For mining and exploration companies, 2013 has been somewhat of a brutal year. Metal miners in particular have been hit significantly this year as falling metal prices, weaker demand, and rising operational costs continue to plague the industry. Popular exchange-traded funds, like Van Eck’s Market Vectors Junior Gold Miners ETF (GDXJ), and other industry giants, such as Barrick Gold (ABX), have suffered significant losses these year; both of these securities have shed more than 45% year-to-date [for more commodity news and analysis subscribe to our free newsletter].
But outside of the metal space, there have been some bright spots in the mining world, particularly in the raw materials that not many investors pay attention to, such as diamonds and industrial minerals. Below, we highlight three mining stocks that have managed to dish out attractive returns so far in 2013:
Hi-Crush Partners Lp (HCLP), Up 51%
This Houston-based company is a major producer of monocrystaline sand, a mineral that is used to enhance the recovery rates of hydrocarbons from oil and natural gas wells. The company also offers raw frac sand, which is used in hydraulic fracturing operations – a rapidly growing industry. HCLP has a market capitalization of just over $684 million and an average trading volume of roughly 135,600 shares; the stock also features a rather attractive dividend yield of 8.04%. Year-to-date, the stock has surged more than 51% [see The Arctic Ocean: Fracking's Future Home].
U.S. Silica Holdings, Inc (SLCA), Up 43%
Together with its subsidiaries, this holdings company engages in the mining and processing of commercial silica – yet another mineral that can be used as fracturing sand in oil and natural gas wells. As of February 26, 2013, SLCA had approximately 307 million tons of proven and probable recoverable mineral reserves. The stock currently boasts a 2.10% dividend yield and earnings of $1.47 per share. In a recent report, the company stated that it expects to double EBITDA earnings by 2016, a rather compelling trajectory for investors wanting to make a play on the company.
Mountain Province Diamonds Inc. (MDM), Up 29%
Headquartered in Toronto, this company is involved in the discovery and development of diamond properties. Currently, the company holds a 49% interest in the Gacho Kue project, which consists of a cluster of four diamondiferous kimberlites and has probable mineral reserves of a total diamond content of 49 million carats. Thought the small-cap stock is very thinly traded, its performance in 2013 certainly warrants a closer look from investors. Year-to-date, the stock is up roughly 29% [see a Deeper Look At the World of Diamonds].
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Disclosure: No positions at time of writing.
