Proactive Investors - Glencore PLC (LSE:LON:GLEN)’s attempt to acquire Teck Resources (TSX:TECKa) Ltd (TSX:TECK.B) as well as Newmont Corporation’s sweetened takeover offer for Newcrest Mining Limited (ASX:NCM), Australia’s largest listed gold miner, have helped boost investor interest in mining stocks recently.
Shares of Teck Resources, for example, have surged 33% over the last six months, while Rio Tinto PLC (LSE:LON:RIO)’s NYSE-listed stock has moved 25% higher during the same time.
Gold and copper prices, meanwhile, have climbed 20% and 17%, respectively, over the past half year, lifted at least in part by inflation fears and copper’s key role in the electrification of a ‘greener’ global economy.
All of which could suggest we are in the early stages of a resource bull market.
In fact, Goldman Sachs (NYSE:NYSE:GS) head of commodities Jeff Currie last month said he expects a commodities supercycle driven by China and aided by concerns triggered by the US banking sector.
Meanwhile, Glencore estimates that global demand for copper could double in the next 30 years, as reported by Forbes in an article that also asserts that over the last few decades copper producers have trimmed their exploration budgets, thus preventing the industry from being able to quickly ramp up production.
Investors and speculators have also directed their buying power during the past six months at some junior and early-stage exploration names, such as Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) (up 45%), TNR Gold Corp (TSX-V:TNR, OTC:TRRXF) (up more than 50%), Steppe Gold Ltd (TSX:STGO, OTCQX:STPGF) (up 16%), and Equity Metals Corp (up more than 270%), to name a few.
Historically, mining bull markets have benefitted the senior producers first, followed by the intermediates and juniors, and finally the resource sector’s most speculative stocks.