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Silver One Resources: Things To Consider Before Jumping On The Bandwagon

Mar. 09, 2021 10:16 AM ETSilver One Resources Inc. (SLVRF), SVE:CA1 Comment
Aitezaz Khan profile picture
Aitezaz Khan


  • SLVRF has a strong correlation with silver prices, and has significantly outperformed two benchmark silver ETFs during the recently-concluded silver rally.
  • Despite having a promising 'long' outlook, silver's near-term price outlook is troubled on account of multiple macro headwinds, and I expect this situation to haunt SLVRF's near-term price trajectory.
  • Nonetheless, SLVRF manages a portfolio of very promising exploration projects that are scalable, located in Tier-1 mining jurisdictions, and manageable from a liquidity perspective.
  • The two major risk factors are the prevailing uncertainty in precious metals' prices, and the 'long' timelines associated with project development.
  • That said, I believe an appropriate investment strategy at present is to assign only a small portion of your portfolio to this junior explorer, keeping in view the two main risk factors highlighted above.


Silver One Resources (OTCQX:SLVRF) is a Canadian junior silver explorer having operational presence solely in the US. For me, the direction of an exploration company's price trajectory is largely determined by two factors; (1) the overall momentum in prices of the underlying metal (silver in this case), and (2) the company's fundamental profile (including the progress and status of drilling/exploration activities, the company's mining jurisdiction and associated risk, as well as the mining attraction of the company's flagship project).

This article will incorporate a detailed discussion of these two factors to help assess the stock's growth outlook in the medium-to-long term. So let's get into the details without further ado.

Figure-1 (Source: Silver One's website-Candelaria project)

Catalyst-1: Silver prices

At the time of writing, spot silver last traded at $25.30, witnessing an approximately 16% decline from the ~$30/oz level recorded about one month ago (Figure-2). It's debated that silver's near-term price performance is impacted by strong US bond yields, a strengthening US Dollar in the wake of upbeat jobs data (and as denoted by the recent hike in the USD Index; check Figure-3). Given silver's recent price performance, we could possibly witness the PM (read: Precious Metal) moving closer to the YTD (read: Year-to-Date) support levels of ~$24/oz.

Figure-2 (Source: Finviz)

Figure-3 (Source: MarketWatch)

On a separate note, it's worth mentioning that SLVRF's TTM (read: Trailing Twelve Months) price returns have massively outperformed the returns of two benchmark ETFs namely Global X Silver Miners ETF (SIL), and ETFMG Prime Junior Silver Miners ETF (SILJ). Figure-4 reveals that SLVRF's price has staged strong upside during a bullish silver price environment, and has shown a greater correction on every weakness in silver prices (compared with the benchmark indices).

I expect this near-term volatility in SLVRF's prices to continue because I believe

This article was written by

Aitezaz Khan profile picture
Associated with the securities and exchange business for nearly a decade and educated in finance, auditing, law, HR, and marketing, my main focus is on growth investing (though I do sometimes identify value picks in the metals and mining sector). The focus of my coverage is on the precious metals/ base metals/ energy/ commodities/ and automobile industry.In my experience, the SA audience is an inevitable part of the value chain on this forum. Thus, I encourage my readers to share constructive feedback, as it almost always helps support a never-ending learning process.Ranked within the top 10% of financial bloggers rated on TipRanks.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (1)

This is the time to own this equity; price is right, market is down, and potential is evident.
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