The Hottest Canadian Mining Stocks to Watch in June 2023

Take a closer look at these two stocks if you’re searching for high-quality Canadian mining stocks to add to your self-directed portfolio.

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Super sized rock trucks take a load of platinum rich rock into the crusher.

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Businesses involved in exploring, extracting, and processing mineral and metal deposits are called mining companies. Several of the minerals mined by these companies play a critical role in the economy, being used as crucial materials across various industries.

In periods of economic expansion, many of these mined materials generate substantial demand, driving prices higher and benefitting the companies. For some metals like gold, volatile market environments increase their demand.

Canada is home to several high-quality companies you can add to your portfolio to gain exposure to the mining sector. Mining stocks can be an excellent way to diversify your portfolio. That said, it is essential to understand that these stocks are cyclical. The changing demand for underlying commodities mined by the companies can impact their returns to shareholders.

Today, we will look closely at two top-notch Canadian mining stocks, with one focused on lithium and the other on gold.

Lithium Americas

Lithium Americas (TSX:LAC) is a lithium mining company that might offer stellar, outsized returns to shareholders in the coming decade. The demand for lithium increases daily due to its role in the production of battery-powered electric vehicles (EVs).

The metal is also useful for various other clean energy solutions. As the world continues phasing out the use of traditional energy products, lithium will become more popular.

Lithium Americas is one of the major players in this space. The $3.71 billion market capitalization company is headquartered in Vancouver and expects to begin generating revenue by the end of this year. LAC has secured substantial investments to support its cash burn until it begins generating revenue.

One of the most notable investments came from American auto giant General Motors, adding US$650 million for the Canadian company to use. Analysts anticipate the company to report $350 million in revenue in fiscal 2023 and almost twice that in 2024.

As of this writing, LAC stock trades for $27.61 per share. At a 35.52% discount from its 52-week high, it could be the right time to add its shares to your portfolio for capital gains once the economy improves.

Barrick Gold

Gold is the go-to safe-haven asset for investors when the economy is volatile, and Barrick Gold (TSX:ABX) is a mining stock that tends to benefit from it. When markets experience downturns, gold’s value increases. As investors panic due to uncertainty, many typically shore up as much gold as possible. Savvier investors understand that owning gold directly is not an easily liquid investment.

Instead of taking money out of the market, investing in gold mining stocks offers exposure to rising gold prices.

Boasting a $650.66 million market capitalization, the Toronto-based gold miner is one of the biggest names in this space. The company has 16 sites across 13 countries worldwide, producing gold and copper.

Aiming to produce an average of 6.5 million ounces of gold annually across the decade, Barrick Gold looks like a solid investment. After recent gold price hikes, the company has managed to reduce its debt significantly. By selling non-core assets, it has also secured solid free cash flows to weather harsh economic environments as well.

As of this writing, Barrick Gold stock trades for $22.05 per share. Down by 21.78% from its 52-week high, it can be a good time to invest in Barrick Gold stock for a bargain.

Foolish takeaway

Due to the cyclical nature of the mining industry and the broader market, your investment in mining stocks can appreciate and depreciate significantly. However, mining stocks with sound operations, solid fundamentals, and strong long-term growth potential can be worth holding onto amid market volatility.

Since gold is a timeless safe-haven asset and lithium is pivotal for a cleaner future, Barrick Gold stock and Lithium Americas stock can be excellent buy-and-hold assets for Canadian investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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