The TSX is down about 8.2% right now, which is less than the S&P 500 and NASDAQ, but it’s still quite a dip. Inflation is at an all-time high, and combined with a probability of a recession, it’s pointing towards a good investment opportunity: buying gold stocks. Right now, most gold stocks are heavily discounted.
Still, as more focus shifts towards them, the more rapidly they are likely to rise in the coming weeks, offering you decent capital appreciation.
A mid-cap gold stock
Centerra Gold (TSX:CG) is a Toronto-based gold mining company with a market cap of around $3 billion. It primarily operates in North America but also has a presence in Turkey. The local reserves (in Canada) are adequately substantial for a miner. Its size and its foreign interests are pretty promising as well. Apart from gold, the next largest reserves the company holds are copper.
The stock initially peaked around the Great Recession. After a massive fall between 2012 and 2013, the stock experienced a steady rise for the next five years. It has been quite cyclical in the last five years, rising and falling by substantial margins. It has fallen by about 42% from its post-pandemic peak and is ripe for a bull run if gold gets the limelight.
A large-cap gold stock
If you are looking for discounted giants in the Canadian gold mining sector, Agnico Eagle Mines (TSX:AEM)(NYSE:AEM) is a senior gold mining company that has been operating for over six decades. It has an extensive operations portfolio with mines in three countries: Canada, Mexico, and Finland. Most of the company’s operational mines are in Canada.
Agnico is a smart investment not just because of its extensive 37% discount from its 2020 peak but also because of the dividend. Thanks to the recent fall, the stock is currently offering a decent yield of 2.9%. If it falls a little further and the recovery potential takes it to or beyond its 2020 peak, it might double your money in a couple of years.
A small-cap gold stock
Falcon Gold Corp (TSXV:FG) Falcon is a Canadian mineral exploration company focused on generating, acquiring, and exploring opportunities in the Americas. Falcon’s flagship project, the Central Canada Gold Mine, is approximately 20km southeast of Agnico Eagle’s Hammond Reef Gold Deposit which has currently estimated 3.32 million ounces of gold (123.5 million tonnes grading 0.84 g/t gold) mineral reserves, and 2.3 million ounces of measured and indicated mineral resources (133.4 million tonnes grading 0.54 g/t gold). The Hammond Reef gold property lies on the Hammond shear zone, which is a northeast-trending splay off the Quetico Fault Zone (“QFZ”) and may be the control for the gold deposit. The Central Gold property lies on a similar major northeast-trending splay of the QFZ.
The Company holds 8 additional projects. The Esperanza Gold/Silver/Copper mineral concessions located in La Rioja Province, Argentina. The Springpole West Property in the world-renowned Red Lake mining camp; a 49% interest in the Burton Gold property with Iamgold near Sudbury Ontario; and in B.C., the Spitfire-Sunny Boy, Gaspard Gold claims; and most recently the Great Burnt, Hope Brook, and Baie Verte acquisitions adjacent to First Mining, Matador, Benton-Sokoman’s JV, and Marvel Discovery in Central Newfoundland.