A $7,000 TFSA Investment Strategy That Focuses on Quality

Written by Aditya Raghunath at The Motley Fool Canada

The Tax-Free Savings Account (TFSA) is a popular registered account in Canada. The TFSA was introduced in 2009 and enables Canadians to generate tax-free gains by holding a variety of qualified investments.

In this article, I have identified two quality TSX stocks you can hold in a TFSA that should help you deliver outsized gains over time.

Ivanhoe Mines (TSX:IVN) is a Canadian mining company focused on developing and operating mineral projects across Africa. It mines copper, platinum group metals, zinc, and other precious metals through its flagship Kamoa-Kakula Copper Complex in the Democratic Republic of Congo, the Platreef project in South Africa, and the Kipushi Zinc mine operations.

Ivanhoe Mines reported exceptional first-quarter results, achieving record revenue of $973 million and EBITDA (earnings before interest, tax, depreciation, and amortization) of $585 million at its flagship Kamoa-Kakula copper complex in the Democratic Republic of Congo.

Ivanhoe has cemented its position among the world’s top three copper producers, with April production reaching a milestone of 50,246 tonnes of copper.

The operational turnaround has been dramatic, with the complex doubling its imported hydropower capacity from 50 to 100 megawatts in the first quarter (Q1), effectively eliminating reliance on expensive diesel generators. This power stability enabled annualized production rates exceeding 600,000 tonnes, positioning Kamoa-Kakula for sustained growth.

Ivanhoe’s growth trajectory appears robust with multiple catalysts. The $1.1 billion copper smelter, Africa’s largest, is scheduled to begin operations in May, which is expected to reduce logistics costs and improve margins. Project 95, currently 30% complete, is expected to add 30,000 tonnes of annual copper production starting in 2026, with minimal additional mining costs.

Ivanhoe also announced ambitious expansion plans targeting over 700,000 tonnes of annual copper production through phase-four development. Meanwhile, Kipushi zinc mine is approaching steady-state operations, and the Platreef precious metals project in South Africa reached the reef zone, marking a significant milestone toward commercial production.

Analysts tracking the TSX mining stock expect adjusted earnings per share to expand from $0.32 in 2024 to $0.83 in 2028. If the mining stock is priced at 20 times forward earnings, which is reasonable, given its growth estimates, it will trade around $16.6 in early 2028, indicating an upside potential of over 50% from current levels.