What happened
After the downturn in the markets yesterday and as energy prices continue to rise today, conservative investors are looking to fortify their portfolios by adding metals exposure to their holdings. The price of gold, for example, crossed the $2,000-per-ounce mark today for the first time since August 2020, while other precious metals like silver, platinum, and palladium are also rising today. It's no wonder, therefore, that Northern Dynasty Minerals (NAK 0.92%), PolyMet Mining (PLM), and TMC the metals company (TMC -3.09%) are all looking a lot more lustrous in investors' eyes today. The allure of these stocks, however, also extends to growth investors, since all three companies are in the pre-revenue phase of their development, as well as to those investors who are looking for companies that operate in the U.S.
As of 10:43 a.m. ET, shares of Northern Dynasty Minerals, PolyMet Mining, and TMC have risen 24.2%, 24.1%, and 42.4%, respectively.
So what
With gold bounding higher today, it's little surprise that Northern Dynasty Minerals is finding itself the desire of gold-hungry investors. The company proclaims that its lone asset, the Pebble Project, contains "one of the greatest stores of mineral wealth ever discovered, and the world's largest undeveloped copper and gold resource." How much of the yellow stuff are we talking about here? According to the company, the Pebble deposit, located in Alaska, has measured and indicated resources of 71 million gold ounces. In addition, the deposit is rich in copper: 57 billion pounds of measured and indicated resources.
Although not the safe haven investment that gold represents, investors are likely interested in the company's copper resources since it is a critical component of burgeoning industries like electric vehicles (EVs). Moreover, the company may have already been on investors' radars after it reported last week that a study conducted by IHS Markit recently found that Northern Dynasty Minerals could help U.S. companies reduce their dependence on copper imports in pursuit of achieving green-energy targets. With geopolitical tensions running extremely high right now, the attractiveness of securing the supply chain of critical materials seems especially compelling for many companies -- and investors.
Image source: Getty Images.
Planning on commencing mining operations in Minnesota, PolyMet Mining is also gaining attention today. The company's core asset, the NorthMet ore body, contains significant deposits of multiple metals. According to PolyMet, for example, the ore body contains proven and probable reserves of 1.7 billion pounds of copper, 480 million pounds of nickel, 330,000 ounces of gold, and 9 million ounces of silver. Making progress on its development of the project, PolyMet announced in January a positive ruling from the Minnesota Court of Appeals regarding the company's water permit.
Unlike Northern Dynasty Minerals and PolyMet Mining, TMC has its attention focused on the seafloor, where it aspires to mine nickel, cobalt, copper, and manganese -- minerals essential for the production of batteries used in EVs. In fact, the company believes that its asset represents the world's largest undeveloped nickel project. Management expects small-scale production of about 1 million metric tons to commence in 2024 with large-scale production -- about 10 million metric tons annually -- starting in 2024.
Now what
While all three companies have the potential to be long-term winners for shareholders, it's critical for potential investors to recognize that there are plenty of risks inherent in picking up shares of these mining stocks. Northern Dynasty Minerals has long been mired in the permitting phase of development, and there's no guarantee that it will ever secure the necessary permits to commence operations. The Metals Company, on the other hand, is attempting to innovate by procuring metals from the seafloor -- a feat that is no small undertaking and may never pan out as well as management thinks it will.
At this point, PolyMet Mining seems to represent the least risk of these three stocks, though there are plenty of other options for metals-minded investors to consider, including those with excellent growth opportunities.
