As with gold, silver prices have experienced an impressive bullion bull market run since 2002. Having seen its price increase from less than six dollar per ounce to more than nineteen dollars per ounce, its gain has been well over three hundred percent this past decade.
Silver is different from gold in possessing a variety of industrial metal uses and applications, so there are numerous investors who see it as a significantly different kind of play than gold.
Silver mining stocks are typically those which also mine other base metals where the silver is found mixed, so a silver mining company investment also revolves around the prices of base metals such as copper, nickel, lead, and lead-zinc ores.
Still, not all silver mining companies are created equal, so before a person sinks their hard earned investment dollars into a company that they hope will adequately leverage the values of their silver mining holdings into significant stock price gains, you ought to consider the following four characteristics which have bearing on the merits of a silver mining company stock.
Actual Silver Reserves
As with any mining company, the amount of first proven, and secondarily probable, reserves is a significant factor to think about in evaluating whether or not a silver mining company proves to be a sound investment.
Companies that are out there exploring for silver, but do not really have any producing silver mines and silver metal reserves, are living in a dream world. We suggest only buying silver mining company stocks of firms which are well respected outfits actually selling silver for cold hard cash.
Location of Mines
Where a company’s silver mines are located is an important consideration. They may have a number of high yielding silver producing properties which are located in politically unpredictable continents like South America, Central America, or Africa.
These properties will do them no good whatsoever if the capricious dictator decides to nationalize the mines with little or no compensation in return. Better to pay a higher stock price and get a company with silver operations in North America, or at least a more stable country like Mexico or Peru.
Ratio of Silver to Base Metals
As mentioned above, silver is typically found in mixed ores. If you are seeking to profit from the increase in silver bullion prices, and not necessarily that of copper, zinc, or lead, then you will want to know what the annual production of silver is compared to the annual production of these base metals.
Cash Flow For Operational Funding
Silver mining companies that do not possess sufficient free flow cash from the sale of real silver are in trouble. It does not matter what their prospects are, if they are constantly at the mercy of the IPO and bond markets. Instead of fly by night operations, invest in companies with solid cash positions which are able to fund their day to day cash requirements.
Below are listed the world’s ten largest silver mining companies, with their stock ticker symbols, along with the country in which they are based. All of these outfits have real silver reserves, safely situated mines, high silver outputs relative to the quantity of base metals produced, and plenty of real cash flow to fund their regular ongoing operations.
The World’s Top Ten Silver Mining Companies (By Market Capitalization)
1. Goldcorp Inc. G.TO Canada
2. Mag Silver Corp. MVG United States
3. Coeur d’Alene Mines Corp. CDE United States
4. Silver Wheaton Corp. SLW United States
5. Compania de Minas Buenaventura SA BVN Peru
6. Pan American Silver Corp. PAA.TO Canada
7. Silvercorp Metals Inc. SVM.TO Canada
8. Gammon Lake Resources Inc. GAM.TO Canada
9. Silver Standard Resources Inc. SSO.TO Canada
10. Minefinders Corp. Ltd. MFL.TO Canada