Even mainstream economists and the Fed have finally admitted inflation is likely to remain high well into next year at least, suggests Peter Krauth, mining specialist and editor of Gold Resource Investor.
The only realistic antidote to this upward spiraling price vortex has been to hedge through hard assets. It’s true that gold and silver have not benefited lately, but their rallies last year made up for this year’s weakness.
It’s why owning royalty and mining companies whose revenues leverage higher commodities prices have performed well, and by all accounts will continue to do so. And yet, despite their outperformance even over stocks, they still remain historically cheap.
The way to succeed in investing is to spot a bull market early, commit to it, and then be patient. There may be some adjustments along the way, but for the most part all that’s needed to is to stay informed and to keep checking our premises.
If conditions remain supportive, it makes sense to stay invested. We are still in the early days of a mega-commodities bull. I suspect the Fed’s going to make it even more profitable.
Sibanye Stillwater (SBSW) is aggressively growing its green metals portfolio in preparation for strong demand. The company announced its purchase of the Santa Rita nickel mine and the Serrote copper mine in Brazil for $US1 billion and a 5% NSR royalty over potential future underground production at Santa Rita.
This builds on the existing green energy metals projects Keliber, Sandouville and rhyolite Ridge from earlier this year. Santa Rita and Serrote are significantly pre-developed and pre-capitalised, low cost, producing nickel and copper assets with strong ESG credentials.
Santa Rita is one of the largest nickel-cobalt mines globally, while Serrote is a producing open pit copper mine currently ramping up.
Sibanye also announced its acquisition of 19.99% of New Century Resources for US$46M. New Century is a leading tailings management and rehabilitation company, currently owning the Century tailings zinc retreatment operations in Queensland, Australia. SBSW sees upside from the growth of recycling and waste management sector.
And thirdly, SBSW completed the previously announced $US70M strategic investment in Ioneer Ltd. for its Rhyolite Ridge Lithium Boron Project in the US.
Sibanye is growing aggressively in areas that have huge potential, providing shareholders with great leverage in the precious, platinum group and green metals sectors. SBSW has a low P/E and high dividend yield. We consider the stock to be attractive at current prices.