Pan American Silver Corp was founded it 1994 and it still follows its aim that it set then, to be the best investment vehicle for investors looking for exposure to silver prices.
Well, so far PAAS has been doing a great job of trackingand even outperforming silver prices, as the chart shows below.
Silver stocks, such as those that we document, should outperform the silver prices. If a silver stock is not doing better than the silver metal, then there is no point in owning the stock. You would be better off buying bullion or ETF’s as they track the silver price exactly, without the many risks of mining.
However it is good to see that PAAS is doing a lot better than the silver metal and the stock price should move a lot higher once silver prices get going, which we believe is eminent.
Pan American Silver has stated that it aims to produce 25 million ounces of silver every year by 2009 and it is well on the way with mines in Mexico, Bolivia, and two mines in Peru as well as projects in Mexico, Argentina and the USA.
The project in Bolivia is obviously a cause for concern, with the geopolitical risks of the country and threat of possibly extremely high taxation or even nationalization. But as Pan American Silver has many other projects in many other countries, this is not too much of a problem to the stock at the moment although it could be in the future.
For the moment though, Pan American Silver is doing quite well for our portfolio, especially for one of the larger silver mining companies, and it should continue to do so it the future.
Disclosure: We may or may not hold a position in these securities at any given time and reserve the right to buy and sell as we think fit.