After a year of underperformance, investors may turn to silver again this year. Silver’s price action has suffered in 2021 in part due to supply bottlenecks and significantly rising energy costs. Industrial silver will contribute to the precious metal’s rally in 2022 as some of the supply chain issues are resolved. A shift to more solar power is another key driver that could drive silver prices higher, according to BofA commodity strategists. Analysts remain bullish on silver, saying the precious metal could outperform gold once the bull market kicks off in 2022. Analysts’ price forecast for next year ranges from $24 an ounce to over $30 an ounce, depending on the outlook. The rise in silver price should be beneficial for silver stocks like Summa Silver (TSV:SSRV) (OTCQB:SSVRF), First Majestic Silver (NYSE:AG) (TSX:FR), Coeur Mining Inc (NYSE:CDE), Hecla Mining (NYSE:HL), and McEwen Mining (TSX:MUX) (NYSE:MUX).
Summa Silver (TSXV: SSVR) (OTCQB: SSVRF) is a Canadian junior mining exploration company focused on drilling at its two wholly-owned high-grade silver-gold properties in the United States, the Hughes property in Tonopah, Nevada, and the Mogollon Property in New Mexico.
In December, Summa Silver announced additional high-grade silver and gold drill results on the Hughes property. The mining company intersected 702 g/t silver equivalent over 3.9 m from five holes from the Belmont Mine target (rescue veins) and 4,116 g/t silver equivalent over 0.4 m from two holes from the Murray target.
“In less than two years since founding the Company we have now drilled multiple zones of strong mineralization over 3.5 km at the Hughes Property in Nevada. Additionally, surface exploration has revealed that the property features totally un-tested and high-priority targets, several of which are along immediate trend from one of the most prolific and famous historic silver districts in the US,” said Summa Silver CEO Galen McNamara. “Substantial amounts of drilling are required both here and on our Mogollon Property in 2022 as we drive towards mineral resource estimates. I anticipate that strong mineralization will be intersected regularly as drilling continues.”
Later in December, Summa Silver also provided an update on ongoing drilling on the Mogollon property. The company intersected a 50-meter vein zone with visible mineralization in the first hole. McNamara said that while they did not expect the entire intersection to be high grade, the large area of low sulfidation classic veining in the first hole attests to the prospectivity of the Queen vein and the importance of the mineralization system in general. He added that the hole confirms their modeling of historical mining records and limited exploration drilling of the target, as well as supports the vein’s strong potential along with strike and down dip.
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Silver Companies Reports Positive Exploration Results and Increased Silver Production
First Majestic Silver (NYSE:AG) (TSX:FR) reported on January 18 that fourth-quarter production reached a new quarterly record of 8.6 million silver equivalent ounces, comprising 3.4 million ounces of silver and 67,411 ounces of gold, an increase of 17% compared to the previous quarter. In addition, 2021 production reached a new company record of 26.9 million silver equivalent ounces, comprising 12.8 million ounces of silver and 192,353 ounces of gold, an increase of 32% compared to 2020. In 2022, First Majestic forecasts to produce between 32.2 and 35.8 million silver equivalent ounces, consisting of 12.2 to 13.5 million ounces of silver and 258 000 to 288,000 ounces of gold.
Coeur Mining Inc (NYSE:CDE) record investment in exploration continues to pay off significant results on key assets in Nevada. In December, Coeur Mining announced positive exploration results at Rochester and Crown programs. Collectively, the company has drilled just over a million feet (307,925 meters) of up to 27 active platforms at six different locations in the first ten months of 2021, reflecting a year-over-year increase of approximately 50%. Coeur Mining plans to invest an all-time high of approximately $70 million in exploration this year, nearly 48% more than last year’s exploration record investment.
Hecla Mining Company (NYSE: HL) announced in January its preliminary silver and gold production for the fourth quarter and full-year 2021 and its year-end cash position Silver and gold production came in at 12.9 million ounces and 201,326 ounces, respectively. Hecla Mining had silver equivalent production of 37.6 million ounces and gold equivalent production of 525,531 ounces. The three mines reported strong production with significant production growth at Lucky Friday and Casa Berardi. Lucky Friday silver production increased by 75%, while Casa Berardi increased its gold production by 11%. The company’s cash position at year-end was approximately $210 million with an undrawn credit facility.
McEwen Copper Inc., a subsidiary of McEwen Mining Inc. (NYSE: MUX) (TSX: MUX), provided in December a progress report for the Los Azules copper project in San Juan, Argentina, which began in earnest in July 2021. The two immediate goals are to move Los Azules from its current stage of development (Preliminary Economic Assessment or PEA) to a Pre-Feasibility Study (PFS) and to build a new road, the “Northern Access Road”, which will provide essential year-round access to Los Azules.
As the transition to a greener world is creating new demand for metals like silver, which will boost silver stocks like Summa Silver.
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