Citing a bullish outlook on silver prices, Canaccord Genuity initiates coverage of two silver producers with Buy ratings: Coeur Mining (NYSE:CDE) among the $1B-plus market cap producers on its recent exploration success at Palmarejo and low cost structure at Wharf, and Fortuna Silver (NYSE:FSM) among the smaller cap names due to its execution and cost controls.
Meanwhile, the firm rates Pan American Silver (NASDAQ:PAAS), Hecla Mining (NYSE:HL) and Endeavour Silver (NYSE:EXK) at Hold.
Canaccord says investors who missed the first leg up in silver commodity prices and silver producer equities now have a second chance following the recent pullback.
The firm projects at least 5% upside in silver prices over the next 12-18 months as zinc and lead mine closures impact supply, and says increasing demand from the photovoltaics industry and inflationary pressures from higher oil prices also should boost silver prices.
Endeavour Silver (EXK +7.2%) says it produced ~1.55M oz. of silver & 15,649 oz. of gold in Q2, and raises its FY 2016 capex and production guidance.
EXK says its Q2 silver production fell 14% Y/Y, as expected, while gold production rose 17% Y/Y, saying production is well ahead of plan for the year and prompts an increase in full-year production guidance by ~13%.
EXK also raises its capex guidance to $17.4M from $11.3M, which includes an additional $7M on additional exploration, engineering and land acquisition, primarily at the Terronera mine in Mexico.