Precious Metals

Silver Investing

“If I had to turn anywhere … it would be the mining sector, specifically precious metals mining companies,” the famed economist said in an interview Wednesday.

August was a month of ups and downs for the silver price. The white metal rose fairly steadily for the first half of the month, hitting a high of $15.58 per ounce on August 20; it then took a steep drop to $14.11 just under a week later.  
Luckily for fans of the precious metal, the silver price has steadied around the $14.60 mark since then, and in the first week of September has even seen a bit of an uptick. As of 5:00 p.m. EST on Thursday it was sitting at $14.72, down slightly from the weekly high of $14.86 that it hit earlier in the day.
Explaining what’s been driving the silver price, Money Morning’s Alex McGuire states that while worldwide stock market volatility moved the metal in August, September’s relative stability has mirrored what’s going on in the broader market. He added, “[Thursday’s] quiescence can be attributed to China, whose markets are closed on Thursday and Friday this week.”
Encouragingly, some market watchers believe that the next move for silver will be upward. For instance, Kitco’s Jim Wyckoff said Thursday that while silver’s long-term technicals remain bearish, all is not lost. “[I]f you look at longer term price chart and you get below $15, I suspect that there is certainly more upside potential than downside potential for silver at that price level,” he said.
More notably, famed economist Marc Faber has stepped forward to say that although “there is no safe asset anymore,” he believes the mining space — and precious metals in particular — has potential. “If I had to turn anywhere … it would be the mining sector, specifically precious metals mining companies,” he told Bloomberg in a video interview Wednesday.
He mentioned gold miners Freeport-McMoRan (NYSE:FCX), Newmont Mining (NYSE:NEM) and Barrick Gold (TSX:ABX,NYSE:ABX) as stocks he sees as interesting.

Company news

Tahoe Resources (TSX:THO,NYSE:TAHO), whose Guatemala-based Escobal mine was the world’s second-largest primary silver producer last year, declared its ninth monthly dividend for 2015 on Thursday. It came in at $0.02 per common share, and shareholders of record on close of business on September 17 will receive it on September 24.
The same day, Tahoe’s executive chair, Kevin McArthur, made a statement on the recent resignation of Guatemala’s president. He said, “I want to assure shareholders that today’s resignation of the President of Guatemala, Otto Perez Molina, is not expected to affect our Guatemalan operations.” He believes the move will ultimately be positive for the government, which has been “divided by recent corruption.”
Also on Thursday, Cyprium Mining (TSXV:CUG) released channel sampling results from the historic Mexico-based Potosi silver mine. According to the company, 13 channel samples were taken on levels six and 11 of the mine, with three samples from level six yielding a weighted average of 733 g/t silver, 1.12 percent lead and 0.53 percent zinc over an average sample width of 1.53 meters.
Commenting on the news, Alain Lambert, Cyprium’s chairman and CEO, said, “[w]hile the rehabilitation of shaft #3 and #5 as well as starting initial pilot production at level 2 to 4 and 9 & 10 remain our priority, our technical team continues the underground exploration of the Potosi mine with a view of identifying future production targets.”
It’s also worth noting that a couple of silver-focused companies announced financing news earlier this week. Prophecy Development (TSX:PCY,OTCQX:PRPCF) said Monday that it’s undertaking a non-brokered private placement that will involve it issuing up to 40 million units priced at $0.05 each. All in all, the company expects to raise total cash proceeds of $1.25 million; in addition, it will settle $750,000 in debt.
Finally, Bayhorse Silver (TSXV:BHS) closed the second and final tranche of a 2-million-unit non-brokered private placement. The company raised US$250,000 via the first tranche and $60,000 via the second. The money will be put towards the Bayhorse Silver mine, as well as general and administration purposes.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 


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