Post by
TITOOO on Jun 26, 2016 8:09pm
The Best Stocks to Play the Rally in Silver
Despite suffering a horrendous 2015 because of sharply weak silver, primary silver miner First Majestic Silver Corp. (TSX:FR)(NYSE:AG) is focused on reducing costs during 2016. It’s forecasted cash costs of US $7.11 to US$7.60 per ounce. It has also slashed its forecast 2016 capital expenditures by 18% compared with 2015, and both of these factors leave it capable of generating solid margins as silver rises.
The socond is small-cap miner Great Panther Silver Ltd. (TSX:GPR)(NYSE:GPL), which owns and operates two mining complexes in Mexico. What makes it appealing is the high quality of its silver ore, low operating costs (with 2016 forecast cash costs of US $5-7 per ounce), and its lack of debt. With US$14 million in cash and US$26 million in working, it is highly liquid and capable of generating a solid financial performance as silver rises. There is also some conjecture within the industry that it may become a takeover target at some point in the future because of its solid financial position, low market cap of $261 million, and high-quality assets.
It can be difficult to forecast the short-term outlook for silver because of its higher volatility than gold and the tremendous volume of paper contracts and recent allegations of major banks manipulating the price. Nonetheless, what is increasingly clear is that silver is set to rally over the course of 2016 and, while no investment is risk free, First Majestic Silver Corp. and Great Panther Silver ltd. stocks discussed above are well positioned to take advantage of this rally and deliver value for investors.