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Silver prices fared well at the beginning of the week, but comments from US Federal Reserve Chairman Ben Bernanke ultimately brought them down.
After climbing the charts last week to hit a six-week high, since Monday silver’s sailing has been less smooth. Though the white metal began the week strongly, trading between $19.69 and $20.09 per ounce on Monday and Tuesday, it hit a roadblock Wednesday and closed at $19.38 Thursday.
As is often the case, that roadblock was US Federal Reserve Chairman Ben Bernanke. On Wednesday, the white metal rose to $20.05 after he said in a prepared statement before congressional committees that the central bank’s stimulus exit plans could change if the economic outlook in the US shifts, CNBC reported. However, the metal’s rise was fleeting. Soon after, Bernanke explained that the Fed is still on track to reduce quantitative easing later this year and end it entirely midway through 2014. On that news, silver quickly sank to $19.35.
Amidst the turmoil of Bernanke’s comments, Canaccord Genuity made big cuts to its outlook for silver and gold prices, lowering its 12-month forecast for silver to $23 per ounce from $32.50; it reduced its 12-month gold forecast to $1,350 per ounce from $1,750. The new numbers assume prices will stay at the new levels from 2014 to 2017.
While those cuts are steep, The Globe and Mail emphasizes that analysts at Canaccord are still optimistic about the metals in the long term — they just think that prices will take longer to recover than they initially expected. “We remain optimistic that the gold price should move substantially higher longer term, given our view that the current environment will likely not justify development of meaningful new gold projects and could lead to reserve declines in the sector, thereby leading to declining global mine supply going forward,” they said.
Company news
On Monday, Endeavour Silver (TSX:EDR,NYSE:EXK) came forward with some good news, announcing that its Q2 2013 revenues are 12 percent higher than originally reported. The new amount is $71.3 million, a 76-percent increase from the same quarter last year and a new quarterly record for the company. The understatement was due to “the marking to market of certain concentrate sales that had already received final pricing during the quarter,” according to Endeavour’s press release.
Two days later, SilverCrest Mines (TSXV:SVL,NYSEMKT:SVLC) released second-quarter production numbers from its Mexico-based Santa Elena mine, noting that it achieved record silver production of 194,022 ounces, a 26-percent increase compared to the previous quarter. Its silver equivalent production came in at 665,684 ounces, up 20 percent from Q1.
Also reporting Q2 results this week was Mexico’s Fresnillo (LSE:FRES), which saw a 6.3-percent increase in second-quarter attributable silver output over the year-ago period; its half-year attributable silver production rose by 4.5 percent compared to the same time in 2012. That amounts to total silver production of 10.93 million ounces for 2013′s second quarter.
Finally, Coeur Mining (TSX:CDM,NYSE:CDE) revealed that its second-quarter silver production came in 21 percent higher than it was during the first quarter of this year. The miner put out 4.6 million ounces of silver and 60,757 ounces of gold and said that its production guidance remains unchanged.
As is evident, many major miners have already released their results for the second quarter of 2013; however, some have yet to do so. Keep an eye out for Q2 releases from First Majestic Silver (TSX:FR,NYSE:AG) and Silver Wheaton (TSX:SLW,NYSE:SLW) on August 13 and 14, respectively. Both companies will also be holding conference calls.
Junior company news
Dolly Varden Silver (TSXV:DV) began drilling at its British Columbia-based Dolly Varden property this week. Its three main goals for its 2013 drill program are to: define a new silver resource estimate around the existing Torbrit workings, demonstrate that Torbrit is part of a larger volcanogenic massive sulphide system and continue to gather geotechnical information in the hope of finding an Eskay Creek-type deposit at Red Point.
Southern Silver Exploration (TSXV:SSV) announced that Minera Plata del Sur, its fully owned subsidiary, has finished an eight-core-hole, 3,445-meter drill program at the Mexico-based Cerro Las Minitas project, commenting that it successfully “confirm[ed] the distribution of high-grade mineralization in the Blind zone and identif[ied] significant extensions of mineralization at each of El Sol and South Skarn targets.”
Freeport-McMoRan Copper & Gold (NYSE:FCX) has the right to acquire up to a 70-percent indirect interest in the project.
Aura Silver Resources (TSXV:AUU), along with Intrepid Mines (TSX:IAU,ASX:IAU), its joint venture partner, will receive a net payout of about US$1.85 million now that Pan American Silver (TSX:PAA,NASDAQ:PAAS) has completed the sale of the West Taviche concession to Fortuna Silver Mines (TSX:FVI,NYSE:FSM). Of that amount, Aura expects to receive about $1.3 million.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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