At the inaugural SilverFest, run by Arcadia Economics, experts Andrew O’Donnell, Jerry Huang and Robert Kientz shared their silver stock picks.
Silver’s highest price ever is just under US$50 per ounce — it approached that point in the 1970s and did so again in 2011, but backed off both times.
The white metal is on another bull run right now, and this time many experts agree that silver is likely to both reach and pass that key US$50 level in the relatively near future.
What does that mean for silver stocks? At this year’s inaugural SilverFest, held online from September 11 to 13, a panel of experts discussed which companies they think will rise the most when silver hits US$50.
Led by Chris Marcus, founder of Arcadia Economics and host of the conference, the panel included Andrew O’Donnell of SuperCharged Stocks, Jerry Huang of merchant bank Jemini Capital and Robert Kientz of Gold Silver Pros. Here’s what they had to say about silver stocks, from large to small.
Large-cap silver stocks
On the large-cap side, all three participants had good things to say about First Majestic Silver (TSX:FR,NYSE:AG), a silver-mining company led by Keith Neumeyer.
“As far as a pure silver play, this one is by far my favorite,” said O’Donnell. “Just at the San Dimas property alone I think they’re expecting production of 67 million ounces of silver. It’s exploration, development, streams, you name it — the recovery rates are somewhere around 93 to 95 percent. And (they’ve been) implementing an entire tech strategy since 2018.”
He added, “That one in and of itself is a fantastic opportunity.”
Sharing his own thoughts on First Majestic, Huang mentioned Canadian billionaire Eric Sprott’s vote of confidence in the miner and said, “We love Keith, we love the whole team.” His only concern is that the company is not as pure in terms of silver percentage — “I think it’s almost like 60 percent silver,” he said.
Kientz is a fan of both First Majestic and Pan American Silver too. Like O’Donnell and Huang, he praised Neumeyer’s leadership and First Majestic’s technological advancements, while when looking at Pan American he had good things to say about its comeback story. He noted that Pan American struggled as an almost pure-play silver producer when the metal’s price was down, but now with more exposure to gold (and precious metals prices on the rise) it’s a “very, very strong company.”
O’Donnell also mentioned royalty and streaming company Wheaton Precious Metals (TSX:WPM,NYSE:WPM), which he described as a safer, more conservative bet for more generalist investors. “You’re going to see massive growth in that, it has such exceptional margins,” he said.
Mid-tier and junior silver stocks
Huang, who is the CFO of IMPACT, unsurprisingly shared positive words about the company. “It’s 90 percent pure silver, no debt, a massive land package,” he said, adding that IMPACT has a large treasury, has been successfully navigating COVID-19 and has Korea’s Samsung C&T (KRX:028260) as a client.
Kientz visited IMPACT earlier this year before the coronavirus hit in earnest, and also had good things to say. “I think if the question is which silver miners are going to do the best in percentage terms when silver hits US$50, you have to go IMPACT Silver,” he said. “They’re the purest-play silver miner — big, small, medium, doesn’t matter — in the marketplace.”
Other stocks mentioned by Kientz were SilverCrest Metals (TSX:SIL,NYSEAMERICAN:SILV), which he said seems to have “big drill results” every other month, and MAG Silver (TSX:MAG,NYSEAMERICAN:MAG), a company with a “monstrous” deposit that will soon start production. He also pointed to Vizsla Resources (TSXV:VZLA,OTCQB:VIZSF) and Reyna as pure exploration picks.
Speaking about Reyna, he explained that Peter Megaw, MAG’s chief exploration officer, believes Reyna’s land package includes the origin point for MAG’s silver deposit. “If his thesis is correct, Reyna could actually become MAG part two,” said Kientz. “And if that’s true, the investors that got in on those early capital raises are going to do extraordinarily well.”
As mentioned, Huang and O’Donnell were positive on Reyna as well. Huang also mentioned the company’s connection to the team at MAG, noting, “Peter seems to have found another MAG lookalike, and that’s Reyna.” For his part, O’Donnell simply said, “I think this company’s one that has to work out.”
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.