Over the last few weeks, I’ve been on the road from Sydney to Noosa, attending key mining conferences.

It’s certainly offered some useful insights.

I’ve had the chance to speak directly with mining insiders, investors, government delegates, and CEOs from junior and mid-cap mining stocks.

So, what did I find out?

Some clear trends are emerging in the sector right now.

And this could serve up some interesting investment opportunities, like this one…

Tech and Mining… An Unlikely Marriage

Now, I don’t profess to know much about the latest happenings in the tech sector—that’s something I leave to my colleagues Ryan Dinse and Charlie Ormond!

But tech is most definitely making its way into mining and exploration.

That’s no small thing.

It might surprise you to know that mining has traditionally been a slow adopter of new innovations.

Miners prefer to stick with what they understand.

But that could change rapidly, given all the challenges this sector faces right now…companies can either adapt (with the help of tech) or perish!

Tech entrepreneurs are sniffing out an opportunity amid the miner’s struggles.

One issue is the dearth of experienced mining professionals.

The last commodity bust cleared out a lot of experienced engineers, geologists and technicians through mass redundancies and retirements.

Tech could fill the void for mining companies struggling to find experienced personnel to grow their business.

Another big problem is the shrinking grades at established operations.

But here again, technology is coming up with solutions.

One tech company I spoke to is looking to improve ore processing. It uses AI-integrated software to help miners recover more metal for each tonne of rock mined.

That could offset the problems of declining output at established mine sites.

Then there’s the issue of making new discoveries, another area where tech is looking to plant its flag…

While exploration geologists aren’t being replaced with AI (yet!), the role of the geologist could soon change.

Geologists logging drill core in the field could soon be replaced with specialised scanning machines.

I saw examples of these in Sydney.

AI is also being used to troll through vast volumes of historical data, enabling geologists to fine-tune a project for new drill targets quickly.

So, how does this relate to a future investment opportunity?

From what I can tell, if technology can improve the odds of discovery success, then those companies holding the most prospective land will benefit the most.

Explorers operating in richly endowed areas or regions close to existing mines. In other words, places where the odds of making a discovery are higher.

As always… land is king!

But as exciting as that sounds, that’s not the major investment idea I pulled from my November Road Trip…

Critical minerals are not dead

The push to invest in critical mineral projects is here to stay.

And that’s despite stocks across the sector collapsing over the last 18 months.

Governments have no intention of rescinding their commitment to securing critical mineral supply chains.

That was made clear to me over the last few weeks.

The IMARC mining conference in Sydney was brimming with government delegates from across the globe.

In fact, I spoke to one lady who worked within the UK minerals department.

The sole purpose of her trip was critical minerals…determining how Australia could help the UK secure a supply chain outside China’s dominance.

I asked her which critical mineral her department was looking at… She said all of them!

While investors wax and wane over the critical mineral theme, governments can’t afford to keep their supply tied to one source… China.

That’s especially true now, given Trump looks set to ramp up trade pressure against the Middle Kingdom.

Straining relationships could force China to respond with export restrictions over key critical minerals.

So why aren’t investors taking advantage?

No doubt, smaller investors bailed on critical minerals long ago.

Yet governments and large companies remain as committed as ever to the critical mineral theme.

Take Rio Tinto’s whopping $9.9 billion bet on lithium miner Arcadium [ASX:LTM] last month. This stock happened to be in our Diggers & Drillers portfolio.

Arcadium is a lithium miner with projects across Australia, Argentina and Canada.

However, the key feature is its downstream processing capacity.

Rather than sending ore to China, Arcadium processes much of its battery-grade lithium in the US. It’s also building major processing facilities in Japan and Canada.

Rio Tinto’s bid on the company last month was as much a play on its ore reserves as it was about securing downstream capability for lithium.

So, does that mean we’re close to a floor in this sector?

One of the world’s biggest miners thinks so…

Rio Tinto made a major counter-cyclical bet last month, which could deliver a long-term payback.

Look around you…

Critical metal stocks, including lithium, rare earths, and graphite, have all been hammered over the last 18 months.

Bargains are everywhere!

So, if you’re looking for value, why not consider positioning yourself like one of these big miners?

This is how some of the world’s largest mining companies rose to the top…

20 years ago, it was BHP.

The company made a counter-cyclical bet on Western Mining Corporation (WMC).

Securing the giant copper-gold Olympic Dam mine in South Australia, plus several other major mining projects just before the early 2000s commodity boom.

This timely takeover established BHP as the world’s largest mining firm.

A counter-cyclical bet that continues to pay dividends 20 years on.

Here’s another example:

In 2013, a geo and a couple of mining engineers went bargain hunting in the Eastern Goldfields, WA.

That was amid a deep bear market in the gold sector.

This junior snapped up dirt-cheap assets being flogged off by the Canadian gold miner, Barrick Gold.

Barrick wanted to leave Australia quickly, head back home, and escape the carnage happening in the global gold market—just like critical mineral stocks today!

But less than 10 years later, those counter-cyclical purchases positioned this junior into one of Australia’s largest producers.

From an unheard-of penny stock to the country’s largest gold miner!

The company I’m talking about is Northern Star Resources [ASX:NST].

It arrived from nowhere and ascended rapidly.

And it was all thanks to its decision to buy quality assets when no one was interested.

Returning to the opportunity in
critical minerals

This sector has been hemorrhaging for over 18 months now.

So, why not consider positioning yourself like one of these success stories and make your own counter-cyclical bet?

Snap up bargain assets and potentially reap the benefits for years to come.

But you can’t just buy any company. You need to understand which projects will survive, like the Arcadium example I gave you.

That includes understanding the geology, the foundation that underpins a good project versus a poor one.

As a former geologist, I try to determine whether management can deliver on its promises to my paid readership group.

Due diligence that comes from working on the inside!

To find out more, click here.

Regards,

James Cooper,
Editor, Mining: Phase One and Diggers and Drillers

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