2 Under-the-radar mining stocks to buy now

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The main Canadian stock market index closed lower towards the end of April 2022. The TSX lost 5.15% for the month and fell to its lowest level in three months. None of the 11 primary sectors advanced, although energy stocks (+47.58%) and materials (+13.86%) remain up to date to date.

If the global economy continues to weaken and increases financial uncertainty, gold producers should attract more attention. For some market watchers, opportunities in the mining sector will outweigh risks after rebounding in 2021. Lundin Mining (TSX: LUN) and Oceana Gold (TSX: OGC) is flying under the radar, and it’s an interesting buy today.

diversified base mineral mine

Lundin Mining produces not only gold, but also copper, nickel and zinc. The $9.12 billion diversified base metals mining company has operations and projects in Argentina, Brazil and Chile. Portugal, Sweden and the United States. This mining stock has generated a respectable total return of 69.66% (19.19% CAGR) in 3.01 years.

As of this writing, Lundin is trading at $11.73 per share and paying a dividend of 3.07%. Moreover, the stock has outperformed its broader market year to date (+20.61% vs -2.17%). Management is proud of the 125% increase in quarterly dividends in the past year. Given the excellent operating and financial results in the first quarter of 2022, Lundin deserves to be on your buying list in May 2022.

In the three quarters ended March 31, 2021, total revenue increased 45.4% to $991.1 million compared to the first quarter of 2021. Net profit, or net profit, increased 145% year-over-year to $378.1 million. Notably, free cash flow was inflated by 233% to $186.5 million compared to the same quarter of 2021.

With operations performing well during the quarter, management said Lundin is on track to achieve its overall production guidance. Higher copper and gold production in the first quarter of 2022 generated $317.3 million in cash flow from operations, or a 100% increase over the first quarter of 2021.

For 2022, management is of the view that supply chain availability will not have a material impact on operations. However, higher energy and fuel prices, contractor costs and consumables will affect Lundin’s operating costs for the rest of the year.

Organic Growth Projects

Australia-based OceanaGold operates in New Zealand, the Philippines and the United States. This $2.25 billion multinational gold producer has been around for 30 years and boasts a portfolio of well-established operating assets. The stock is also a big flyer in 2022 with gains of 45.45% year-to-date. At $3.20 per share, the one-year delayed price return is 46.79%.

“OceanaGold started the year strong with the first quarter safely delivering record quarterly revenue, EBITDA and significant free cash flow,” said Gerard Bond, newly appointed President and CEO. In the first quarter of 2022 (the quarter ended March 31, 2022), the company generated record quarterly revenue and EBITDA.

Net profit of $78.6 million represents a 391% increase over the first quarter of 2021. Total gold production increased 61% year-over-year to 134.035 ounces. Bond added: “While there is a lot to celebrate in the quarterly results, we also know that there is a lot of work ahead to improve the entire business potential.”

OceanaGold is the top choice because of its pipeline of organic growth projects. Management said these projects should create additional value for shareholders.

Visible growth

Investors are worried because they fear slowing economic growth. However, growth is still looming for Lundin and OceanaGold, despite volatile market conditions.

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