The Global X Silver Miners ETF (SIL) has provided a total return of 37.5% over the past year. In conjunction, the Russel 1000 index rose 37.2%. So, in very simple terms, Silver performed slightly better than the top 1000 US companies on the stock market. We chose 3 Silver Stocks that may be of interest as the world returns to a new level of normal. Recent events globally have seen rising commodity prices across the board. While other countries are dipping into existing mineral reserves, mining companies are betting big on economic recovery.
Money printing practices to pay for CV19 Relief and other programs have run rampant, and the pain is going to be felt by the public whenever they pay for anything. As investors, there are many ways to ‘hedge against inflation’ and one of them is in precious metals. The closures resulting from the global pandemic affected mining stocks strongly, with many operations that were due to start being delayed, and others being entirely shut down. This leads to companies having to adopt new policies and business practices.
Now, that business is opening up, we’re finally seeing a dip in the prices of things like lumber. Also, in addition, our topic of the day is having a favorable upswing: Silver.
Silver is something that any investor should watch because it’s often ignored, despite having solid long-term growth. More often than not, silver is a byproduct of mining other precious metals like gold. Still, it’s a valuable commodity that has very important industrial uses. We picked 3 interesting companies with a low market cap but that we think have solid fundamentals. Let’s get into it.
Enduro Metals Corp (TSXV: ENDR) (OTC:ENDMF) (FSE:SOG)
Enduro Metals Corporation (TSXV:ENDR) (OTC:ENDMF) (FSE:SOG) is a British Columbia-based junior miner focusing on BC’s Golden Triangle. The area is known to host multiple world-class mines and is host to substantial mineral deposits. The company has claim to a 638km2 Newmont Lake Property with at least four mineralized systems with surface-level district-scale potential. In May 27, 2021 the company released drill results sampling 1,277 g/t of silver and 4.51% copper on surface at their Cuba trend – which is a part of Enduro’s Havana vein system.
Enduro (TSXV:ENDR) (OTC:ENDMF) (FSE:SOG) CEO Cole Evans commented:
“The Havana area is the strongest silver anomaly across the Newmont Lake project by a considerable margin and we have now identified what could be the source for that anomaly. By applying a systematic, data-driven approach to exploration, we have developed a strong case for a large-scale, relatively easy access silver and copper system over a multi-kilometre area. With this new knowledge in hand, we are now investigating the possible links between Chachi and Havana, as well as viewing plans to increase the scope of the 2021 exploration drilling program by 2.5 – 3x larger compared to 2020. More details on this will be available shortly.” -Cole Evans, CEO, Enduro Metals Corp
Bunker Hill Mining Corp. (CSE:BNKR)
Bunker Hill mining corp is a US-based silver focused firm settled at the historical Bunker Hill mine cluster. Some of the company’s team members are former Barrick Gold (TSE:ABX) execs. Recently, the company announced the filing of a Preliminary Economic Assessment (PEA) for the Bunker Hill Mine. The company believes that the capital cost to rapidly restart the mine would be about US$42 million. Bunker Hill Corp. (CSE:BNKR) believes the Bunker Hill Mine might generate approximately $20 million in annual free cash flow over the mine’s 10-year life. Production possibilities according to a company news release provide the following numbers. 550 million pounds of zinc, 290 million pounds of lead, and 8 million ounces of silver at an all-in sustaining cost (AISC) of $0.65 per payable pound of Zinc.
“Our PEA confirms that by maximizing the use of existing resources, partnerships and infrastructure, the Bunker Hill Mine has the potential to be re-started rapidly as a low-cost, long life, sustainable operation. Pleasingly for our investors, the robust financial returns in the PEA, including a $101 million NPV, 46% IRR, and 2.5 year payback, do not include the significant upside to come from the on-going high-grade silver exploration which we expect to further increase cash flow margins. Based an annual average free cash flow of $20 million at metal prices below spot levels, we can self-fund these exploration efforts while continuing to grow the company. We look forward to progressing further technical studies and project finance discussions over the coming months.” Sam Ash, CEO, Bunker Hill Mining Corp.
Fortuna Silver Mines Inc. (TSX:FVI)
Founded in 1990, Fortuna Silver Mines Inc. (TSX:FVI) is a Canadian silver mining company based in Vancouver, BC. The two operating mines owned by the company are in Peru and Mexico, and one under construction in Argentina. The reason this slightly larger company makes the list today is a recent press release that involves Roxgold Inc. (TSX: ROXG). In the release, Instutional Shareholder Services Inc. and Glass, Lewis & Co., LLC, two leading proxy advisory firms, recommended to Fortuna and Roxgold shareholders that they vote in favor of a business combination between the two companies.
On January 19, 2021, Fortuna (TSX:FVI) unveiled the company’s 2021 consolidated production guidance. In the document, the company states they plan to produce between 6.8 million and 7.6 million ounces of silver and 178 to 202 thousand ounces of gold. The company’s San Jose production yielded 6.17 million ounces of silver and 37,805 ounces of gold as an example.
The merger proposed between Roxgold Inc. and Fortuna Silver Mines Inc. is the main highlight of Fortuna (TSX:FVI) recently, and the growth potential possible from this deal makes it another silver stock to watch in 2021.
“The Arrangement makes strategic sense as the deal should create a combined company which is well diversified by geography and will immediately have four mines in operation. Furthermore, the combined company will possess an extensive pipeline of projects in West Africa and the Americas and should be adequately supported by the strength of its combined balance sheet and free cash flow profile to continue developing and expanding such projects.” -Institutional Shareholder Services Inc., June 8 2021
Caution Regarding Forward-Looking Information
Information contained in this document which are not statements of historical facts may be “forward-looking information” for the purposes of Canadian securities laws and within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information involves risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward looking information. The words “believe”, “expect”, “anticipate”, “contemplate”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule”, “understand” and similar expressions identify forward-looking information.
