3 ways to play the mining boom that is just getting started

The mining industry has been through a full boom and bust cycle (and then some) since Hedley Widdup, Managing Director of Lion Selection Group (ASX: LSX) first shared the ‘Lion Clock’ on Livewire. Fortunes have been made, lost, and made again.

So with resources at an apparent inflection point following the big run through 2025, and the selloff in recent months, an in-depth chat with Hedley about the state of the mining cycle seemed well overdue.

In this episode of The Rules of Investing, he tells us why the resources cycle may still be in its early stages, shares the outlook for gold and copper, and discusses several Australian micro-cap resources stocks he thinks are at an interesting stage of development. 

Watch or listen to the full episode via the players above, or read a summary of some of the key points below.

Why gold still matters

While Widdup admits he is feeling “a little bit buggish” on gold, he says Lion’s preference for the sector is not driven purely by gold price enthusiasm.

The attraction is partly practical. Gold is relatively easy to process, highly liquid, and usually easier to sell at something close to the prevailing market price than many other commodities.

“Gold’s risk characteristics from a project investing point of view are typically pretty low compared to most other commodities."

That matters when investing in small resources companies, where liquidity is limited and exits can be difficult. If a fund owns 5-10% of a micro-cap company, changing its mind can be painful.

The mining clock says 7:00

One of Widdup’s most enduring frameworks is the Lion Clock, which is used to describe the resources cycle.

In that framework, 12:00 represents the peak before the bust, while 6:00 marks the bottom. Widdup believes the bottom came around April 2025, when many commodity and mining equity prices troughed.

“If 6:00 is when it starts, we’ve most recently called the time as being 7:00. So, quite early.”

That does not mean the cycle will move in a straight line. Widdup says the move from 6:00 to 7:00 may have happened quickly, helped by gold, but the next stage could be slower, especially with geopolitical risk, tech market volatility and AI capex concerns affecting investor appetite for risk.

Even so, he argues the backdrop remains favourable.

“We’re still seeing miners trade on unchallenging premia to their earnings,” he says, adding that many producers are enjoying strong margins despite recent commodity price weakness.

How to invest at this stage of the cycle

If the resources cycle is at 7:00, Widdup argues it is still firmly in the investment phase.

In an ideal world, investors would deploy all their capital before the turn and then “sit back and harvest it”. In practice, he says, turning points are almost impossible to pick with precision.

“You just have to go, we feel like we’re approaching one, let’s begin investing,” he says.

For Widdup, the key is not trying to catch the exact low, but recognising when the cycle has shifted from falling to rising. He says the investing phase can run from around 3:00 on the Lion Clock, when the worst of the falls are over, through to around 9:00, when there may still be a long runway ahead.

“We’re very much in deployment phase and looking aggressively at opportunities,” he says.

That does not mean buying anything with a drill rig and a dream. Widdup still emphasises the importance of commodity selection, project quality, liquidity, and the ability to actually produce and sell into the market.

The setup for copper

If gold has led the early phase of the cycle, Widdup says copper is one of the key commodities to watch from here. He describes it as one of the world’s largest and most liquid commodity markets, with excellent price discovery and a supply outlook that remains tight.

He also notes that copper has recently pushed above long-term trading resistance, which may indicate a shift in how much customers are willing or able to pay.

“I think that’s fascinating. For that reason, copper being at such a high level, but having an outlook like that, is a great place to invest as a thematic.”

The challenge, as always in resources, is finding the right equity exposure. Liking a commodity is one thing. Finding a company with the right asset, management team, balance sheet and pathway to production is quite another. Naturally, mining has found a way to make even being right complicated.

Two stocks on Hedley’s radar

Widdup also discussed several Lion holdings he believes are approaching interesting points in their development. 

One is Medallion Metals (ASX: MM8), which has attracted Lion’s interest after acquiring and repurposing an existing nickel processing facility for gold production. Widdup says this significantly reduced the risks associated with permitting and building a greenfield plant.

“They’ve taken care of most of the risk points,” he says.

Another is Sunshine Metals (ASX: SHN), which offers a similar de-risking story after acquiring the Mount Moss project in North Queensland, including a permitted site, processing infrastructure, tailings facility and camp.

Widdup says the acquisition gives Sunshine a potential pathway into gold production, while retaining exploration upside.

“They’re not all that far from being a gold producer,” he says.

To hear the full discussion, including Hedley’s five-year “markets closed” pick, watch or listen to the full episode above.

Disclosure: The host and author of this podcast and article owns shares in Lion Selection Group.