Infographic: 11 Things Every Metal Investor Needs to Know About Zinc
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11 Things Every Metal Investor Needs to Know About Zinc

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Certain commodities tend to fly under the radar for periods of time.

For example, it was only in the last couple of years that markets have been able to digest the potential impact of the electric vehicle boom, and what it may mean for raw materials. The lithium, graphite, and cobalt prices reacted accordingly, and suddenly these essential ingredients for lithium-ion batteries were hot commodities.

Another one of those metals that comes and goes is zinc – and after shooting up in price over 35% this year, it definitely has the attention of many investors and speculators again.

Re-Thinking Zinc

Today’s infographic comes to us from Pistol Bay Mining, a company that is too focusing on zinc, and it highlights 11 things that investors need to know about a metal that is gaining substantial momentum.

11 Things Every Metal Investor Needs to Know About Zinc

Here’s why the metal is back in fashion:

1. Zinc is a $34 billion per year market.
It’s bigger than the silver ($18 billion), platinum ($8 billion), and molybdenum ($5 billion) markets combined. In fact, it is the fourth-most used metal worldwide.

2. Zinc smelting and production technology came way later than it did for other metals.
The ancients were able to smelt copper, lead, and iron, but it wasn’t until much later that people were able to work with zinc in any isolated state.

3. Even despite this, it was a crucial metal for ancient peoples.
They would smelt zinc-rich copper ores to make brass, which was used for many different purposes including weaponry, ornaments, coins, and armor.

4. Zinc is also crucial to produce many alloys today.
For example, brass is used for musical instruments and hardware applications that must resist corrosion. Solder and nickel-silver are other important alloys.

5. The world’s first-ever battery used zinc as an anode.
The voltaic pile, made in 1799 by Alessandro Volta, used zinc and copper for electrodes with brine-soaked paper as an electrolyte.

6. The metal remains crucial for batteries today.
Zinc-air, silver-zinc, zinc-bromine, and alkaline batteries all use zinc, and they enable everything from hearing aids to military applications to be possible.

7. Galvanizing is still the most important use.
About 50% of the metal is used in galvanizing, which is essentially a way to coat steel or iron so that it doesn’t rust.

8. China is both a major producer and end-user.
China mined 37% of the world’s 13.4 million tonnes of zinc production in 2015. It consumed 47% of the world’s supply that same year.

9. Major mines have been shutting down.
In 2016, China ordered the shutdown of 26 lead and zinc mines in parts of the Hunan province for environmental reasons. Meanwhile, Ireland’s Lisheen Mine and Australia’s Century Mine both shut down last year after being depleted of resources. That takes 630,000 tonnes of annual production off the table.

10. Stockpiles are dwindling.
Warehouse levels are less than half of where they were in 2013.

11. Zinc has been one of the best performing metals in 2016 in terms of price.
It started the year around $0.70/lb, but now it trades for $1.04/lb.

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Gold

How Gold Royalties Outperform Gold and Mining Stocks

Gold royalty companies shield investors from inflation’s rising expenses, resulting in stronger returns than gold and gold mining companies.

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gold royalty company returns compared to gold and gold mining companies
The following content is sponsored by Gold Royalty
Infographic on gold royalty company returns

How Gold Royalties Outperform Gold and Mining Stocks

Gold and gold mining companies have long provided a diverse option for investors looking for gold-backed returns, however royalty companies have quietly been outperforming both.

While inflation’s recent surge has dampened profits for gold mining companies, royalty companies have remained immune thanks to their unique structure, offering stronger returns in both the short and long term.

After Part One of this series sponsored by Gold Royalty explained exactly how gold royalties avoid rising expenses caused by inflation, Part Two showcases the resulting stronger returns royalty companies can offer.

Comparing Returns

Since the pandemic lows in mid-March of 2020, gold royalty companies have greatly outperformed both gold and gold mining companies, shining especially bright in the past year’s highly inflationary environment.

While gold is up by 9% since the lows, gold mining companies are down by almost 3% over the same time period. On the other hand, gold royalty companies have offered an impressive 33% return for investors.

In the graphic above, you can see how gold royalty and gold mining company returns were closely matched during 2020, but when inflation rose in 2021, royalty companies held strong while mining company returns fell downwards.

 Returns since the pandemic lows
(Mid-March 2020)
Returns of the past four months
(July 8-November 8, 2022)
Gold Royalty Companies33.8%1.7%
Gold9.1%-1.7%
Gold Mining Companies-3.0%-8.6%

Even over the last four months as gold’s price fell by 1.7%, royalty companies managed to squeeze out a positive 1.7% return while gold mining companies dropped by 8.6%.

Gold Royalty Dividends Compared to Gold Mining Companies

Along with more resilient returns, gold royalty companies also offer significantly more stability than gold mining companies when it comes to dividend payouts.

Gold mining companies have highly volatile dividend payouts that are significantly adjusted depending on gold’s price. While this has provided high dividend payouts when gold’s price increases, it also results in huge dividend cuts when gold’s price falls as seen in the chart below.

chart of gold royalty company dividends vs gold mining company dividends

Rather than following gold’s price, royalty companies seek to provide growing stability with their dividend payouts, adjusting them so that shareholders are consistently rewarded.

Over the last 10 years, dividend-paying royalty companies have steadily increased their payouts, offering stability even when gold prices fall.

Why Gold Royalty Companies Outperform During Inflation

Gold has provided investors with the stability of a hard monetary asset for centuries, with mining companies offering a riskier high volatility bet on gold-backed cash flows. However, when gold prices fall or inflation increases operational costs, gold mining companies fall significantly more than the precious metal.

Gold royalty companies manage to avoid inflation’s bite or falling gold prices’ crunch on profit margins as they have no exposure to rising operational expenses like wages and energy fuels while also having a much smaller headcount and lower G&A expenses as a result.

Along with avoiding rising expenses, gold royalty companies still retain exposure to mine expansions and exploration, offering just as much upside as mining companies when projects grow.

Gold Royalty offers inflation-resistant gold exposure with a portfolio of royalties on top-tier mines across the Americas. Click here to find out more about Gold Royalty.

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Mining

The Next Generation of Uranium Deposits

Canada’s Athabasca Basin has the highest-grade uranium deposits in the world.

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The following content is sponsored by Skyharbour Resources

The Next Generation of Uranium Deposits

Government policies are shifting in favor of nuclear energy as countries try to reduce carbon emissions.

Unlike coal, oil, or gas, nuclear power plants produce little to no CO₂. As a result, nuclear is the second largest source of low-carbon electricity in the world, behind hydropower.

In this infographic from Skyharbour Resources, we look closely at the next generation of uranium deposits necessary to power up the nuclear sector.

The Uranium Supply Squeeze

Roughly 440 nuclear reactors operating worldwide generate around 10% of the world’s electricity annually.

In the United States, for example, nuclear energy provides 52% of carbon-free electricity, and in the European Union, it accounts for 43%. In three European countries, the share of nuclear energy in the electricity mix exceeds 50%.

RankCountryNuclear Share of Electricity Mix
1France 🇫🇷70.6%
2Slovakia 🇸🇰53.1%
3Ukraine 🇺🇦51.2%
4Hungary 🇭🇺48.0%
5Bulgaria 🇧🇬40.8%
6Belgium 🇧🇪39.1%
7Slovenia 🇸🇮37.8%
8Czechia 🇨🇿37.3%
9Armenia 🇦🇲34.5%
10Finland 🇫🇮33.9%
11Switzerland 🇨🇭32.9%
12Sweden 🇸🇪29.8%
13South Korea 🇰🇷29.6%
14Spain 🇪🇸22.2%
15Russia 🇷🇺20.6%
16Romania 🇷🇴19.9%
17United States 🇺🇸19.7%
18Canada 🇨🇦14.6%
19United Kingdom 🇬🇧14.5%
20Germany 🇩🇪11.3%

All of the world’s nuclear reactors are powered by uranium. They require approximately 67,500 tonnes of uranium annually. However, the uranium market has been in a growing deficit since 2015, with the widening demand-supply gap being filled by civil stockpiles and secondary sources.

The World Nuclear Association expects a 27% increase in demand between 2021 and 2030.

In addition, the recent energy crisis following Russia’s invasion of Ukraine has led investors to the uranium market, betting on nuclear energy to shift away from fossil fuels. In this scenario, new uranium mines are expected to come online in the next decade to meet the demand.

The World’s Richest Uranium Region

Canada is the world’s second-largest producer of uranium, accounting for roughly 13% of total global output.

The country’s Athabasca Basin has the highest-grade uranium deposits in the world, with grades that are 10 to 100 times greater than the global average. The Northern area covers almost a quarter of Saskatchewan and a small portion of Alberta.

The region— sometimes described as the “Persian Gulf of uranium” — is home to Cameco’s Cigar Lake, the world’s richest uranium mine.

According to the Fraser Institute, Saskatchewan ranks as the second-best mining jurisdiction in the world. The province appears only behind Western Australia regarding geologic attractiveness, government policy, and attitudes toward exploration investment.

In recent years, many uranium companies have made uranium discoveries in the basin, with Skyharbour Resources among them. The company holds an extensive portfolio of fifteen uranium exploration projects, ten of which are drill-ready, covering 450,000 hectares of mineral claims.

The U.S. Nuclear Future

While the Biden Administration is urging lawmakers to pass a $4.3 billion plan to purchase enriched uranium from domestic producers, the country’s production is still considered small in scale.

For this reason, Athabasca Basin and companies like Skyharbour Resources are expected to play a key role in the U.S.’ nuclear future.

Skyharbour Resources is becoming an industry leader in high-grade Canadian uranium exploration needed for nuclear power and clean energy.

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