Mining Super Cycle: Not All Metals Behave Alike

The mining industry is experiencing a surge in interest from generalist investors, with some experts predicting a new supercycle. This phenomenon is driven by various factors such as scarcity of critical minerals, geopolitical conflict, and the energy transition. However, Acorn Capital's Rick Squire cautions that not all metals behave similarly during this cycle.

Squire explains that gold prices have pulled back in recent months, causing a delay in capital flowing from large caps to developers and explorers. Despite this, margins remain strong at current levels, making it an opportunity for investors to find value in producers. In contrast, copper prices have hit record highs, prompting investors to shift their focus from large caps to exploration plays.

Waratah Minerals, a top pick by Squire, has seen its shares rise 35% in the past week due to exceptional drill results at its Spur gold project in NSW. However, Squire notes that this is an exception and most explorers are still struggling to raise capital. He recommends focusing on high-quality developers like Waratah and targeting lithium producers such as Elevra Lithium.

Squire's top stock picks include Waratah Minerals, Solstice Minerals, Midas Minerals, Bellevue Gold, and Rox Resources. He also sees opportunities in rare earths and oil producers with prices circling around US$100/bbl.