Inflation Station — Could This Be A Good Time For Investors To Turn To Precious Metals?

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America and other countries around the globe are seeing higher inflation. The economic phenomenon has caused a surge in the prices of food, goods, and services.

Although inflation has been relatively stable in the past decade, prices began ascending from 2021.

For some context, in December, consumer prices rose 7% from the previous year — the biggest increase in almost 40 years. It is the most inflationary year since the late 1970s and early 1980s.

Economists estimate that while price pressures are likely to ease sometime this year, the inflation rate will probably exceed 3% by the end of 2022. Just as increasing inflation has implications for businesses and workers, it can also send shockwaves to the stock market.

Shockwaves sometimes create uncertainty in the investor community, with many looking for alternative investments. Traditionally, precious minerals and real estate have a reputation as good inflation hedges — they can often protect the value of an investment.

Precious Metal: A Top Inflation Hedge?

During U.S.’s most extreme inflationary period — 1968 to 1982 — the consumer price index rose an average of 7.3% per year, and during that period, gold gained 17.1% per year. The performance of gold and other precious metals over the years may make a case that they provide a better inflation hedge than base metals and other commodities.

Because of such assurances, mining players like Callinex Mines Inc. CLLXF, BHP Group BHP, and MP Materials Corp. MP tends to receive a lot of interest from the investor community.

A growth-oriented company like Callinex could be an attractive destination for investors during such economic times.

Recent reports suggest that the company is advancing its portfolio of base and precious metals-rich deposits — of gold, silver, zinc, lead, and copper — located in established Canadian mining jurisdictions.

Callinex issued a preliminary economic assessment on its Nash Creek and Superjack Project that projects a pre-tax internal rate of return (IRR) of 34.1% (25.2% post-tax) and net present value (NPV) 8% of $230 million ($128 million post-tax).

Can Callinex Deliver During A Precious Mineral Shortage?

Concerns that existing silver, copper, zinc, lithium, and platinum supplies are inadequate to meet future needs with a 30% to 40% gap versus demand may present an opportunity for companies like Callinex.

As the world shifts toward clean energy, zinc is vital in manufacturing wind turbines and solar panels. In the case of silver, there was a supply deficit of 7 million ounces late last year when the overall demand for the metal was expected to grow by 15% to 1.29 billion ounces — its highest level in six years.

Callinex has reported advancements for some years now of increasing the mining of precious metals. The company in 2020 announced the discovery of the high-grade Rainbow Deposit which hosts copper, gold, silver and zinc.

Later that year Rainbow received an endorsement when it received a $300,000 grant from the Manitoba Mineral Development Fund (MMDF) to advance the discovery, unique for its very high concentrations of copper as well as gold, silver and zinc.

Callinex followed it up with an announcement in December last year about progress on its 2021 drilling out the Rainbow Deposit to define its size and mineralized zones.  The Company had just three holes entering 2021 and by year-end Rainbow had been defined by over 70 drill holes.

Looking forward to making another discovery on its sizable land package, the Company has expanded the unique exploration approach that led to the discovery of Rainbow, and hope to make additional discoveries nearby.

This post contains sponsored advertising content and is issued on behalf of Callinex Mines Inc. This content is for informational purposes only and is not intended to be investing advice.

Cautionary Note.  The PEA is preliminary in nature and it includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that the PEA will be realized.