Compiling a list of silver companies is controversial as there are only very few pure silver plays. The white metal is mostly mined in combination with gold or base metals, which can dramatically change the bottom line of silver miners. In some cases the mining of base metals and gold can lead to negative cash costs for every ounce of silver produced.
Silver is primarily used in jewelery and in industrial applications, as it is the best metallic electric conductor.
Expecting silver prices to multiply in the next 5 years these companies give extra leverage - if their plans come true.
All silver stocks got hammered in 2008 in the biggest crash the mining sector has seen in the last 80 years and most have not yet recovered to 2007 levels, despite the recent recovery in silver prices. Do your own research as some companies are trading at less than the cash they have in the till.
While the IPO train on Wall Street has become a train wreck due to the hesitancy of investment banks when underwriting new issues, junior miners are not dependent on investment banks to raise capital. They (better) know how to attract investors with a long term horizon directly, as I was able to witness myself when living in Vancouver in 2007.
Vancouver's stock exchange is the primary market for junior miners for all kinds of resources. The market had a shady reputation in the 1980s but has cleared up its act by establishing mandatory reporting rules for junior miners. Its most important improvement was the introduction of standards for reporting new metals reserves.
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GRAPH: Silver is a lot more volatile than gold while physical demand is unprecedented. The Austrian Mint produces silver Philharmonics 24/7 since introducing this bullion coin in 2008. The US Mint spits them at record rates too since 2009. Silver currently trades at a ratio of 1:60 to gold. In the long term this ratio has been closer to 1:15, leaving enormous upside potential for silver that could easily lead to a price around $40 next year. Chart courtesy of stockcharts.com.
I consider investments in exploration companies to be very risky and build up positions very slowly. But they come with a notable exception to the golden rule that for every percentage point of possible reward there is an equal risk.
In the case of explorers / developers there is a nice and profitable exception to the rule: As long as one invests without leverage there is a risk of 100% but a multiple of that in possible gains when an explorer hits silver indeed. When researching risky investments like this very small sector with only a few billions in market capitalization, I look mainly for the following:
- Quality of management. Check the track record of management in past mining ventures.
- Management's stake in the company. If they don't sell or even buy more it is usually a good sign.
- Delays. Are there any delays in realizing the company's ventures ?
- Cost per ounce. What are the company's cash costs per ounce produced? How much do I pay per ounce when I buy their shares?
- Institutional shareholders. Which funds own the company, which analysts cover the stock?
- Proximity to production. Potential gains are higher with explorers in the early stages, but so are the risks. I like companies in the process of finalizing the feasibility study for financing or - at a later stage - companies that are close to production.
- Political risk. Your due diligence has to include the respective stability of the country where your miner digs the money out of the ground.
With respect to the political risk, I also shun US based silver miners as there exists a possibility that the government can nationalize virtually any company under the Trading With the Enemy Act. This became law in 1917 during World War I and applies during declared wars, and from 1977's International Emergency Economic Powers Act, which can be applied without declared wars. Read more on this issue on GATA's website.
Marc Courtenay has penned a story at SeekingAlpha that deals with the possibility of another confiscation of gold and silver and mining shares by the US government. Seeing all the current nationalizations of car makers, banks and the health sector in the USA, I don't rule out anything anymore.
List of Silver Explorers, Developers and Miners
Here comes the list of more than 100 silver companies (click the name for the company's website and the ticker symbol for price information):
Abington Resources (ABL.V): Gold, Silver in Canada
Abcourt Mines (ABI.V): Gold, silver and zinc in Quebec
Alexco Resource (AXR.TO): Silver in Canada
Apogee Minerals (APE.V): Silver, lead, zinc in Bolivia
Arian Silver (AGQ.V): Silver in Mexico
Aura Silver (AUU.V): Silver in Canada, El Salvador, Mexico, USA
Aurcana (AUN.V): Silver, gold, lead, zinc in Mexico
Aurex BioMining AG (not listed): Silver in Austria
Avino Silver & Gold Mines (ASM.V): Silver, gold, zinc, copper, lead in British Columbia
Bear Creek Mining (BCM.V): Silver, gold in Peru
Canadian Zinc (CZN.TO): Silver, zinc, and lead in Canada
Canarc Resources (CCM.TO): Silver in South America
Canasil Resources (CLZ.V): Silver, gold, copper, lead, zinc in British Columbia and Mexico
Capstone Mining (CS.TO): Silver in Mexico
Chariot Resources (CHD.TO): Silver and copper in Peru
Chesapeake Gold (CKG.V): Silver, gold, zinc in Mexico and the USA
CMC Metals (CMB.V): Silver in Canada
Coeur d'Alene (NYSE:CDE): Silver and gold in Argentina, Bolivia, Chile, Mexico, USA
Compania de Minas Buenaventura (NYSE:BVN): Precious metals in Peru
Cornerstone Resources (CGP.V): Gold, silver, copper, nickel, VMS, potash, and uranium properties in Canada and Ecuador
Cream Mineral Resources (CMA.V): Silver, gold, base metals in Canada, Mexico and Sierra Leone
Dia Bras Exploration (DIB.V: Silver, copper, zinc in Mexico
Eagle Plains Resources (EPL.V): 35 gold, silver, uranium, copper, molybdenum, zinc and rare earth mineral projects in Canada
Eastfield Resources (ETF.V): Gold, copper, silver, nickel, molybdenum and Platinum Group Metals in Canada and USA
Endeavour Silver (EDR.TO): Silver in Mexico
Esperanza Silver (EPZ.V): Silver in Mexico, Peru
Excellon Resources (EXN.TO): Silver in Mexico
First Majestic (FR.TO): Silver in Mexico
First Point Minerals (FPX.V): Silver, gold, base metals in Mexico and the Americas
Fortuna Silver Mines (FVI.V): Silver in Mexico
Genco Resources (GGC.TO): Silver in Mexico
Gitennes Exploration (GIT.TO): Silver, gold copper in Peru
Gold Hawk Resources (CGK.V): Gold, silver, lead, zinc and copper in Peru
Golden Goliath Resources (GNG.V): Silver, gold in Mexico
Great Panther Resources (GPR.TO): Silver in Mexico
Hecla Mining (NYSE:HL): Silver, gold in Mexico and USA
Hellix Ventures (HEL.V): Silver, gold in Mexico
Herencia Resources (HER.L): Silver, lead, zinc in Chile
Hochschild Mining (HOC.L): Silver in Argentina, Chile, Mexico, Peru
Huldra Silver (HDA.V): Silver in Canada
Impact Silver (IPT.V): Silver in Mexico, Dominican Republic
International Minerals (IMZ.TO): Silver, gold in Ecuador and Peru
Intrepid Mines (IAU.TO): Silver, gold in Australia and Indonesia
Journey Resources (JNY.V): Silver, gold, lead, zinc in Mexico, Peru, USA
Kenrich-Eskay (KRE.V): Silver, gold in Canada
Kimber Resources (KBR.TO): Silver, gold in Mexico
Kings Minerals (KMN.AX): Silver, gold, copper, rhenium, molybdenum in Australia and Mexico
Klondike Silver (KS.V): Silver in Canada, Mexico
LKA International (LKAI.OB): Silver, gold in USA
Logan Resources (LGR.V): Precious metals, base metals and uranium in Canada
MacMillian Gold (MMG.V): Silver, gold in Mexico
MacMin Silver (MMN.AX): Silver in Australia
MAG Silver (MAG.TO): Silver in Mexico
Marifil (MFM.V): Silver, gold, base metals in Argentina
Mexican Silver Mines (MSM.V): Silver in Mexico
Milner Consolidated Silver Mines (MCA.V): Silver in Canada
Minefinders (MFL.TO): Silver, gold in USA
Minera Andes (MAI.TO): Silver in Argentina
Mines Management (MGT.TO): Silver, copper in the USA
Minco Silver (MSV.TO): Silver in China
Mindoro Resources (MIO.V): Silver, base metals in the Philippines
Mountain Boy Minerals (MTB.V): Silver, gold, base metals in Canada
Normabec Mining (NMB.V): Silver, gold in Canada and Mexico
Orko Silver (OK.V): Silver in Mexico
Oremex Resources (ORM.V): Silver in Mexico
Oro Silver (OSR.V): Silver in Mexico
Pacific Comox Resources (PCM.V): Silver, gold, molybdenum, base metals in Canada
Pan American Silver (PAA.TO): Silver in Bolivia, Mexico, Peru
Pershimco Resources (PRO.V): Silver, gold in Mexico
Piedmont Mining (PIED.OB): Silver, gold in USA
Portal Resources (PDO.V): Silver, gold in Mexico, USA, gas and oil in Mexico
Quaterra Resources (QTA.V): Silver in Mexico
Redcorp Ventures (RDV.TO): Silver, gold, copper, lead, zinc in Canada
Revett Minerals (RVM.TO): Silver, gold, copper in USA
Sabina Silver (SBB.V): Silver in Canada
Silvercorp (SVM.TO): Silver in China
SilverCrest Mines (SVL.V): Silver in Chile, El Salvador, Mexico
Silver Dragon Resources (SDRG.OB): Silver in China
Silver Fields Resources (SF.V): Silver in Canada, Mexico, USA
Silver Grail Resources (SVG.V): Silver in Canada
Silvermet (SYI.V): Silver in Canada, Turkey
Silvermex Resources (SMR.V): Silver in Mexico
Silver Quest Resources (SQI.V): Silver in North America
Silver Standard (NASDAQ:SSRI): Silver in Argentina, Australia, Mexico, Chile, Peru, Canada, USA
Silver Wheaton (SLW): Silver in Greece, Mexico, Peru, Sweden
SNS Silver (SNS.V): Silver in the USA
South American Silver (SAC.TO): Silver in Bolivia, Chile
Southern Silver (SSV.V): Silver in Mexico, USA
St. Eugene Mining (SEM.V): Silver, lead, zinc in Canada
Starcore (SAM.TO): Silver, gold in Mexico
Stealth Minerals (SML.V): Silver, gold, copper in Canada
Sterling Mining (SRLMQ.PK): Silver in USA
Stroud Resources (SDR.V): Silver, gold, natural gas in Mexico
Teryl Resources (TRC.V): Silver, gold, copper in Alaska
Tumi Resources (TM.V): Silver in Mexico, Sweden
UC Resources (UC.V): Silver, gold in Mexico
US Silver (USA.V): Silver in the USA
Valencia Ventures (VVI.V): Silver in Australia, Canada, Chile, USA
Yale Resources (YLL.V): Silver in Mexico
Some Recent Silver Statistics
TABLE: Industrial applications for the most cost-effective electric conductor will lend support to silver prices.
TABLE: China is not only the world's largest gold producer, but has also climbed to #3 in silver production.
TABLE: Supply from above ground stocks declines rapidly.
Disclosure: No positions