Although mining shares have such a massive presence on the ASX, picking the right ones to buy is still a tricky business.
That's because resource stocks are notoriously cyclical. They fluctuate wildly on the whims of commodity prices, the global economy, and simple supply and demand.
That's why it pays to listen to the experts when they recommend mining stocks that are in the low part of their price cycle.
Here are two such picks from BW Equities equity salesperson Tom Bleakley:
Image source: Getty Images
This stock is the king of the hill
The global gold price has dipped slightly since the end of May.
However, with so much uncertainty surrounding the global economy, the so-called safe haven asset might still have some legs.
That's why Bleakley reckons now might be a great buying opportunity for producers like Red 5 Limited (ASX: RED).
"The company's King of the Hills gold mine in Western Australia produced 24,033 ounces in June, up from 19,039 ounces in May," Bleakley told The Bull.
"The company retains production guidance of between 90,000 ounces and 105,000 ounces in the second half of fiscal year 2023 at an all-in-sustaining cost of between AU$1,750 and AU$1,950 an ounce."
The Red 5 share price has risen more than 23% since the end of May.
The combination of economic factors and gold prices means Bleakley is thinking Red 5 shares still have more upside risk than downside.
"We expect favourable share price momentum to continue at this stage of the cycle."
Lithium demand will not wane anytime soon
The international lithium price seems to have stalled recently, just going sideways since 24 May.
But the demand for batteries for new-world devices like electric cars will only head upwards over the next few years.
This gives a junior miner like Green Technology Metals Ltd (ASX: GT1) plenty of upside potential.
"Green Technology Metals is a North American lithium exploration and development business," said Bleakley.
"We see strategic value in Green Technology Metals as it continues to grow its lithium resource."
The company's prospects just received a huge institutional endorsement, which is a great omen for retail investors.
"It recently received a $20 million strategic investment from LG Energy Solution (LGES) at a big premium to Green Technology Metals' share price," Bleakley said.
"The agreement includes an off-take term sheet for Green Technology Metals to sell 25% of its spodumene concentrate production from its flagship Seymour project to LGES for five years."
