Gleneagle Securities’ favoured stocks to benefit in ‘Great Virus Crisis’ recovery

Historically high unemployment rates created by the “great virus crisis” of 2020 are tipped to be a boom for the mining industry, according to Gleneagle Securities’ Greg Tolpigin.

Historically high unemployment rates created by the “great virus crisis” of 2020 are tipped to be a boom for the mining industry, according to Gleneagle Securities’ Greg Tolpigin.

Speaking on Reach Markets’ fortnightly The Insider webcast, Mr Tolpigin noted global governments traditionally turn to infrastructure projects to kickstart faltering economics and curb high joblessness.

This latest economic crisis will likely follow that trend, he said, but added this time around infrastructure differ in scale.

“The significance and the amount to which the infrastructure spend will occur is, I think, far beyond what most people currently expect,” he said.

“They’re not going to stop until that unemployment rate goes down.

Mr Tolpigin added that a great deal of the impending influx of infrastructure investment will target renewable energy projects, which will take many years to construct, bringing with it a huge need for relevant commodities.

“I don’t think this is the demand curve moving up, I think this is going to be virtually almost a permanent shift in the demand curve,” he said.

A study conducted by the European Union into its own demand for metals like lithium, cobalt and tin (all used in renewable energy and electric car technology) revealed demand will lift by multiples in the coming years, Mr Tolpigin said.

Mr Tolpigin named three ASX-listed mining companies he favours within these market conditions.

Metals X

The $220 million miner Metals X (ASX: MLX) is the only pure-play tin producer in Australia, Mr Tolpigin said, after selling its Nifty Copper mine in Western Australia to Cyprium Metals 

“They have now successfully got rid of those copper operations so it’s a pure tin play,” Mr Tolpigin said.

“That’s one I think is a great exposure towards tin.

Lynas Corporation

The West Australia-based Lynas Corporation is the second largest producer of separated rare earth elements in the world, with a market capitalization of approximately $5 billion.

“They’re the only producer [of scale] of rare earths outside of China,” Mr Tolpigin said.

Wesfarmers also sought to buy the company a couple of years ago after selling their holding in Coles, Mr Tolpigin added.

“Clearly they saw something very significant, and as we know, Wesfarmers doesn’t just invest for 6 months or 12 months or a couple of years, and for them to go outside of their core area of expertise – primarily being coal or retail – I thought was very significant.”  

Sandfire Resources

Sandfire Resources operates the DeGrussa Copper-Gold mine, 900km away from Perth.

The business has a market capitalization of roughly $1.1 billion and reported a net profit after tax attributable to members of $60 million in its December 2020 half-year report, released February 25.

“I thought it was a stellar result,” Mr Tolpigin said.

“If you believe, like I do, that this is a significant copper commodity cycle that we’re entering, then there’s significant upside to something like Sandfire.” 


This article is a summary of the information Mr Tolpigin shared with us during our fortnightly ‘The Insider: Meet the Fund Manager’ session. You can watch a recording of the session below, or you can click here to book into our next installment of the series where we will be joined by Dean Fergie, Director & Portfolio Manager of Cyan Investment Management.


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