Best Silver Stocks of 2018 on the TSX

The silver price struggled to find a strong footing in the second quarter of the year. While it managed to hit a high of US$17.22 on April 19, it closed down 1.96 percent in Q2.

As investors watch interest rate hikes, political uncertainty and a surging US dollar, they continue to ignore the grey metal for the most part. However, despite the precious metal’s lackluster second quarter, it managed to escape the significant declines that its counterpart gold experienced, leaving many insiders to believe that silver may now be in a better position to outperform the yellow metal.

Here’s a look at the best silver stocks of 2018 on the TSX. The list below was generated on July 3, 2018 using the Globe and Mail’s market data filter, and it shows the TSX-listed silver companies that have seen the biggest share price gains year-to-date. Only companies with market caps above $50 million as of that date are included.

1. Endeavour Silver (TSX:EDR)

Current price: US$4.32; year-to-date gain: 32.52 percent

Endeavour Silver is a mid-tier precious metals mining company which owns three high-grade silver-gold mines in Mexico, with a fourth to start production this year.

In May, the company announced drill results for its Parral property in Chihuahua State, Mexico. Endeavour announced that it had intersected high-grade silver-gold-lead–zinc mineralization assaying up to 1,660 grams per tonne silver, 0.72 grams per tonne gold, 6.52 percent lead and 14.45 percent zinc.

Towards the end of June, the company announced that it intersected 618 grams per tonne of silver and 3.2 grams per tonne gold at its Terronera project, which has not yet started production.

“These infill drill results should have a positive impact on our reserves and resources. The high silver and gold grades, excellent continuity of mineralization and significant exploration upside to expand the resources reinforce our view that Terronera has the potential to become the next key asset for the company,” said Luis Castro, vice president, exploration.

The company is forecasting a 20 percent increase in production to 10.2-11.2 million ounces silver equivalent for 2018.

2. Pan American Silver (TSX:PAAS, NASDAQ:PAAS)

Current price: US$23.87; year-to-date gain: 20.68 percent

Pan America is the second-largest primary silver producer in the world. The company is involved in the discovery, engineering, innovation, and sustainable development of the grey metal.

At the end of April, the company hit a snag when it was forced to suspend operations at its Huaron mine, because of road blockades by members of the nearby Huayllay community. “The community members have demanded compensation from the company for alleged impacts to community land, as well as additional service contracts for construction work, haulage and material supply to the mine,” the company said in a press release.

On May 9, the company rebounded when it noted that the roadblocks had come to a close and also reported net earnings of US$48.2 during Q1.

3. SSR Mining (TSX:SSRM)

Current price: US$13.41; year-to-date gain: 19.93 percent

SSR Mining is a Vancouver-based intermediate precious metals producer with three mines in the Americas. As of December 31, 2017, the company boosted a balance sheet with US$460 million in cash and cash equivalents and US$114 million in marketable securities.

At the beginning of May, the company announced that its COO Alan Pangbourne would be retiring with Kevin O’Kane replacing him on June 4, 2018. O’Kane joined SSR Mining after working as an Asset President, Pampa Norte,  for BHP Minerals Americas.

“Kevin’s strong background in operations management, operational excellence, technical services, project development and safety will be invaluable as he leads our operating teams,” said Paul Benson, president and CEO.

Additionally, SSR updated the life of mine plan for the Marigold mine in Nevada, US for over ten years of mining to 2028 on June 18.

4. First Majestic Silver (TSX:FR)

Current price: US$10.53; year-to-date gain: 16.87 percent

First Majestic is a silver-focused company producing out of Mexico. Currently, the company owns and operates seven silver-producing mines with annual production from these mines projected to be between 27 to 30 million silver equivalents ounces per year.

On May 10, the company revealed that it had completed its acquisition of all of the issued and outstanding common shares of Primero.

“With this closing, First Majestic is integrating a large, world-class, silver and gold mine into its portfolio of operating mines. The San Dimas mine, becoming our seventh mine in Mexico, will result in a transformational leap forward in our production profile with an estimated doubling of profitable ounces produced,” said Keith Neumeyer, president and CEO of First Majestic.

That same day, the company also announced that it terminated a pre-existing silver purchase agreement with Wheaton Precious Metals (TSX:WPM) and its subsidiary, Wheaton Precious Metals International (WPMI), relating to the newly acquired San Dimas mine and entered into a new precious metal purchase agreement with WPMI and FM Metal Trading, a wholly-owned subsidiary of First Majestic, in order to increase post-stream cash flow at San Dimas.

5. Sierra Metals (TSX:SMT)

Current price: US$3.45; year-to-date gain: 16.16 percent

Sierra Metals is a Latin American precious and base metals producer. The company owns and operates three mines in commercial production: the Yauricocha Mine in Peru and the Bolivar and Cusi mines in Mexico.

On May 22, the company increased its mineral reserve estimate by 83 percent for its Bolivar mine, which averaged 19 grams per tonne silver, 0.86 percent copper and 0.25 grams per tonne gold.

Towards the end of June, Sierra announced that a new preliminary economic assessment for its Yauricocha silver-lead–zinc–copper–gold mine in Peru showed the company will be able to expand output by 66 percent to 5,500 tonnes per day.

What do you think were the best silver stocks of Q2 2018? Let us know in the comments below.

The data for this article was retrieved on July 3, 2018 using The Globe and Mail’s market data filter. Only TSX-listed silver companies with market capitalizations greater than $50 million are included.

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Securities Disclosure: I, Nicole Rashotte, currently hold no direct investment interest in any company mentioned in this article.