model with strong returns through the gold price cycle; and 2) it provides some protection from inflation, should it materialize due to the increasingly loose fiscal and monetary policy decisions the United States (and other developed market economies) is making.
I don’t want to stay on my soapbox for too long, but this is the first time in history that I’m aware of politicians openly stating that debt levels don’t matter, even in the long term. In 2019, the government spent $4.4 trillion. Of those expenditures, $0.4 trillion was spent making interest payments on existing debt at the time of $16.9 trillion. The interest rate on that debt was 2.4%. Debt for 2021 is projected to increase to $22.5 trillion, and then to $33 trillion by the end of the decade. .…” (Click here to see the full text)
5. Harmony Gold Mining Company Limited (NYSE:HMY)
Kopernik Global Investors Stake Value: $22,863,000
Percentage of Kopernik Global Investors’ 13F Portfolio: 2.56%
Number of Hedge Fund Holders: 5
Harmony Gold Mining Company Limited (NYSE:HMY) is South Africa’s first and largest gold mining corporation, based in Papua New Guinea and South Africa. Cliff Asness’ AQR Capital Management is the most significant shareholder of Harmony Gold Mining Company Limited as of Q3 2021, with 18.28 million worth $57.57 million.
In November, Harmony Gold Mining Company Limited reported a 32% year-over-year and 7% quarter-over-quarter rise in gold output, as well as a 23% year-over-year reduction in net debt for the first quarter of 2022. Harmony Gold Mining Company Limited produced 606,000 ounces of gold in the quarter, up from 563,000 ounces the year before, despite sales falling slightly to $1.77 billion from $1.82 billion.
By the end of the third quarter of 2021, 5 hedge funds out of the 867 funds tracked by Insider Monkey held stakes in Harmony Gold Mining Company Limited, worth roughly $82.30 million. This is compared to 11 hedge funds in the previous quarter, with a total stake value of approximately $102.39 million.
4. NovaGold Resources Inc. (NYSE:NG)
Kopernik Global Investors Stake Value: $32,753,000
Percentage of Kopernik Global Investors’ 13F Portfolio: 3.67%
Number of Hedge Fund Holders: 16
NovaGold Resources Inc. (NYSE:NG) is a company that buys, explores, and develops metal resources, especially in Alaska and British Columbia. Barrick Gold Corporation (NYSE:GOLD) and NovaGold Resources announced earlier this month that recent work on their 50-50 Donlin gold project in Alaska enhanced the definition of mineralization controls and that the project is nearing a new feasibility study.
David Iben first bought 1.62 million shares of NovaGold Resources Inc. way back in 2013. He increased his stake in the firm by 4% in the third quarter of 2021, and his position in NovaGold Resources Inc. is worth about $32.75 million, representing 3.67% of his total Q3 securities.
Our hedge fund data shows that 16 hedge funds were bullish on NovaGold Resources Inc. in the third quarter of 2021. Their total stake value was $247.87 million.
3. Seabridge Gold Inc. (NYSE:SA)
Kopernik Global Investors Stake Value: $35,712,000
Percentage of Kopernik Global Investors’ 13F Portfolio: 4%
Number of Hedge Fund Holders: 10
Seabridge Gold Inc. (NYSE:SA) is a Canadian company that develops the Kerr Sulphurets Mitchell mine in northwest British Columbia, which primarily supplies gold, copper, and silver. David Iben is one of Seabridge Gold Inc.’s largest investors as of the third quarter of 2021. He strengthened his position in Seabridge Gold Inc. by buying 221,893 additional shares in Q3. This makes his stake in Seabridge Gold Inc. amount to 2.31 million shares, worth $35.71 million.
Seabridge Gold Inc.’s posted a loss per share of $0.01 in the third quarter of 2021, beating the estimates by $0.03. On September 30, 2021, the company’s working capital position was C$41.6 million, up from C$36.0 million on December 31, 2020.
Out of the 867 hedge funds tracked by Insider Monkey, 10 hedge funds held stakes in Seabridge Gold Inc. in the third quarter of 2021, worth $105.76 million. 11 hedge funds were bullish on the stock, with stakes worth $120.77 million in the previous quarter.
2. Turquoise Hill Resources Ltd. (NYSE:TRQ)
Kopernik Global Investors Stake Value: $169,816,000
Percentage of Kopernik Global Investors’ 13F Portfolio: 19.05%
Number of Hedge Fund Holders: 10
Turquoise Hill Resources Ltd. (NYSE:TRQ) is a mineral property exploration and development company. Rio Tinto Group (NYSE:RIO) and Turquoise Hill Resources Ltd. formed a joint venture with the Mongolian government to run the Oyu Tolgoi copper and gold mine on December 13.
BMO Capital analyst Jackie Przybylowski lowered the rating on Turquoise Hill Resources Ltd. from “Market Perform” to “Underperform” in November, with a price target of $12, down from $14. Przybylowski informed investors that their faith in the time-frame and budget is shaky, and it is based on hazy data provided by Turquoise Hill Resources Ltd..
In the third quarter, Kopernik Global Investors bought 1.45 million shares of Turquoise Hill Resources Ltd., increasing its stake by about 15%. At of the end of the third quarter, the hedge fund held more than 11.51 million shares of Turquoise Hill Resources Ltd., worth about $169.82 million.
Pentwater Capital Management, a Florida-based investment firm holding 18.72 million shares valued at more than $276.28 million, is a major shareholder in Turquoise Hill Resources Ltd. as of Q3 2021.
In its fourth-quarter 2020 Investor Letter, Massif Capital mentioned Turquoise Hill Resources Ltd.. Here is what the fund said:
“Turquoise Hill remains a challenging company to evaluate and a problematic company to manage within our portfolio. The company holds rights to a world-class asset, but one with very different characteristics than Ivanhoe’s Kamoa Kakula. Kamoa is a flat, low depth, high-grade block of copper ore that is relatively easy to mine. Turquoise Hill’s OT mine is a deep underground mine with good grades and high tonnage, but it is very challenging to monetize. The planned extraction method, block cave mining, is still a relatively new approach to mining an asset in the grand scheme of things. The scale of the OT mine exacerbates the challenge. Management challenges compound technical risks. Rio-Tinto (the mine operator and developer via a 51% stake in Turquoise Hill) and Turquoise Hill seem to always be at odds with each other, and both parties seem to always be at odds with the Mongolian Government.
Although we have spent significant time underwriting the technical, managerial, and political risks associated with the investment, we are continuously surprised by how frequently issues occur for this company. With that in mind, we constructed a collar on the position during the fourth quarter, selling call options for January 2022 at a $20 strike and using the proceeds to buy January 2022 puts on the position at a $7 strike. This will allow us to confidently hold the position in the near term, knowing we have locked in a gain of at least 50% from our purchase price while still allowing for significant potential price appreciation from the current $12 price.”
1. Cameco Corporation (NYSE:CCJ)
Kopernik Global Investors Stake Value: $194,863,000
Percentage of Kopernik Global Investors’ 13F Portfolio: 21.87%
Number of Hedge Fund Holders: 35
Cameco Corporation (NYSE:CCJ) is a uranium producer and seller. Uranium and Fuel Services are the two segments in which it works. The Uranium section is responsible for uranium concentrate exploration, mining, milling, procuring, and selling uranium concentrates. In the fourth quarter of 2013, Kopernik Global Investors began building its position in Cameco Corporation, and by the third quarter of 2021, the hedge fund had over 8.97 million shares in the firm, valued at $194.86 million.
In November, BofA analyst Lawson Winder upgraded Cameco Corporation to “Buy” from “Neutral” with a price target of C$40, up from C$36.25. In addition, Cameco Corporation issued an annual dividend of $0.08 per share at the end of November, in line with the previous.
35 hedge funds in our database held stakes in Wheaton Cameco Corporation at the end of the third quarter, compared to 25 funds in the second quarter.
You can also take a peek at 10 Best Silver Mining Stocks to Invest In and 10 Best Junior Gold Mining Stocks To Buy
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originally published on Insider Monkey.
