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Silver has had a lackluster few weeks, but it looks like the tide may finally be turning.
Silver has had a lackluster few weeks, but it looks like the tide may finally be turning.
Pulled upward by gold, which on Monday hit its highest price in nearly three weeks, in part due to strong Chinese gold consumption, the white metal began the week at $21.04, already above $20.56, its high for the previous week.
The next day, it broke away from gold, according to Scotiabank, rising to $21.69 and then reaching $22.05 on Wednesday. Today, silver prices have continued to improve, hitting $23.17 before closing at $23.01.
That places the white metal in bull market territory, according to The Wall Street Journal — welcome news for those who have been waiting patiently for silver to raise its head above $21.
The question now, of course, is where silver prices will go next. Giving some insight into that question, Capital Trading Group notes in its daily precious metals commentary that in the short term, the market may react to US producer price index data.
Company news
Yesterday, First Majestic Silver (TSX:FR,NYSE:AG) released its unaudited interim consolidated financial results for the second quarter of 2013, commenting that it produced 2,767,966 ounces of silver, up 44 percent from its Q2 2012 total, and 3,268,117 ounces of silver equivalent, a 55-percent increase from the year-ago quarter. However, the suspension of silver sales during the quarter brought the company’s net earnings down to $0.2 million, below the $15.3 million it achieved this time last year.
Also reporting second-quarter results was MAG Silver (TSX:MAG,NYSEMKT:MVG), which recorded a net loss of $10.2 million, “primarily as a result of the write-off of non-core assets.” As of the end of the quarter, the company held working capital of $33,874,230, including cash of $33,402,419.
Silver Wheaton (TSX:SLW,NYSE:SLW) fared better, achieving record attributable silver equivalent production of 8.6 million ounces, a 28-percent increase from the year-ago quarter. While it did not suffer a net loss, the company’s net earnings fell 50 percent, to $71.1 million from $141.4 million in Q2 2012. CEO Randy Smallwood told Forbes that he “point[s] specifically to the price of silver as being the issue.”
On a different note, Silver Bull Resources (TSX:SVB,NYSEMKT:SVBL) announced the results of underground channel sampling that targeted the north, east and west extension to the Shallow Silver Zone of the company’s Mexico-based Sierra Mojada project. Silver Bull’s press release notes that sample highlights include:
- North extension: 1,620 g/t silver over 1 meter, 1,530 g/t silver over 0.6 meters, 1,520 g/t silver over 1 meter, 1,055 g/t silver over 1.27 meters, 781 g/t silver over 2 meters.
- East extension: 1,035 g/t silver and 28.3-percent zinc over 1 meter, 527 g/t silver and 17.4-percent lead over 1 meter, 801 g/t silver and 19.6-percent lead over 1.3 meters, 433 g/t silver and 18.95-percent lead over 1 meter.
- West extension: 566 g/t silver and 10.15-percent zinc over 1.5 meters, 391 g/t silver and 1.16-percent copper over 1.5 meters, 327 g/t silver and 2.59-percent zinc over 1.5 meters, 307 g/t silver and 1-percent copper over 1.5 meters.
Fortuna Silver Mines (TSX:FVI,NYSE:FSM) put out results for 12 further surface drill holes at its Trinidad North high-grade silver-gold discovery at the Mexico-based San Jose mine, commenting that highlights include 487 g/t silver and 4 g/t gold over 8.2 meters.
Junior company news
On Monday, Camino Minerals (TSXV:COR) provided the final assay results from drilling completed recently at its Mexico-based El Secreto gold and silver project, commenting that hole SE-13-013 returned 232.3 g/t silver and 0.33-percent lead over 6 meters. The company plans to compile and interpret the data created by the drill program before embarking on further exploration work.
Later in the week, Trevali Mining (TSX:TV,OTCQX:TREVF), which has been having an eventful summer, began producing zinc and lead-silver concentrate from the metallurgical plant at its Peru-based Santander mine. Its press release notes that the crushing, transfer, grinding, flotation and tailings circuits are all “operational and undergoing commissioning and optimization” and that during day shifts, the mill is processing stockpiled mineralized feed.
Dr. Mark Cruise, president and CEO of Trevali, commented, “[c]ommencing metal concentrate production from our Santander Mine is a major achievement for Trevali. We now aim to ramp-up operations to the planned 2,000-tonne-per-day throughput.”
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Related reading:
Silver Aimless as Majors Report Q2 Results
Silver Wheaton’s Smallwood Optimistic About Q1 Results