This Canadian Mining Stock Is a Hidden Gem

Ivanhoe Mines Ltd. (TSX:IVN) is a Canadian mining stock that looks underrated, as we kick off the 2023 summer season.

| More on:
Nickel ore is mined from the ground.

Source: Getty Images

The S&P/TSX Global Base Metals Index was down marginally in early afternoon trading on June 21. Base metals stocks have broadly bounced back since the end of May. In this piece, I want to target a Canadian mining stock that looks like a hidden gem in the beginning of the summer season. Let’s jump in.

How has this mining stock performed over the past year?

Ivanhoe Mines (TSX:IVN) is the Canadian mining stock that I want to focus on as an under-the-radar opportunity in the final weeks of June 2023. This South Africa-based company is engaged in the mining, development, and exploration of minerals and precious metals in Africa.

Shares of this mining stock have jumped 15% month over month at the time of this writing. That has pushed the stock into positive territory so far in 2023. Its shares have surged 47% in the year-over-year period. Investors who want to see more can play with the interactive price chart below.

Here’s why I’m looking to base metals to start the summer of 2023

The U.S. dollar has built momentum in late May and early June, putting some downward pressure on base metals. Commodities have also been battered by negative economic expectations.

Ivanhoe Mines runs one of the world’s largest copper mines at the Kamoa-Kakula copper projects. The spot price of copper has built nice momentum in the face of tight supply in recent weeks. Stimulus measures in China, a nation that is historically a large buyer of copper, has also provided a boost to the global copper market. Indeed, this industry is expected to see massive investment inflows in the months ahead.

Should investors be pleased with Ivanhoe’s recent earnings?

This company unveiled its first-quarter fiscal 2023 earnings on May 3. Its Kamoa-Kakula location sold 86,777 tonnes of payable copper in the first quarter. Meanwhile, Ivanhoe Mines achieved record revenue of $689 million and a record earnings before interest, taxes, depreciation, and amortization (EBITDA) of $452 million.

Ivanhoe Mines’s profit was reported at $82 million for the first quarter of 2023 — up from a profit of $22 million in the first quarter of fiscal 2022. Meanwhile, adjusted EBITDA climbed to $168 million compared to $145 million in the previous year. The company finished the quarter with a strong balance sheet that included cash and cash equivalents of $497 million. Moreover, it expects that the cash flow from its Kamoa-Kakula phase one and phase two progress should generate cash flow that will fund its phase three expansion.

Why this mining stock is a hidden gem right now

Shares of this Canadian mining stock currently possess a solid price-to-earnings ratio of 24 at the time of this writing. Meanwhile, Ivanhoe Mines is geared up for strong earnings growth going forward. This mining stock has attractive growth potential and a rock-solid track record that should attract prospective investors in the final days of June 2023.

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 Ambrose O'Callaghan 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.

More on Metals and Mining Stocks

Concept of multiple streams of income
Stocks for Beginners

Lock Up This 9.2% Dividend Yield From a Top Royalty Stock

Royalty stocks have a strong advantage when it comes to creating passive income for investors. But this one has the…

Read more »

Safety helmets and gloves hang from a rack on a mining site.
Metals and Mining Stocks

Is First Quantum Minerals Stock a Good Buy Right Now?

First Quantum is a TSX stock that trades 61% below all-time highs. However, the mining stock still trades at a…

Read more »

nugget gold
Metals and Mining Stocks

The Best Gold Stock to Invest $1,000 in Right Now

Here are two of the best Canadian gold stocks that can yield some eye-popping returns in the long run.

Read more »

nugget gold
Stocks for Beginners

The Ultimate Mining Stock to Buy With $1,000 Right Now

This mining stock just saw a drop, but don't let that keep you from diving in. This miner is due…

Read more »

A plant grows from coins.
Metals and Mining Stocks

Canadian Mining Stocks: Buy, Sell, or Hold?

Explore 2025’s top Canadian mining stocks – gold, uranium, and base metals offer big potential in a dynamic, commodity-driven market.

Read more »

farmer holds box of leafy greens
Metals and Mining Stocks

3 Reasons to Buy Nutrien Stock Like There’s No Tomorrow

Nutrien stock has lost 34% of its value just this year alone and looks incredibly cheap today. Yet, secular trends…

Read more »

Canada national flag waving in wind on clear day
Tech Stocks

Trump Trade: Canadian Stocks to Watch

With Trump returning to the presidency, there are some sectors that could boom in Canada, and others to watch. But…

Read more »

Super sized rock trucks take a load of platinum rich rock into the crusher.
Metals and Mining Stocks

Invest $7,000 in This Dividend Stock for $672 in Passive Income

High yield can be an essential requirement when you need to start even a modestly sized passive income with a…

Read more »