Using Geology to Unlock Potential Wealth as a Resource Investor – Fat Tail Daily
Unleash the potential of geology in commodity investing! Delve into porphyry deposits for copper and gold and stay ahead of the curve with emerging opportunities in silver and zinc markets.
Today, I want to dive into the weeds and give you an example of how GEOLOGY can give you an edge in commodity investing.
I’ve done that for my paid readership group, focusing on a type of deposit known as porphyries.
This is the world’s most crucial storehouse for copper, where porphyry deposits like Escondida (in Chile) can provide several decades of production.
But in addition to their enormous size, there’s another reason I’ve tapped into stocks with these deposits:
Porphyries are also endowed with gold and sometimes silver.
In my mind, that gives investors the perfect suite of commodities in this market.
Where one deposit can give you a nice diversification of metals!
Given that gold continues to hit all-time new highs while copper is just a whisker from its historic breakout, porphyries have been a great way to play the resource market.
Two metals with very different demand drivers, but both performing exceptionally well.
It’s why focussing on porphyry deposits has been a winning formula for my paid readership group.
In 2023, I recommended Filo Mining, a company that Lundin Mining and BHP recently acquired.
Filo was a successful porphyry hunter, adding around 3.2 billion pounds of copper plus 4.6 million ounces of gold to its coffers.
As I pointed out to my readers, Filo offered leveraged exposure to two commodities I believed were positioned to do well in the months ahead.
Leveraged in the sense that it could benefit from its two primary metals BOTH going up!
But Filo wasn’t our only ‘porphyry winner’.
A couple of years back, I also recommended NGEx Minerals [TSX-V:NGEX].
This is another porphyry chaser that has steadily added to its copper-gold treasure trove.
As of writing, we’re sitting on a 156% gain from our original recommendation in 2023.
And here’s another example…
Aldebaran Resources [TSX-V:ALDE], an Argentinian-based porphyry holder.
We closed half of that position for a 130% gain in just three months late last year.
I’m not showing you this to boast about our portfolio wins but to demonstrate how geological knowledge can be turned into profitable trade ideas.
Of course, I can’t always get it right, mining stocks are some of the riskiest on the market, but…
…as a former geologist, that’s the unique advantage I try to deliver for my paid readers.
What’s next on my Geo-Investor Radar?
Porphyry hunters are still a key part of our strategy.
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The fourth big ‘shift’ in mining
There have been three major changes to the way the resource sector works in the last century.
Each one birthed some of Australia’s biggest mining companies — like BHP, Rio Tinto and Fortescue…and handed some significant gains to investors.
We’re now witnessing a fourth major shift in this sector…
However, these strong performers have mostly moved from a BUY to a HOLD in our portfolio.
But as the cycle turns, new opportunities are set to emerge.
That’s why my focus is shifting to a new type of deposit — one perfectly aligned with the next phase in the commodity cycle.
It’s what geologists call Volcanic Massive Sulphide deposits, or VMS for short — a major source of zinc and silver.
Why’s that important?
Well, consider this…
Gold has ripped 40% over the last 12 months.
Yet, silver, traditionally considered the more speculative play in the precious metals market, continues to lag.
If conditions continue to tick up in this cycle, as I expect, then there’s every chance silver will begin to outperform gold.
And we could say the same for the other metal often found in VMS deposits…Zinc.
Like gold, copper has been tearing higher in 2025, up almost 30% year-to-date.
That’s been great news for our copper-gold plays.
And like gold, copper is a ‘leader’ in the commodity market, rising ahead of other industrial metals like tin, aluminium, and zinc.
So, what’s the strategy?
I could break down simply like this…
Porphyries hold copper and gold, which tend to lead in a commodity bull market.
Stocks holding these are a great way to play the start of the upward leg of a commodity cycle.
Meanwhile, VMS deposits hold zinc and silver, which I consider ‘second-tier’ commodities — metals that follow gold and copper.
That means, if you missed out on the initial move, now’s the time to consider positioning for the next phase of the commodity cycle.
And there’s perhaps no better way to play that than tapping into a company with a zinc and silver deposit!
That gives you leveraged exposure to a stock with two commodities set to rise—two for the price of one!
That will become a key focus for my paid readership group over the coming months.
If you’d like to learn more about how we use geology to generate actionable investment ideas, you can join me at Diggers & Drillers here.
Regards,
 |
James Cooper,
Editor, Mining: Phase One and Diggers and Drillers
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All advice is general advice and has not taken into account your personal circumstances.
Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.
