Mining companies are essentially leveraged plays on whatever they mine. After all, a miner makes money (or loses money!) on the difference between their all-in sustained mining costs (ASIC) and the price they can sell it for. When cost and selling price are close or equal, the company makes no money.
But as price rises the company makes rapidly increasing amounts of profit. Smart investors look for companies making a good profit at current price levels that are relatively undervalued to their peers. Then, if possible, they buy them on dips for maximum returns. Today’s featured article talks about a silver (and gold) mining company that’s right on breakeven at the moment and could do well – IF prices rise. We’ll wait on this one; we prefer stocks with lower ASIC, but if it dips and prices start rising it might come back to life.
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