#Silver #Stocks to Watch (NYSE: $CDE) (NYSE: $AG)
(TSX: $FR.TO) (NASDAQ: $PAAS) (TSX: $PAAS.TO) (TSX: $SVM.TO) (NYSE American:
$SVM) - Silver is on a Winning Streak
Point Roberts WA, Delta BC, May 29, 2020-
Investor Ideas, a global investor news source covering mining and metals stocks
releases a sector snapshot on silver stocks featuring First Majestic Silver Corp. (NYSE: AG) (TSX: FR.TO).
Read
this news featuring First Majestic in full at https://www.investorideas.com/news/2020/mining/05291Silver-StocksToWatch.asp
Silver stocks have
been making headlines with some significant single day runs in the double
digits. On May 15th Motley Fool reported, “Shares of silver miner Coeur Mining (NYSE:CDE) were higher by 19% at 2 p.m. EDT. Following close
behind were mining peers First Majestic Silver (NYSE: AG) (TSX:
FR.TO), Pan American Silver
(NASDAQ:PAAS) (TSX: PAAS.TO), up 10%, 11%, respectively.”
Continued: “Silvercorp Metals (TSX: SVM.TO) also jumped, peaking at a gain of 10% before
pulling back into the high single digits.”
But this is not a one
day wonder when you look at some of the recent trends and performances.
Looking at the why,
some key points noted by First
Majestic Silver Corp. (NYSE: AG) (TSX: FR.TO) in their most recent investor
presentation; “Over the past 10
years, the silver industry has been in a 500M ounce physical deficit, and the
current silver to gold mine supply ratio is 8:1.”
Another key trend
driving silver that fits into the growing ESG investing movement; First Majestic Silver notes
that, “As we go green we need more silver.”
On May 14th
First Majestic Silver Corp.
(NYSE: AG) (TSX:
FR.TO) announced their
unaudited interim consolidated financial results of the Company for the first
quarter ended March 31, 2020.
Key
highlights included:
Revenues generated in the first quarter
totaled $86.1 million compared to $86.8 million in the first quarter of 2019.
Due to the volatile decline in silver and gold prices near the end of the
quarter, the Company decided to withhold pricing on approximately 292,000
ounces of shipped silver and 700 ounces of shipped gold and retained those
ounces in its finished goods inventory. Had these ounces been sold at the end
of the quarter, it would have contributed an additional $5.3 million to
revenues based on spot metal prices.
The Company reported mine operating earnings
of $21.1 million compared to $10.3 million in the first quarter of 2019. The
increase in mine operating earnings in the quarter was attributed to a 10%
increase in average realized silver price and lower cost of sales and
depletion, depreciation and amortization due to the temporary suspension of
lower margin mines.
From
the news release - “As the COVID-19
pandemic sparked higher than normal volatility in the metals market near the
end of the quarter, we temporarily suspended our silver and gold sales as paper
prices dropped significantly below true physical prices,” stated Keith
Neumeyer, President and CEO of First Majestic. “These inventoried ounces have
been carried over into the second quarter and will be sold as prices improve.
Nevertheless, strong production from each of our three mines generated
operating earnings of $21.1 million, representing a 106% increase over the same
quarter of 2019.”
Looking at the company’s recent earnings report, Zacks
Research said, “Shares of the
company have gained 45.4% over the past year, outperforming the industry’s
growth of 15.5%.”
Continued: “First
Majestic reported mine-operating earnings of $21.1 million in the March-end
quarter compared with the year-ago quarter’s $10.3 million. This upside
resulted from a 10% increase in average realized silver price and lower cost of
sales and depletion, depreciation and amortization due to the temporary
suspension of lower margin mines.”
Most recently, on May 21st, Silvercorp Metals Inc. (TSX: SVM.TO) (NYSE American: SVM) reported its financial and operating results for the fourth
quarter and twelve months ended March 31, 2020.
From the news release: “Despite the extended shut-down during the
three months ended March 31, 2020 (“Q4 Fiscal 2020”) due to COVID-19, the
Company was able to achieve full year production target, surpassing its Fiscal
2020 guidance. As reported in the Company’s news release dated May 7, 2020, the
Company’s operations were ramped up to full capacity in March 2020 with no
employee infection and the Company is in full compliance with government
measures to prevent spread of COVID-19.”
Following the
earnings report, Zacks Research noted, “Silvercorp (SVM) came out with quarterly
earnings of $0.02 per share, beating the Zacks Consensus Estimate of a loss of
$0.01 per share. This compares to earnings of $0.03 per share a year ago. These
figures are adjusted for non-recurring items.”
“This quarterly
report represents an earnings surprise of 300%. A quarter ago, it was expected
that this mineral miner would post earnings of $0.06 per share when it actually
produced earnings of $0.04, delivering a surprise of -33.33%.”
Pan American Silver
Corp. (NASDAQ: PAAS) (TSX: PAAS.TO) reported its unaudited results for the first quarter ended
March 31, 2020 ("Q1 2020") on May 6th.
"The COVID-19
pandemic escalated quickly over Q1 2020. Pan American took immediate steps to
protect the health and safety of our people, and mobilized our business
continuity plans. We are also providing support to our local communities during
this very difficult time. In addition to our existing community programs, we
are donating $2 million in food and hygiene supplies, as well as facilitating
access to health care," said Michael Steinmann, President and Chief
Executive Officer.
Added Mr. Steinmann:
"Cash flow generation of $114.1 million in Q1 reflects the Company's
strong operating performance before the impact of the COVID-19 related mine
suspensions. However, earnings in the period were significantly impacted by
non-cash, mark-to-market investment losses and non-cash tax expense due to
COVID-19 related currency devaluations. We have a strong balance sheet with
approximately $479 million of total available liquidity, and we have taken
steps to defer or reduce non-essential expenditures to preserve our financial
strength. Many of the temporary COVID-19 related suspensions are now being
lifted, and we are preparing to restart those operations. Profit margins should
benefit from the improvement in gold prices combined with lower costs due to
currency devaluations in our operating jurisdictions."
Also realizing the
importance of attracting ESG investor acceptance and participation, in their
May 8th sustainability report, Pan American Silver (NASDAQ:PAAS) (TSX: PAAS.TO), announced, “ESG Call - Save the Date: Pan American is
planning to host a call to discuss its sustainability strategy and practices,
including its performance on ESG factors. The call is scheduled for September
14, 2020.”
Coeur Mining (NYSE:CDE) announced its responsibility report at the end of April
noting, “We strive to integrate our ESG principles at every level of our
business – from our Board of Directors to our frontline employees and
contractors,” said Mitchell J. Krebs, President and Chief Executive
Officer.“Publishing our Responsibility Report validates our goal of increased
transparency and accountability for our sustainability objectives. It is
imperative that we uphold our core values of Protecting our people, places and
planet, Developing quality resources, growth and plans, and Delivering
impactful results through teamwork. We plan to continue aligning our goals of
maximizing long-term stakeholder value with our strategy of safely and
responsibly discovering, developing and operating a balanced portfolio of
quality precious metals assets.”
Looking at the future of silver miners and mining and
metals stocks in general, adopting an ESG policy might invite a whole new
generation of investors to the sector.
Blackrock set the
bar for ESG standards for the sector and now reports, “Companies with strong
profiles on material sustainability issues have potential to outperform those
with poor profiles. In particular, we believe companies managed with a focus on
sustainability should be better positioned versus their less sustainable peers
to weather adverse conditions while still benefiting from positive market
environments.”
First Majestic Silver Corp. (NYSE: AG)
(TSX:
FR.TO), in addition to building out revenue and profitability
for its shareholders, also recognizes the importance of ESG to its investors.
“One of our core values-and a key building block of First Majestic’s vision-is
to work towards sustainability through exceptional corporate citizenship. We
know that operational excellence goes beyond the return to our shareholders; it
considers the well-being of our employees and their families, the communities
where we work and the impact on our environment while respecting the
fundamental human rights, cultures, customs and values of our employees and
communities. First Majestic is committed to socially responsible mining:
working safely, ethically and with integrity, taking responsibility for our
impacts on the environment and the communities where we operate, and
contributing to local sustainable development. We recognize that integrating
responsible practices into our management systems and standards across the
Company is essential to ensure the long-term prosperity of our business.”
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