2 shares that could make you rich

Petra Diamonds(LSE: PDL) is a leading independent diamond mining group and an increasingly important supplier of rough diamonds to the international market. Like most mining companies, its fate relies heavily in the hands of the price of the commodity it produces, in this case that means diamond prices. So what's the outlook for the diamond market?

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Signs of stabilisation

In a recent update the Africa-focused miner suggested that there were signs of stabilisation in the rough diamond market and that it expects conditions to remain stable during the first half of 2017 at least. There is also some evidence of improving retail demand, with some jewellery retailers reporting slight growth at the end of 2016, and others reporting a narrowing of declines.

While Chinese retailers in Hong Kong and Macau continue to record some declines, there are now more positive trends in mainland China, which is encouraging. The company has noted steady demand across the majority of size ranges, except in the smaller lower value categories which have experienced some pressure due to the Indian government's demonetisation of high value banknotes, with a resulting impact on liquidity in the Indian diamond market.

Add a little sparkle

During the first half of its financial year, the FTSE 250-listed miner achieved strong operational results, recording a 24% increase in production to over 2m carats, and remains on track to deliver 4.4m-4.6m carats for the full year. Increased sales volumes during the period helped to achieve a staggering 48% uplift in revenues to $228.5m compared with $154m for the previous year.

I believe the prospects look good for Petra, with earnings growth for the full year to June currently estimated at 40%, and an even better 76% improvement pencilled-in for next year. The shares trade on a very attractive valuation of 13 times earnings for the current year, dropping to just seven for FY 2018. For those wishing to add a little sparkle to their portfolios, Petra Diamonds could be the way to go.

Record production

Meanwhile, on the other side of the world Mexican silver miner Fresnillo(LSE: FRES) has been busy delivering its own precious cargo. The FTSE 100 mining giant is the world's largest primary producer of silver, although it also produces significant quantities of gold each year.

Last week the group announced its full year results for 2016, reporting a strong overall performance. Record levels of production combined with higher metals prices helped the group to post a massive 238% rise in pre-tax profits to $718m on higher revenues of $1.9bn, compared to $1.4bn for 2015.

All that glitters

I think it's almost impossible to predict the outlook for precious metals prices given the current uncertainties due to Brexit and the new administration in the US, but its probably safe to say that things will remain volatile. That being said, Fresnillo continues to focus on efficiency and competitiveness with high-potential silver and gold projects that can be developed into low cost mines able to withstand unpredictable metals prices.

To me, Fresnillo's valuation still looks attractive with the P/E ratio falling to 22 by next year, much lower than historical levels. All that glitters is not gold -- it could be silver too!

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Bilaal Mohamed 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.