The junior silver stocks we’ve discovered could have the best upside as the silver price moves higher
SmallCapPower | May 20, 2020: Silver’s role as an industrial metal has tempered its advance relative to that of gold during the past year, but this appears to be changing if the recent spike in the gold/silver ratio is any indication. Today we have chosen two junior silver stocks that look to have superior upside in a rising silver price environment.
*Returns are based on closing stock prices as of May 19, 2020
Fortuna Silver Mines Inc. (TSX:FVI) – $5.84
Fortuna Silver Mines is a precious metal producer with assets that include the Caylloma silver mine in Peru, the San Jose silver-gold mine in Mexico and the Lindero Gold Project, currently under construction, in Argentina. On May 14, 2020, Fortuna Silver reported a six-fold increase year over year in its first-quarter free cash flow to US$14.2 million. The Company added that it plans opex and capex reductions of US$23 million for 2020 in response to the new COVID-19 business environment. Significant upside for this stock could come from the start of production at the Lindero open pit heap leach gold mine, in which Fortuna said its construction was about 94% complete as of March 31, 2020. The Argentine mine is expected to be one of the most profitable mining operations.
- Year-To-Date Return: 10%
MAG Silver Corp. (TSX:MAG) – $18.29
MAG Silver is a development and exploration company focused on becoming a top-tier primary silver mining company. Its principal asset is its 44% stake in the Juanicipio Project in Mexico, being developed in a Joint Venture with Fresnillo. Underground production at Juanicipio is scheduled for mid 2020 and it is expected to become one of the world’s largest silver mines. A 2017 resource estimate at Juanicipio showed 176 million Indicated silver ounces at 427 grams per tonne. Eric Sprott recently invested C$60 million into MAG Silver via a non-brokered private placement at a price of C$13.25 per share.
- Year-To-Date Return: 19%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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