These are dreadful times for miners focusing on industrial metals such as copper and iron ore, as Chinese demand slows — but miners of rare or precious metals dance to a different tune. Here, the good news is just as likely to outweigh the bad.

Good As Gold?

AIM-listed Xtract Resources (LSE: XTR) has seen its share price soar by 175% in the last year but don’t get too excited, that is from 0.08p to today’s 0.22p. Still, investors have made money from this penny stock and it could be a tempting prospect.

Xtract is a gold and copper exploration and development company that boasts two main prospects, the Chepica gold and copper mine in Chile and the O’Kiep and Carolusberg copper sulphide dump projects in South Africa. It has suffered setbacks at its Chipeca Gold Mine in Chile where the authorities suspended operations following two fatal accidents, although it hopes to be granted permission to restart next week. Last year it suffered mixed results in South Africa, where feasibility studies continue.

Xtract is pursuing a range of other prospects, including a joint-venture in Mozambique, which should give it some much-needed diversification. Forecasts suggest it will make profits of £2.5m this year, on revenues of £9.8m, which I certainly find tempting. Today you can buy it at nine times earnings. This stock could merit a bit more digging…

Petra Diamonds Forever

Diamond miner Petra Diamonds (LSE: PDL) has had a tougher year, its share price falling 54%, which is the kind of number you expect from miners these days. Its latest trading update showed the company beating production targets in the last six months of 2015, but unfortunately revenue fell 28% to US$154m and diamond sales fell 7% to 1,303,051 carats.

Chief executive Johan Dippenaar flagged up its expansion programmes, which remain on track to deliver the first significant input of undiluted ore in second half of this year, which should boost grades and product mix, while, its new plant at Cullinan is on track. City forecasts suggest a drop in profits from £85m to £57m in the year to 30 June and a forecast 14% drop in earnings per share, which takes some of the shine. Petra is reasonably prices at 10.8 times earnings and yielding 2.7% but it is hardly a diamond prospect right now.

Back Down To Earth

It has been a disappointing year for investors in Rare Earth Minerals (LSE: REM), whose share price is down 20% over the last year to 0.71p. The stock did get a boost last year following its deal to supply Tesla Motors with lithium hydroxide, albeit with stiff two-year performance milestones. Results from the Cinovec Lithium-Tin-Tungsten project, in which REM has a 12% equity interest, and the Sonora Lithium Project by Bacanora Minerals, 17.19% owned by REM, have been encouraging.

It is always an act of faith investing in fledgling miners, until the revenues start rolling in, even ones mining highly-valued metals as lithium. Demand from battery producers is expected to surge as renewable energy storage becomes a global issue, but investors will need strong nerves and bags of patience.

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Harvey Jones has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.