Silver Miners To Watch In 2018
Welcome to 2018. Some analysts are saying that this year is the year for gold. But there are a few other market watchers who are saying forget gold and watch silver, or better yet, buy silver. Be it physical bullion, silver ETF's or silver mining stocks. There are guys out there who are touting we will see $400+ silver price this year. I know it sounds far fetched and even though I think that a $400 call is out in left field, the fact is, silver is not only the smallest market in the world but also the most undervalued commodity in the world right now. And looking at all the scenarios silver is primed to explode up.
One of the first things most people wonder about is why the price of silver hardly ever gets above $20 per ounce. For starters most of the silver that is actually traded is so called paper silver on the futures and very few actually take delivery of the silver. According to the data put out by the 2017 World Silver Survey, total paper trading silver volume on the world's exchanges was 159,000 Moz, or 159 billion oz in 2016. So actually the exchanges traded 180 times more paper silver in 2016 than the global mine supply of 886 Moz. According to the data in the recently released 2017 World Silver Survey, total physical silver investment for 2016 came in at a whopping $4.4 billion:
Global Silver Investment 2016 (in million oz - Moz):
Basically what is happening is that the current system of paper trading and derivative betting will come to and end as someone, somewhere will require a lot of actual physical silver and won't settle for cash pay outs. In large quantities that will set the price of silver ablaze as silver is being used more and more everyday in technology, medicines etc. and there just isn't that much silver to be had. Infact many reports state that the current inventory of physical silver is running a deficit compared to mine out out.
- Physical Bar Investment = 83.6 Moz
- Official Coins & Medals = 123.2 Moz
- ETF Inventory Build = 47 Moz
- Grand Total Silver Investment = 253.8 Moz
So aside from investing in physical silver the next option and it can be one of the best options because it many cases miners can give you extreme leverage to the price of gold is to just buy stocks in a pure silver miner. A lot of silver that is mined today comes as a by product of gold and copper mines so finding a pure silver miner is what you want to look into buying. Following that you will want to narrow your search down to miners who are active in countries that have good mining politics and of course are known for high quality silver in the ground. Thirdly narrow your search to companies that already have proven ore deposits are those deposits are either already being exploited or are shovel ready.
Look for companies that have a low amount of shares out standing and where insiders or institutions hold a good percentage of the shares already. Companies with minimal debt and cash in the bank are also a real bonus. Make sure the company has not only proven resource but that the resource is economical to mine and that the company could produce silver for a decade or longer. The more resource the more value the company will have as the silver price goes up. Some companies with good proven resources will get bought out and usually at a premium price to what the stock is trading are presently.
Here is a short list of silver juniors that are well worth a look if you are thinking about buying into a silver miner this year.
- First Majestic TSX-FR - Mexico
- Silver One TSX-V:SVE - Mexico
- Avino Silver TSX-V:ASM - British Columbia
- Endeavour Silver TSX-EDR - Mexico
- Silvercorp TSX-SVM - China
- Silvercrest TSX-V:SIL - Mexico
- Bay Horse Silver TSX-V: BHS - US
- Americas Silver TSX-USA - Mexico
- Fortuna Silver TSX-FVI
- Great Panther TSX-GPR - Mexico
- Alexco Resources TSX-AXR - Yukon
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