Precious metals have been in an uptrend for year-to-date on the back of multiple factors. With the bull run likely to sustain, it’s a good time to buy precious metal penny stocks for quick returns.

Let’s first talk about the catalysts for upside in gold and silver. First, despite relatively stubborn inflation, multiple rate cuts are on the cards in the next 12 months. Easy money policies translate into a weaker dollar, which is positive for gold and silver.

Further, globally, geopolitical tensions are escalating. Investors tend to seek refuge in hard assets, translating into higher demand for gold.

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Central banks have been buying gold for reserve diversification. This factor is likely to support a sustained rally for precious metals.

Let’s, therefore, talk about three precious metal penny stocks that will benefit from higher realized prices. As cash flows swell for these companies, valuations will adjust on the upside.

IAMGOLD (IAG)

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Considering the growth outlook, IAMGOLD (NYSE:IAG) is among the most undervalued precious metal penny stocks to buy. IAG stock has rallied by 55%, with gold trending higher in the last six months. However, the stock can still double from current levels in the next 12 to 18 months.

The first positive for IAMGOLD is strong fundamentals. As of Q4 2023, the company reported a liquidity buffer of $754.1 million. Investing in an attractive exploration pipeline that includes C?té, Gosselin, Nelligan and Chibougamau districts provides flexibility.

The second major positive is the commencement of production from C?té gold asset in March. It’s considered among Canada’s largest gold mines and has a mine life through 2041. IAMGOLD expects production of 220,000 ounces to 290,000 ounces from the current year from the asset. This will translate into a significant production bump-up. With higher gold prices, IAMGOLD is positioned to deliver robust operating cash flow during the year.

Hecla Mining (HL)

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After a rally of 21% in the last month, Hecla Mining (NYSE:HL) stock trades just above $5. I believe that it’s still a good time to accumulate with the silver mining company positioned for growth and cash flow upside.

Recently, Hecla Mining announced production numbers for Q1 2024. Silver production was 4.2 million ounces, which was higher by 43% on a year-on-year basis. Further, gold production for the quarter was 36,592 ounces.

Two factors supported upside in silver production. First is the resumption of mining activity on Lucky Friday. Further, the production ramp-up continued at the Keno Hill asset.