| Dear Reader, You need to read this. It’s from Smallcaps.com.au: ‘BHP (ASX: BHP) is the last company most investors would expect to provide small company share tips, but the world’s biggest miner has just provided a clear picture of what commodities it expects to outperform, along with a starter kit of three small ASX-listed stocks worth following. ‘Impact Minerals (ASX:IPT), Kingrose Mining (ASX: KRM) and Nordic Nickel (ASX: NNL) are the three listed companies which have not only caught the eye of BHP management but have received a cash handout and offer of technical help with exploration. ‘Another four private companies are also recipients of $500,000 in cash each, and advice under what’s called the BHP Xplor program, but could just as easily be called “BHP Grubstake”.’ My ‘Age of Scarcity’ mining stock buy list…launched last November…is off with a blast. And it’s all calibrated with the above dynamic in mind. As you’ll see here, all of my picks (none mentioned above) are also ‘grubstake takeover’ contenders. My primary play is a rare earth stock I’ve dubbed ‘Son of Fortescue’…and it has already smashed right through my buy-up-to price. But don’t worry. I’ve identified several others riding in its slipstream. You can find out more about them here… But what’s the secret to picking mining stocks in the current upsurge in the sector? The big producers are making big money again. Just look at the gains they’ve made in the last year compared to the wider market. Many rare earth and critical metals stocks are flying. But not all of them.
There are a lot of things I’m looking for. And they very much rely on where we are in the cycle. We’ve had an influx of big investor interest. And there’s been a turn in sentiment from tech to real assets. All very reminiscent of the early days of the last 2000s boom. What we haven’t seen yet is a flood of capital toward the juniors. It’s not quite materialised yet. But I think it’s coming… For now, I’m looking just a little higher up the food chain. Stocks that might have had a few strikes. Where management has proven themselves worthy — because they’ve discovered significant mineralisation on their landholding. Shown that it has the POTENTIAL to become a mineable ore body. Yes, you’re paying a premium (compared to the true penny stocks), but the probability for more success grows markedly once we know a company is drilling in the RIGHT area. This first HIT that got the market excited might not turn out to be the ore body, but it does prove the area prospective. I believe it’s these stocks that investor interest is going to swarm around in the coming months. It’s best to wait for the initial excitement to wane, wait for the follow-up drill campaign to get underway, and then get in before those drill results are released to the market. As you’ll see here, my current buy list includes these kinds of plays. I’ve deliberately selected companies holding projects with a long mine life. One has a mine life of up to 40 years! Life of mine sits high on the list for major mining companies — such as BHP, Rio Tinto, or Glencore — looking to acquire projects. Several of my current recommendations…I believe…are a future target for the majors as they look to pick up projects in the critical metals space. However, as you’ll see here, this is just one layer to the story unfolding in Australia’s mining sector. Amid a whole lot of uncertainty in the financial world, the growing demand for critical metals is injecting new life into our mining sector once more. Investing in these kinds of stocks is high risk, so you need tread very carefully here. But in my view, picking the right explorers and near-producers is going to be ‘the main game in town’ for Aussie speculators for the foreseeable future. I might be biased in that sense. And I may well be wrong. But if your instinct tells you I’m right… …and that getting hold of quality assets moving into production just as global demand for their raw materials starts to increase is a GOOD move… Then you should find out what I see happening next. And the stocks I’ve chosen to benefit from it. You can by watching this now. Regards, James Cooper,
Editor, Diggers and Drillers | 