With central banks flooding the world with phony paper money, the outlook for silver prices has never been better. But how can investors take full advantage of a rally in precious metals? Mining stocks.
Silver prices tumbled during the past year. A lot of silver mining companies shrank their operations as a result. However, there are still solid companies in this sector. Here are a few top mining stocks to watch in 2016:
First Majestic Silver Corp. (NYSE/AG)
First Majestic Silver Corp. (NYSE/AG) is a Canadian silver mining company. It operates in Mexico, one of the most mining-friendly countries.
The company owns five silver producing mines, and has two future projects. Despite the recent downfall in silver prices, First Majestic’s silver production increased. It expects production to be between 11.8 to 13.2 million ounces in 2015.
First Majestic has decreased its cost substantially in recent quarters. All-in sustaining cost per ounce of silver was reduced from $19.89 in Q3 2014 to $14.43 in Q4 2014, and then to $13.88 in Q1 2015.
The company’s stock price has declined dramatically over the past 12 months. Trading at $4.43 a share on Friday July 10th, it is 56.7% lower compared to a year ago.
Hecla Mining Co. (NYSE/HL)
Founded in 1891, Hecla Mining Co. (NYSE/HL) is a precious metals mining company headquartered in Coeur D’Alene, Idaho. It owns the Lucky Friday mine, the Greens Creek mine, and the Casa Berardi mine.
The company produced 2.9 million ounces of silver and 40,650 ounces of gold in the first quarter of 2015. Cash cost, after by-product credits, was an impressive $4.93 per ounce of silver.
Silver production at the Lucky Friday mine in the first quarter of 2015 increased 20% year-over-year. It also has strong growth potential: by 2018, silver production at the mine is expected to grow by 60% to five million ounces.
Like most precious metals mining companies, Hecla Mining’s share price tumbled, losing 27.2% in the last 12 months.
Coeur Mining, Inc. (NYSE/CDE)
Coeur Mining, Inc. (NYSE/CDE) was originally founded to mine silver in the Coeur d’Alene region of Idaho. Now the company is the largest U.S.-based primary silver producer. It owns and operates the Palmarejo mine in Mexico, the San Bartolome mine in Bolivia, the Rochester mine in Nevada, the Kensington mine in Alaska, and the Wharf mine in South Dakota.
In the first quarter of 2015, Coeur Mining produced 3.8 million ounces of silver, and 69,734 ounces of gold. Company-wide silver reserves increased by 12%, with reserves at Palmarejo climbing 82%. Adjusted costs applicable to sales were $13.71 per silver equivalent ounce, showing a five percent decline from the fourth quarter of last year. For the entire year of 2015, the company expects to produce 14.8 to 16 million ounces of silver and 294,000 to 323,000 ounces of gold.