Precious Metals

This week, the white metal continued the decline it began last week, closing today at $21.73.

This week, silver continued the slow downward movement it began last week, hitting $23.48 per ounce Monday morning after closing Friday at $23.87. 

Since then, the white metal’s price has only continued to decline. Tuesday, it fell to a low of $22.78 midway through the morning, retreating, along with gold, on the back of Russia’s offer of a plan to rid Syria of chemical weapons, Capital Trading Group states in its metals commentary for the day. Among other factors, concern that the US Federal Reserve will decide next week to taper quantitative easing (QE) also pushed silver down.

The metal was able to rise slightly above $23 later that day, but Wednesday brought little improvement; silver’s highest price that day was $23.20. Syria and Fed concerns again kept silver down, according to Capital Trading Group, while “positive Chinese economic projections overnight” may have brought it “some minor support.”

The real turn for the worse came earlier today. Spot silver was down to $22.18 by the morning, and only declined from there, ultimately closing at $21.73 for its biggest slump in nine weeks. Again, the culprits were the Syrian crisis — market participants are now reportedly optimistic that it is easing — and expectations that QE tapering is imminent, Bloomberg reported.

Addressing the question of what may happen if tapering occurs, Ole Hansen, head of commodity strategy at Copenhagen’s Saxo Bank, told the news agency that less stimulus “could potentially be a bit negative for silver. If they do a smaller amount than expected, that could indicate, ‘Yes, we have to start tapering, but we’re not entirely sure whether the economy is going to carry on from here.'”

Company news

Sierra Metals (TSX:SMT) announced early in the week that development at the Santa Eduwiges mine, located at its Cusi property, has opened two further areas of bonanza-grade silver mineralization. Bonanza grades at the Monaco vein, one of the new areas, include 2.45 meters averaging 1,925 g/t silver and 3.9 g/t gold and 1.9 meters averaging 8,240 g/t silver and 32.21 g/t gold.

Additionally, the company’s press release notes that mapping and sampling of the La Gloria vein, also located at its Cusi property, has returned “high grades of silver over significant strike lengths,” while mapping of the Milagro and San Rafael veins “gave encouraging visual results.”

Wednesday, Endeavour Silver (TSX:EDR,NYSE:EXK) intersected high-grade gold-silver mineralization in two veins via exploration drilling at its El Cubo mine in Mexico. Highlights there include 375 g/t silver and 1.8 g/t gold over 4.14 meters true width in hole CAS-6, including 768 g/t silver and 2.69 g/t gold over 0.49 meters true width.

Luis Castro, Endeavour’s vice president of exploration, commented, “[t]he discovery of these two mineralized veins near the historic Asunción mine workings at El Cubo represents our first exploration success since acquiring the El Cubo mine last year, and validates our view that the exploration potential for new discoveries at El Cubo is very high.”

Finally, in what is being described as a precedent-setting move, today, First Majestic Silver (TSX:FR,NYSE:AG) and Minera Frisco (OTC Pink:MFRVF) had their mining licenses in Mexico’s Wirikuta region suspended by a district court, according to La Jornada.

Wirikuta is a site that is sacred to the Huichol, and the suspension means the companies are unable to do any exploration or exploitation work in that area. While that may sound dire, in fact only one of First Majestic’s six exploration and development projects will be affected by the news. Further, as yet the licenses have only been suspended, not cancelled entirely.

Junior company news

On Monday, Almaden Minerals (TSX:AMM,NYSEMKT:AAU) revealed the results of its ongoing drill program at the Ixtaca gold-silver zone of its Mexico-based Tuligtic project, noting that highlights include 25.5 meters at 0.66 g/t gold and 102.3 g/t silver (2.7 g/t gold equivalent), including 2.08 meters at 4.35 g/t gold and 975 g/t silver (23.9 g/t gold equivalent) in hole TU-13-287. To date, the company’s focus has been on expanding “the known resource immediately along strike to known mineralisation.”

Also reporting drill results was Dolly Varden Silver (TSXV:DV,OTCBB:DOLLF). On Wednesday, the company announced assays from the first four holes of its 2013 summer drill program, which targeted extensions of the Torbrit deposit, located at the company’s British Columbia-based Dolly Varden property.

Ron F. Nichols, president and CEO of Dolly Varden, commented that results from a further 10 holes should be released in the next few weeks, also noting, “[i]dentification of distinct mineralization phases, including a late phase which introduces native silver at Torbrit is a very important breakthrough in understanding the formation, structure, and distribution of the highest grade mineralization and will be extremely valuable in targeting future exploration.”

The same day, Prospero Silver (TSXV:PSL) reported that its Mexican subsidiary, Minera Fumarola, has entered into a memorandum of understanding with Braeval Mexico, a subsidiary of Braeval Mining (TSX:BVL). Together, the companies will advance exploration with the Plomosa mining concession.

Thursday, Sunset Cove Mining (TSXV:SSM) provided the results of 20 underground samples from five of the six adits recently discovered at its Peru-based Carolay silver property, noting that assays returned “averages of more than 116 grams per tonne silver from nine of the chip samples.” Lorne Woods, the company’s president, explained in a press release that he believes the “high grade results with up to more than 1500 g/t of silver in one of the adits … demonstrate the potential viability of the Carolay Silver Project.”


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

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