These stocks trend as the broader economy does, in both times of expansion and recessions. BHP Billiton (NYSE:BHP) is a diversified resources company. Investors split the sector into two main groups: majors and juniors. A junior mining stock typically sees the most action leading up to, and immediately after, a feasibility study. The mining industry is both highly cyclical (it rises and falls with the overall economy) and capital-intensive, because mines are expensive to build. Most common is a failure, which leaves a hole in everyone's pocket, including that of the banks and investors. Although these two groups have a very different emphasis when they speak it, they are both right – mining is big business. The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. Here's what you need to know. If a mining major has hundreds of deposits staked or being mined, the contents of any single deposit aren't likely to shake the stock value too much. It also has a petroleum business that produces oil and gas. In this view, the big risks and rewards mostly reside at the junior mining level. Nov 4, 2020, John Bromels, Scott Levine, and Lee Samaha | Riot Blockchain is one of the few cryptocurrency mining stocks on the NASDAQ. The two most important characteristics to look for are low production costs and strong balance sheets (i.e., an investment-grade bond rating, lots of cash and borrowing capacity, and manageable debt maturities). Sean Williams | See you at the top! It also invests in new technologies that reduce costs and increase productivity, such as by powering its operations with renewable energy and using autonomous vehicles to transport materials. The company routinely sells noncore mines so it can reallocate cash to other opportunities, including mine expansions and debt reduction. It's a leading producer of the three most consumed industrial metals -- iron ore, aluminum, and copper -- as well as a variety of other metals and minerals, including boron, salt, diamonds, and titanium. With the right guidance and determination, you can make some excellent investments in this field. As an aspiring mining investor, you're probably wondering whether you should invest in junior mining stocks or major mining stocks. Albemarle's numbers weren't as bad as feared. A major is the sum of all the deposits with the aforementioned goodwill tied to history. If the deposit will fetch more money on the market than it costs to dig up, then it is feasible. FNV earnings call for the period ending September 30, 2020. A junior company is a small company that is looking to find a natural resource deposit or field. A checking account is a deposit account held at a financial institution that allows deposits and withdrawals. As a result, most mining stocks have underperformed the market over the years. For the juniors, there are three possible fates. As a result, the company has built up a cash-rich balance sheet, which provides it with the financial flexibility to pay a growing dividend and invest in expanding its Tier One mining portfolio. Those factors put the company in a strong position to deliver on its vision of becoming the most valued gold mining business in the world. A new president will provide new opportunities for investors. I admire the companies outlined above, but you can pick your own great mining stocks to invest in, too! The company buys cryptocurrency and blockchain businesses while supporting blockchain technology companies. BHP Billiton (NYSE:BHP) is a diversified resources company. A mining company explores for, extracts, and processes deposits of valuable minerals and materials. The catch is that mining companies don't know exactly how much is in a given deposit until it is all dug up. Nov 11, 2020, Motley Fool Transcribing | Investors need to focus on mining companies that can weather the inevitable downturn. A change in the market value of a mineral that makes up a larger percentage of the deposits will have a much larger effect than a new deposit or a failed deposit. If you are interested enough in mining to do some research, then there is probably room in your portfolio for both mining majors and juniors. Many of these metals and materials are crucial to support the global economy. Instead, they sell the deposit (or themselves) to a larger miner and move on to search for another one. A feasibility study takes the estimated size and grade of the deposit and balances it against the costs and difficulties of extracting it all. It's able to keep costs down by operating large-scale, integrated mining assets. The copper miner fired on all cylinders last month. Hive Blockchain Technologies is a Canadian digital currency mining company that was launched in 2017 as a partnership between Foire Group and leading cloud mining services provider, Genesis Mining. Therefore, the value of a mining stock roughly follows the market value of its reserves, with a premium paid to companies with long histories of successfully bringing those reserves to market. Nov 6, 2020, Motley Fool Transcribing | This is a primer and as such, suffers from being overly broad and simplistic. Nov 5, 2020, Rich Smith | Major mining companies are no different from large oil companies, and many of the same metrics apply with a mining twist. Rio Tinto (NYSE:RIO) is a diversified mining company. Your first step is to learn about the industry. There are 17 rare earth elements but cerium, neodymium, lanthanum, … Rio Tinto is a U.K.-based multinational metals and mining company. The mining sector is popular among investors as it produces a steady stream of both previous and industrial-use metals and other raw materials. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Here's a look at some of today's best mining stocks, followed by instructions on how can pick your own mining companies to invest in. GOLD earnings call for the period ending September 30, 2020. Mining stocks are truly two distinct groups: majors and juniors. Reserves are evaluated through feasibility studies. Investing is the act of allocating resources, usually money, with the expectation of generating an income or profit. These characteristics enable Rio Tinto to make money even during weaker market conditions. WPM earnings call for the period ending September 30, 2020. Mining can be a tough business. The junior mining stocks are very nearly the exact opposite of mining majors. The company typically operates fully integrated mining assets that extract ore and process it at hubs. That supports its production and cash flow so that BHP can return value to shareholders via dividends and share repurchases. Let's conquer your financial goals together...faster. With those characteristics in mind, here are some of the top stocks in the mining sector: Here's a closer look at these top mining companies. Juniors have the potential to offer a lot of appreciation in the right market. Market data powered by FactSet and Web Financial Group.

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