An unrelenting stream of scary inflation data suggests that buying Greatland Gold (LSE: GGP) shares could be a good idea. In times like these, worries over the value of paper currencies balloon and investors seek shelter with safe-haven precious metals. This is one of several gold-producing AIM stocks for investors to buy today.
Central banks are hiking rates to control these rapid price rises. But data shows that policymakers are still swimming against the tide. In Spain, for instance, consumer price inflation has just hit its highest since 1985, at 10.2%. This was up considerably from 8.7% in May.
Buying a gold stock instead of physical metal, or a financial instrument that backs gold prices, carries an extra element of investor risk. Problems at the exploration, development and production phases can be common and can take a big bite out of earnings.
The benefits of gold stocks
However, owning a gold mining stock can provide better returns that just by buying gold. Many also pay a dividend. Others like Greatland Gold are sitting on exceptional assets that could make gigantic profits in the years ahead.
This particular AIM stock began developing the world-class Havieron mine in Western Australia in 2018 with Newmont Mining. At the start of the year, drilling work here revealed resources of a whopping 6.5m ounces of gold equivalent ounces. This was up 2.1m ounces from the company’s previous update.
An extensive drilling programme is ongoing that could provide further exciting news too.
A big nickel player
Horizonte Minerals (LSE: HZM) is another AIM mining stock I’m considering loading up on today. This company is focused on producing nickel and cobalt from two projects in Brazil. Industrial metals like this also rise in value during inflationary environments, albeit traditionally at a lower pace than gold.
Nickel could also be a particularly strong performing commodity in the short-to-medium term as supply fears worsen. The base metal soared this week after the UK announced it was slapping sanctions on mining magnate Vladimir Potanin. The Russian is a major stakeholder in major nickel and palladium producer Norilsk Nickel.
Riding the EV explosion
Horizonte isn’t just an attractive share to buy for the short haul though. I think the business could generate exceptional profits growth over the next decade as electric vehicle (EV) sales take off. Cobalt and nickel are both essential materials in low-carbon cars and trucks.
There’s no guarantee that nickel prices will be strong when Horizonte starts producing. A supply glut, for example, could dampen the price the business will get for its metal. But at the moment it seems like a signficant material shortage is in the pipeline.
I also like Horizonte because of the quality of its South American assets. The business hopes to produce 25,000 tonnes of nickel and 1,250 tonnes of cobalt a year from its Vermelho asset over a 38-year period. It owns 100% of the asset along with all of the neighbouring Araguaia ferronickel project.