Took a vacation for a few months and 2018-2019 we are now back!
Mining 101 and looking at the junior mining sector and promising picks now that GDXJ and TSX Venture at a trough once again.
Gold:Silver ratio this morning with UBS suggesting silver needs more life to be relevant.
Last time this happened you saw in 2016 going to 80:1 it bounced sharply down to 60:1 helping silver jump to $23/ounce briefly in July 2016.
At this historical high levels we think there are some promising names for silver miners out there.
What we like:
1/ First Majestic (FR.TO / AG:NYSE)
Can't beat size end of the day. Though some concerns about mine closures and the operational issues inherited from their Primero Mining (gold) exposure, the one to watch in sector are always the 10 million ounce a year producers. Keith CEO and founder is always promoting and marketing which as a public company you want to see.
Put a stoppage at smaller marginal mines like La Guitarra --- and focusing more on Santa Elena and the newly acquired San Dimas (Primero) good moves in long term though short term pain in layoff, severance, and blows to social credit may cause some issues.
Also an easy trade tax loss (Dec) to March pretty much every year.
2/ Silvercrest (SIL.TO / SILV:NYSE)
Funny enough the team that sold Santa Elena which is now First Majestic's most profitable operation has been a 20X since IPO at $0.25 in the ultra bear market of late 2015. It's currently trading over $4/share - amazing story. Likely a take out offer - even $5 at a 40% premium is a now $2 arbitrage... buy before it's gone. Top 10 high grade project out there here folks.
Going to the smaller punts out there we also like
3/ IMPACT Silver (IPT:TSXV / ISVLF:OTCBB)
The optionality on silver is crazy here with 90% revenues to silver, easily the best out of all the small producers out there. Best thing is there is no debt, and the company steadily operates, drills, discovers, and repeat!
Not a new story, and going back 15+ years on a property that has been around for 500 years certainly gives good reassurance there is more metals in ground.
Company indicates they've produced over 9 million ounces while rest of sector juniors have been pounding table selling "ounces in ground".
In 2019 they've just signed a deal with Samsung (yes the electronic giant) to sell them silver and more... reading between the lines maybe there is more financing/deals coming on this angle?
See the 2015-2016 run? Feels like 2019 is awfully similar here again!
Honorable mentions:
4/ Kootenay Silver (KTN:TSXV) I feel this one is undervalued because it used to be so high and promises nearly 170 million ounces in ground. That's a significant amount of silver and at $20M market cap screams bargain. Team can raise money fast - last Mar 2019 quarter had over $7M cash.
5/ Excellon Silver (EXN:TSXV) market darling when it is, not so much when it's not. Persistent water issues seem to plague Platosa but market seem to have lost count of how many delays/cost overrun it's taken to de-water it properly. Down from a peak of $2.4 when it last raised $8M+ with Cantor and others, it's been a struggle but with highest grade silver in Mexico that's a good saving grace. Eric Sprott is a personal shareholder here which alot of investors like.
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