This week, our investment-savvy readers have shown a particular interest in mining companies, ranking them as the top three most-read stories.

Even though the recent positive news of the easing of inflation in Canada gave investors a reprieve, the stock market index is poised to end the week like a mound: low at the beginning, high in the middle and low at the end. It has not been a particularly good week for investors, as the index virtually returned to the level where it started.

By 1.00 p.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index had lost 0.92 per cent this week compared to the past few weeks when it had been in positive territories. In the past month, the index had gained 1.18 per cent. In the past three months, it had lost 3.96 per cent, while in the past year, it had lost 3.48 per cent.

The benchmark TSX index was set for its second consecutive weekly drop. All the sectors of the market were in negative territories.

Perhaps, investors are cashing out on the gains made in the past month. Conservative investment could also be a factor. It is a known fact that the stock market is like the earth, which rotates and revolves, coming up with different time and weather conditions. Sometimes it is sunny. Sometimes it is dark. Sometimes it rains, and sometimes the heat is unbearable.

What could be attracting our investing readers to metal stocks? Metal stocks encompass companies that mine, process, or invest in the extraction of precious metals such as gold, silver, platinum, and palladium. Also included in this list are companies that mine and process industrial metals such as copper, iron ore, and aluminum ore, as well as those that convert raw metal materials like iron ore into more valuable metal products such as steel.

As far as human knowledge can date back, precious metals have been used as a store of value. Gold and silver, especially, have remained ever precious all through the ages.

According to Investopedia, investing in precious metals, especially gold, is attractive because of some factors.

Gold preserves wealth. Gold has continued to be relevant even after thousands of years because of its ability to store wealth. Over the years, currencies and other items tend to lose value much faster than gold. In the face of inflation, gold tends to hold its ground better, thereby serving as a hedge against inflation.

Gold serves as a safe haven. At times of turmoil or uncertainty, gold serves as a safe haven for investors to store their investment. It tends to protect their investment better.

Those who don’t want to own physical gold and other precious metals tend to look at investing in mining companies. This is because of the belief that the performance of precious metals usually translates to improved performance of the stocks in the mining sector.

However, it should be noted that the mining sector can experience high volatility. For example, in the third week of June, Canadian mining, metals and lumber stocks fell heavily, wiping out the 27 per cent they had gained since the beginning of the year, no thanks to the effect of inflation, rising interest rates and slowing global growth weigh on the companies.

Therefore, before choosing the stocks to invest in, investors should evaluate the stocks, paying attention to the performance of their dividends, their dividend ratio payout, and the performance of the stocks over time. These are key elements in a prospective company’s balance sheet and other financial statements.

The ability of a company to sustain healthy dividend payouts is greatly enhanced if it has consistently low debt levels and strong cash flows.

Now, let’s look at the stories that interested our readers this week.

RooGold (CSE:ROO) receives assays from prospect sampling at Lorne Project

RooGold has received high-grade gold assays from the Lorne project in New South Wales, Australia.

A total of 22 rock samples were collected at two prospects, namely the Brands Reef and Norton Mine.

CEO Carlos Espinosa spoke with Sabrina Cuthbert about the prospect sampling program

RooGold is a junior venture gold and silver exploration company active in New South Wales, Australia.

RooGold Inc was unchanged within the week, trading at C$0.050 at 11:57 a.m. ET.

Brascan (CSE:BRAS) announces share exchange agreement

Brascan Gold and its subsidiary Brascan Aggregates have agreed to acquire 25 per cent of the issued and outstanding shares of North Atlantic Aggregates Inc.

Under the terms of the agreement, claimholders have agreed to transfer their interests in 49 mineral claims to NAAI prior to the closing of the transaction.

Brascan will issue 10,000,000 common shares at a deemed price of $0.08 per share

Balbir Johal, Director & CEO, sat down with Sabrina Cuthbert to discuss the agreement.

Brascan has agreed to incur $350,000 in exploration expenditures before the first anniversary of the agreement and $650,000 in exploration expenditures before the second anniversary of the agreement.

Brascan Gold Inc was down 12.50, trading at C$0.035 at 12:10 p.m. ET.

Silver Bullet Mines (TSXV:SBMI) provides update on Washington Mine

Silver Bullet Mines has provided an update on its ongoing operations at the Washington Mine in Idaho.

Peter Clausi, VP of Capital Markets, sat down with Daniella Atkinson to discuss the update

Site work has commenced preparing the property for rehabilitation and production. A local portable sawmill operator is on-site to prepare to mill timbers. A contractor has been scheduled to upgrade the access road and to establish site water, electricity and storage.

Contract terms have been negotiated with an underground mine contractor and, subject to completion of a federal agency filing and the approval of mine design by the company’s mine engineer, underground rehabilitation is anticipated to begin in or about October.

Silver Bullet Mines was down 4.35 per cent in the week, trading at C$0.22 at 12:16 p.m. ET.

Be sure to join us again next week and enjoy your weekend.


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