Two Silver Stocks to Watch Closely in January 2024

Published on: Jan 27, 2024
Author: Caroline Kong

Although silver is more volatile in price compared to gold, and silver is far less favourable than gold as a safe-haven asset. However, silver may be more attractive to investors than gold at certain times because silver has huge industrial demand, including solar, electric vehicles and clean energy. During phases of economic recovery, silver tends to outperform gold. The final thing is that silver prices are still at the bottom right now and the upside is huge.

In the mining sector, silver is often mined as a byproduct of other metals, such as copper and gold, and these factors can sometimes limit investors’ exposure to silver stocks. However, the following two silver stocks stand out from the rest due to their unique advantages.

First Majestic Silver

First Majestic Silver (NYSE:AG) currently generates 51% of its revenue from silver and 49% from gold, making the company one of the purest silver plays in the mining space. As a Canadian company, the company is focused in Mexico, which produces more silver than any other country in the world. First Majestic currently operates three silver mines in Mexico, with several more under development. In addition, it also operates the Jerritt Canyon gold mine in Nevada.

By focusing on silver production, First Majestic has been able to increase production while reducing costs, allowing profits to grow faster than the price of silver. However, its business model also made it vulnerable to operational problems and cost overruns. Mining problems, management failures and exposure to other commodities can all affect the stock performance.

First Majestic aims to become the world’s largest primary silver producer and at currently is investing millions of dollars a year in finding and developing new silver mines. As such, this silver stock is one to watch for investors in 2024.

SilverCrest Metals (SILV)

SilverCrest Metals (NYSE:SILV) engages in the exploration, acquisition and development of minerals and precious metals. The company’s strength lies in its strong focus on growth and exploration, including a $10 million exploration budget allocated to the Las Chispas property, reflecting the company’s emphasis on sustained growth through exploration. Management aims to convert existing resources into reserves and discover new resources.

In addition, the company increased its position by $6.1 million in the third quarter of 2023 by an option strategy, highlighting the focus on strategic financial management. In terms of mining and development rates, underground mining increased to over 900 metric tonnes per day, reflecting operational efficiency and successful resource extraction, as well as the ability to meet production targets.

On this basis, production at the Las Chispas processing plant exceeded expectations of 1,245 metric tonnes per day and metallurgical recoveries of gold and silver were maintained at a consistent level of approximately 98%. The company’s current average all-in sustaining cost (ASIC) per ounce of silver produced per quarter was $12.23, which is in line with annual guidance. Therefore, managing costs effectively helps maintain healthy margins and financial sustainability. In summary, even if silver prices face headwinds in 2024, this silver stock should do quite well.

If you’re interested in investing in silver stocks, you might want to keep an eye on this company: Silver Storm Mining Ltd. (TSXV:SVRS). Silver Storm Mining Ltd. holds advanced-stage silver projects located in Durango, Mexico. Golden Tag recently completed the acquisition of 100% of the La Parrilla Silver Mine Complex, a prolific operation which is comprised of a 2,000 tpd mill as well as five underground mines and an open pit that collectively produced 34.3 million silver-equivalent ounces between 2005 and 2019. The Company also holds a 100% interest in the San Diego Project, which is among the largest undeveloped silver assets in Mexico.

Disclaimer: Investing involves risk, and individuals should conduct thorough research and seek professional advice before making financial decisions. NAI is being compensated for this content. Materials contained in this content are for information purposes only and is not intended to constitute an offering of securities in any jurisdiction. Nothing on this content should be construed as an offer, solicitation or recommendation to buy or sell products or securities.

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