1911 Gold Corporation (TSXV: AUMB; OTCQX: AUMBF)
1911 Gold is Manitoba’s Gold Standard - Ready, Permitted and High-Grade 1911 Gold is an Emerging Gold Producer, with Significant Cash Flow Generation and District-Scale Growth Potential
Over the past year, silver prices have achieved a remarkable surge, soaring from around $30 per ounce at the end of January 2025 to over $100 currently—an increase of more than twofold. Amid persistently high inflation, silver is regarded as an effective hedge against inflation and a relatively safe haven outside traditional stock markets.
The surging demand from technological sectors such as solar panels and electric vehicles has led to a severe shortage of physical silver. Data shows that the silver supply deficit in 2025 reached 95 million ounces. This indicates that despite the substantial rise in silver prices over the past few months, its investment value has not diminished.
Compared to directly investing in physical silver, investing in silver mining companies may be a more prudent choice. Currently, mining companies possess a hidden advantage: when silver prices rise significantly above extraction costs, corporate profit margins will expand notably.
Geopolitical developments have introduced new uncertainties into the silver market. At the beginning of 2026, factors such as changes in tariff policies and the U.S. plan to purchase Greenland from Denmark have echoed the geopolitical turbulence of 2025, intensifying global market uncertainty. Against this backdrop, resource companies primarily focused on the U.S. domestic market offer relatively stable returns for investors.
As a commodity producer, Hecla Mining’s profitability is susceptible to fluctuations in silver prices. Historical data shows that during the period from silver’s peak in 2011 to its trough in 2014, the company’s profit margin plummeted from over 20% to negative 20%. A similar trend reemerged between 2022 and 2023, when silver prices retreated from their 2020 highs. However, trends over the past five years suggest that as long as silver maintains its upward momentum, Hecla Mining’s profit margins and stock price are likely to climb in tandem.
Although current profit margins have not yet fully kept pace with the surge in silver prices, they are already showing growth. For example, Hecla Mining’s Greens Creek mine in Alaska has an all-in sustaining cost of only $11.01 per ounce of silver. After accounting for by-product revenues, the mine even achieves a negative cash cost, making Hecla Mining one of the lowest-cost producers in North America. This cost advantage provides a buffer during periods of low silver prices and transforms into a profit engine when silver prices rise.
Globally, with robust demand for physical silver and limited new supply from mining, Hecla Mining is poised to continue selling silver at higher prices in the coming quarters. Its positioning as a low-cost producer enables it to fully benefit from this market trend. These multiple favorable factors combine to create a perfect storm, driving silver producers’ stock price gains to outpace those of silver itself—Hecla Mining’s stock price surged 291% in 2025, far exceeding silver’s 144% increase.
Investors can also reap returns from silver price volatility. Hecla Mining (HL) has a dividend mechanism linked to silver prices, currently yielding approximately 0.05%. As silver prices rise, shareholder dividends are expected to increase steadily. The company’s low payout ratio of less than 5% leaves ample room for future dividend growth, but investors should focus more on its ability to capture the upside potential of silver.
Amid frequent geopolitical turbulence, Hecla Mining’s significant presence in the North American market shields it from international instability. Following silver’s substantial rise in 2025, its low-cost mines offer investors an attractive allocation option.
