Gold stalled, but miners looking good

the Philippines” and Torontobased Torex Gold Resources Inc. as examples of stocks that show potential for a rise in their net asset values.

OceanaGold could trade close to seven times its cash flow multiples “if the Philippines political discount alleviates a bit,” he said. The company currently trades at about 5.9 times, according to analyst estimates. Torex can add to its mine plan from nearby deposits, Beer said.

Among metal companies, he calls Vancouver-based Teck Resources Ltd. a “great company,” with zinc exposure, followed by HudBay Minerals Inc. Beer also likes Arizona Mining Inc., which is a couple of years away from permitting its zinc project in the state. “With the Trump administration arguably making things easier to permit in United States, Arizona Mining looks like an interesting project.”

He also likes Ivanhoe Mines Ltd. as chairman and co-founder Robert Friedland “has assembled three of the best undeveloped project in the world.” One of Ivanhoe’s projects, Kipushi, is basically 18 months away from first zinc production, Beer said.

Among base-metals miners, “there is not many places to go for growth” other than First Quantum Minerals Ltd., Beer said.

Teck Resources, BHP Billiton Ltd. and Rio Tinto Group are trading at a free cash-flow yield of 13 per cent to 15 per cent this year alone. “In two to three years’ time, investors could get 30 per cent of the market cap as cash flow, which is attractive,” Beer said.

As for oil, crude slumped the most in more than a year as data showed U.S. stockpiles at a record. West Texas Intermediate for April delivery fell $2.86, or 5.4 per cent, to settle at $50.28 a barrel on the New York Mercantile Exchange, the lowest close since Dec. 7.