Junior mining stocks have the ability to make early investors very wealthy indeed. So long as you can stand the higher levels of capital risk and possess a healthy amount of patience, I think there are a number of such opportunities on the market right now. Here are just two.
A play on clean energy
With the price of uranium at a 12-year low, its not all that surprising if Berkeley Energia (LSE: BKY) has been flying under many investors radars. However, its for this very reason along with the huge potential of its wholly-owned and fully-funded Salamanca mine near Madrid that I think the shares warrant closer inspection by those who believe the demand for clean energy can only go in one direction.
Once up and running, the mine is expected to churn out 4.4m lb of uranium concentrate every year, making Berkeley one of the top 10 global producers. Whats even more remarkable, however, is the fact that the 120m cap still expects to make a profit even if uranium prices dont budge. According to the company, it will have one of the worlds lowest production costs at $15/lb far cheaper than FTSE 100 mining giants Rio Tinto or BHP Billiton.
To be sure, theres no knowing when exactly the price of uranium will recover. Nevertheless, there are a number of potential catalysts. China is expected to double its nuclear capacity in two years (and double again by 2035) and Japan is restarting its nuclear programme after it was brought to a sudden halt following the Fukushima disaster in 2011. With hundreds of US and EU utilities also re-contracting up to one billion pounds of uranium over the next five years, Berkeley believes we are approaching a major demand/supply tipping point.
Based on the notion that the only way to outperform the market is by doing the things that the majority of investors cant or wont, Berkeley looks a very interesting proposition at the current time.
Cop a load of this
Whether you like the idea of driving an electric vehicle or not, youd better get used to the fact that the automotive industry is changing at a furious pace.
One potential way of profiting from this is to buy shares in copper-focused miners such asAsiamet Resources (LSE: ARS), particularly as the current oversupply of the metal wont last forever.
The 54m caps shares have rallied over the last few days following the release of an encouraging update on recent drilling near the companys Beruang Kanan Main (BKM) prospect on the island of Kalimantan. In addition to its huge feasibility-stage copper project,Asiamet now believes it has found a standalone polymetallic deposit with tests revealing high grades of zinc, lead, silver and gold.
Aside from its assets (which also include the Jelai Gold project and part-owned Beutong resource), one other thing worth bearing in mind is the track record of Asiametsmanagement team. Chairman and significant shareholder Tony Manini, for example, built up a $20m miner (Oxiana Ltd) into a 6bn commodity giant in just eight years. Sounds to me like hes a good person to have around.
Like Berkeley Energia,Asiamet isnt a stock for those with short investing horizons. Nevertheless, the prize for those able to sit on their hands could be worth the wait.
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