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Junior mining stocks have taken on the chin as investors fret about COVID-19. However, if governments around the world spend big to help offset the economic damage associated with the virus, we could be heading towards a G-economy.
Under that scenario inflation could surprise on the upside which would boost the appeal of precious metals and mining shares. For speculators recent weakness in junior mining provides plenty of opportunity. Insiders have been using the sell-off to go bargain hunting.
Mining luminary Robert Friedland has been buying at Africa focused Ivanhoe Mines. Mr. Friedland, along with other insiders, spent a combined $2.1 million picking up shares in the public market in March. The company is working to advance three project, two base metals projects in the DRC and a platinum-palladium project in South Africa.
Secondly, and closer to home, the CEO of BC focused Talisker Resources spent about $80,000 picking up shares in the public market in March.
While a G-economy is by no means guaranteed, the chances of it unfolding are greater than zero. As such there is a compelling case for at least some exposure to mining stocks or precious metals.
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