Follow the Money with #Silver #Stocks
(NYSE: $CDE) (NYSE: $AG) (TSX: $FR.TO)
(NASDAQ: $PAAS) (TSX: $PAAS.TO) (TSX: $SVM.TO) (NYSE American: $SVM) – Recent
Performance Shows Silver is on a Winning Streak
“As we
go green, we need more silver” - First Majestic Silver Corp.
Point Roberts WA, Delta BC, May 28, 2020-
Investor Ideas, a global investor news source covering mining and metals stocks
releases a sector snapshot on silver stocks featuring First Majestic Silver Corp. (NYSE: AG) (TSX: FR.TO).
Read this
news featuring First Majestic in full at https://www.investorideas.com/news/2020/mining/05281CDE-AG-FR-PAAS-SVM.asp
Silver stocks have
been making headlines with some significant single day runs in the double digits.
On May 15th Motley Fool reported, “Shares of silver miner Coeur Mining (NYSE:CDE) were higher by 19% at 2 p.m. EDT. Following
close behind were mining peers First Majestic Silver (NYSE: AG) (TSX:
FR.TO), Pan American Silver (NASDAQ:PAAS) (TSX: PAAS.TO), up 10%, 11%,
respectively.”
Continued: “Silvercorp Metals (TSX: SVM.TO) also jumped,
peaking at a gain of 10% before pulling back into the high single digits.”
But this is not a one
day wonder when you look at some of the recent trends and performances.
Looking at the why,
some key points noted by First
Majestic Silver Corp. (NYSE: AG) (TSX: FR.TO) in
their most recent investor
presentation; “Over the past 10 years, the silver industry
has been in a 500M ounce physical deficit, and the current silver to gold mine
supply ratio is 8:1.”
Another key trend
driving silver that fits into the growing ESG investing movement; First Majestic Silver notes
that, “As we go green we need more silver.”
On May 14th
First Majestic Silver Corp.
(NYSE: AG) (TSX:
FR.TO) announced their unaudited interim consolidated financial results of
the Company for the first quarter ended March 31, 2020.
Key
highlights included:
Revenues generated in
the first quarter totaled $86.1 million compared to $86.8 million in the first
quarter of 2019. Due to the volatile decline in silver and gold prices near the
end of the quarter, the Company decided to withhold pricing on approximately
292,000 ounces of shipped silver and 700 ounces of shipped gold and retained
those ounces in its finished goods inventory. Had these ounces been sold at the
end of the quarter, it would have contributed an additional $5.3 million to
revenues based on spot metal prices.
The Company reported
mine operating earnings of $21.1 million compared to $10.3 million in the first
quarter of 2019. The increase in mine operating earnings in the quarter was
attributed to a 10% increase in average realized silver price and lower cost of
sales and depletion, depreciation and amortization due to the temporary
suspension of lower margin mines.
From the news release - “As the COVID-19 pandemic sparked higher than normal volatility in the
metals market near the end of the quarter, we temporarily suspended our silver
and gold sales as paper prices dropped significantly below true physical
prices,” stated Keith Neumeyer, President and CEO of First Majestic. “These
inventoried ounces have been carried over into the second quarter and will be
sold as prices improve. Nevertheless, strong production from each of our three
mines generated operating earnings of $21.1 million, representing a 106%
increase over the same quarter of 2019.”
Looking at the company’s recent earnings report, Zacks
Research said, “Shares of the company have gained 45.4% over the past year,
outperforming the industry’s growth of 15.5%.”
Continued: “First Majestic reported mine-operating earnings of $21.1
million in the March-end quarter compared with the year-ago quarter’s $10.3
million. This upside resulted from a 10% increase in average realized silver
price and lower cost of sales and depletion, depreciation and amortization due
to the temporary suspension of lower margin mines.”
Most recently, on May 21st, Silvercorp Metals
Inc. (TSX: SVM.TO) (NYSE American: SVM) reported its financial and operating results for the
fourth quarter and twelve months ended March 31, 2020.
From the news release: “Despite the
extended shut-down during the three months ended March 31, 2020 (“Q4 Fiscal
2020”) due to COVID-19, the Company was able to achieve full year production
target, surpassing its Fiscal 2020 guidance. As reported in the Company’s news
release dated May 7, 2020, the Company’s operations were ramped up to full
capacity in March 2020 with no employee infection and the Company is in full
compliance with government measures to prevent spread of COVID-19.”
Following the
earnings report, Zacks Research noted, “Silvercorp (SVM)
came out with quarterly earnings of $0.02 per share, beating the Zacks
Consensus Estimate of a loss of $0.01 per share. This compares to earnings of
$0.03 per share a year ago. These figures are adjusted for non-recurring
items.”
“This quarterly
report represents an earnings surprise of 300%. A quarter ago, it was expected
that this mineral miner would post earnings of $0.06 per share when it actually
produced earnings of $0.04, delivering a surprise of -33.33%.”
Pan American Silver
Corp. (NASDAQ: PAAS) (TSX: PAAS.TO) reported its unaudited results for the first quarter
ended March 31, 2020 ("Q1 2020") on May 6th.
"The COVID-19
pandemic escalated quickly over Q1 2020. Pan American took immediate steps to
protect the health and safety of our people, and mobilized our business
continuity plans. We are also providing support to our local communities during
this very difficult time. In addition to our existing community programs, we
are donating $2 million in food and hygiene supplies, as well as facilitating
access to health care," said Michael Steinmann, President and Chief
Executive Officer.
Added Mr. Steinmann:
"Cash flow generation of $114.1 million in Q1 reflects the Company's
strong operating performance before the impact of the COVID-19 related mine
suspensions. However, earnings in the period were significantly impacted by
non-cash, mark-to-market investment losses and non-cash tax expense due to
COVID-19 related currency devaluations. We have a strong balance sheet with
approximately $479 million of total available liquidity, and we have taken
steps to defer or reduce non-essential expenditures to preserve our financial
strength. Many of the temporary COVID-19 related suspensions are now being
lifted, and we are preparing to restart those operations. Profit margins should
benefit from the improvement in gold prices combined with lower costs due to
currency devaluations in our operating jurisdictions."
Also realizing the
importance of attracting ESG investor acceptance and participation, in their
May 8th sustainability report, Pan American Silver (NASDAQ:PAAS) (TSX: PAAS.TO), announced, “ESG Call - Save the Date: Pan American is
planning to host a call to discuss its sustainability strategy and practices,
including its performance on ESG factors. The call is scheduled for September
14, 2020.”
Coeur Mining (NYSE:CDE) announced its responsibility report at the end of
April noting, “We strive to integrate our ESG principles at every level of our
business – from our Board of Directors to our frontline employees and
contractors,” said Mitchell J. Krebs, President and Chief Executive
Officer.“Publishing our Responsibility Report validates our goal of increased
transparency and accountability for our sustainability objectives. It is
imperative that we uphold our core values of Protecting our people, places and
planet, Developing quality resources, growth and plans, and Delivering
impactful results through teamwork. We plan to continue aligning our goals of
maximizing long-term stakeholder value with our strategy of safely and
responsibly discovering, developing and operating a balanced portfolio of
quality precious metals assets.”
Looking at the future of silver miners and mining and
metals stocks in general, adopting an ESG policy might invite a whole new generation
of investors to the sector.
Blackrock set the bar for ESG standards for the sector and now
reports, “Companies with strong profiles on material sustainability issues have
potential to outperform those with poor profiles. In particular, we believe
companies managed with a focus on sustainability should be better positioned
versus their less sustainable peers to weather adverse conditions while still benefiting
from positive market environments.”
First Majestic Silver Corp. (NYSE: AG) (TSX:
FR.TO), in addition to building out revenue
and profitability for its shareholders, also recognizes the importance of ESG
to its investors. “One of our core values-and a key building block of First
Majestic’s vision-is to work towards sustainability through exceptional
corporate citizenship. We know that operational excellence goes beyond the
return to our shareholders; it considers the well-being of our employees and
their families, the communities where we work and the impact on our environment
while respecting the fundamental human rights, cultures, customs and values of
our employees and communities. First Majestic is committed to socially
responsible mining: working safely, ethically and with integrity, taking
responsibility for our impacts on the environment and the communities where we
operate, and contributing to local sustainable development. We recognize that
integrating responsible practices into our management systems and standards
across the Company is essential to ensure the long-term prosperity of our business.”
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