This article was contributed by Crush The Street.
t’s no exaggeration to say that the COVID-19 pandemic caused a sea change in commodities. The crisis gave governments and central banks an excuse to print up fiat currency units without regard to the consequences, which we’re seeing in 2021 as consumer prices skyrocket.
Prior to the pandemic, commodities were extremely undervalued compared to stock market indices like the S&P 500 and the Dow Jones. A reversion to the mean was inevitable, and COVID-19 was the fuse that lit the explosion in commodities that we’re seeing today.
Think about it: in the pre-COVID times, mines were running smoothly, and while the demand for gold, silver, and copper was high, it didn’t feel like there was a profound supply crunch.
Then, in 2020, as the world was reeling from the global pandemic, mines were shut down but the need for precious metals was still there. If anything, the demand for copper and silver as industrial metals and gold as an inflation hedge only got stronger.
Fast-forward to mid-2021: vaccines are widely available and some parts of the economy are returning to a revised version of normalcy. Yet, we can never go back to the way things were because we now live in what could be called a “shortage economy.”
Wait times for semiconductors have increased drastically. Lumber is obscenely overpriced. You almost have to be independently wealthy just to afford a new home nowadays.
As we have been preparing for, gold has increased in value against a deteriorating U.S. dollar. Investors still have a chance to get in or add to their positions since gold happens to be taking a breather now.
If you’ve listened to Max Porterfield of Callinex Mines (TSX-V: CNX & OTC: CLLXF) speak at conferences, public interviews, or you’ve spoken to him personally as I do, he’s a firm believer in hedging against inflation and has put his money where his mouth is.
He’s so much of a believer that he’s put a significant portion of his net worth into Callinex because he believes in the entire perfect storm of events that could stand to benefit miners exposed to in-demand base and precious metals, along with the belief in his award-winning team and himself.
Max is a force to be reckoned with and is on his way to making a real name for himself in the mining sector.
From our November 2019 profile, we’ve already seen a 400%+ return from its price at $0.67.
It’s very well understood that the greatest value to be unlocked in the mining stage is being invested in companies that make a discovery. This is the nature of higher risk/higher reward but I believe in having exposure to opportunities that give me this, and my money is on Max Porterfield and his team.
It’s a rare opportunity to get on the precious metal train before it leaves the station. The Federal Reserve has made it crystal clear that it won’t slow down the pace of asset purchases anytime soon, which will keep bond yields and the dollar’s value low, and that’s great news for metals and miners.
The job of gold is to really stabilize and protect your purchasing power. Now is the time to consider a position in metals and miners not only for the strong growth potential but also as a hedge in a rising inflation environment.
This year, thanks in large part to fiat currency inflation, the gold price is even higher. This is an invitation for investors to seek out premier mining companies with low all-in sustaining cash costs, healthy cash flows, and pristine balance sheets.
My strongest recommendation for your research consideration goes to Callinex Mines (TSX-V: CNX & OTC: CLLXF), a Canadian mineral exploration company that controls the emerging copper/gold/silver/zinc-rich Rainbow Deposit that was just recently discovered.
Callinex’s projects are located across three world-class mining districts in Canada, including Flin Flon, Manitoba; Bathurst, New Brunswick; and Buchans, Newfoundland.
Callinex’s entire portfolio is all located in Tier 1 jurisdictions, which significantly mitigates regional risks.
Review Callinex’s fact sheet for your own further due diligence: HERE!
Importantly, Callinex has a rock-solid capital position, with CAD$7.42 million in cash as of March 31, 2021.
These are the checkpoints that I look for when I’m ready to take a position in the commodities supercycle. It’s taking a quick break now, so you can get on board for the next rocket ride.