In this piece, we will take a look at the 12 best junior silver mining stocks to buy now. If you want to skip our overview of the mining industry, then you can take a look at the 5 Best Junior Silver Mining Stocks To Buy Now.
The mining industry is essential for proper global economic functioning. Mining, whether it's for petroleum fuels or for metals and minerals, provides the essential raw materials for industrial production, construction, electronics, agriculture, and other crucial sectors.
Within mining, oil and metals play a particularly important role. Oil's role is self-explanatory due to the world's reliance on petroleum fuels for transportation and power generation. Similarly, metals and minerals are used in a variety of industries as they enable industrial firms to make large and small scale engineered products.
One metal that is important in both the finance and engineering industries is silver. While not as lustrous as gold, silver still provides investors with an opportunity to buffer their money against inflation. At the same time, it is also used in a variety of industries such as solar panels and electric vehicles. What this means is that the price of silver - and the revenue of silver companies by extension - depends on global industrial and financial conditions. When the demand for safe haven assets is high and rates are low, silver prices rise. Similarly, when economic conditions are robust and industrial output is booming, silver prices see similar tailwinds.
Looking at this, it's no surprise that silver prices continued to rise as December began. November was a great month for the stock market as investors brought forward their bets for interest rate cuts by the Federal Reserve. This also means a weaker dollar as holding the greenback isn't as lucrative if interest rates are lower. Naturally, this was a boon for gold and silver prices, with silver in particular rising for three consecutive weeks to trade at a six month high of $25.47 per ounce.
Moving over to the industrial uses cases of silver, the metal benefits from high demand from solar panel manufacturers. While copper is widely known for its conductive properties, silver is widely thought to be the best conductor in the world. This makes it suitable for solar panel use, and silver works together with silicon in a solar panel to conduct electricity by carrying the silicon electrons to batteries after they are energized by sunlight hitting the panel.
This crucial use case that sits right at the heart of the world's renewable energy efforts is believed by several quarters to be a strong catalyst for silver demand. While solar panel manufacturers have decreased the amount of silver used per panel due to technological advancements, its electrochemical properties mean that the metal is indispensable when it comes to making the panels. Data shows that the percentage of demand for solar panels as a percentage of total silver demand is expected to grow from 5% in 2014 to nearly triple in percentage terms by the end of this year to 14%. In absolute terms, the amount of silver used in solar panels could grow by a whopping 169% by 2030 to sit at 273 million ounces per gigwatt in 2023.
The impact of this growing demand on silver companies is two fold. For starters, naturally, their market will grow and they will find more areas to sell their products in. However, at the same time, the sector will also have to significantly increase its output to ensure that demand stays in line with supply and does not outpace it. This also means that should they decide to invest heavily in new production sites, then the set up costs to bring mines online can lead to bottom line stress during the period that the mines are being developed and not producing the shiny metal.
To understand the impact that optimizing mines can have on a silver company's production, consider the comments made by the management of Endeavour Silver Corp. (NYSE:EXK) during its latest fiscal quarter earnings call:
While this quarter’s results still put us on track to be within this year’s production guidance range, there’s a little room for setback in Q4. Guanaceví’s production shortfall is due to a number of factors. If you recall, we discussed initiating changes to our mine plan and infrastructure to improve working conditions for our employees by providing better ventilation and improving our water management. To address these conditions, we temporarily changed mine sequencing. This meant mining lower silver and gold grade stopes until we sufficiently address the temperatures and the water in blows lower in our mine. Ultimately, these issues could have been better managed to prevent impacts on production. Simultaneously increased sill development during Q3 to open more stopes further impacted Q3’s mine outlook.
With these details in mind, let's take a look at some top junior silver mining stocks. The notable picks are Hecla Mining Company (NYSE:HL), Hudbay Minerals Inc. (NYSE:HBM), and Coeur Mining, Inc. (NYSE:CDE).
Best Junior Silver Mining Stocks To Buy Now
Aerial shot of a mine entrance, the bedrock of the company's gold and silver extraction.
Our Methodology
To compile our list of the best junior silver mining stocks, we ranked the top 41 constituents of the ETFMG Prime Junior Silver Miners ETF by the number of hedge funds that had bought their shares during Q3 2023. Out of these, the top junior silver mining stocks were chosen.
First Majestic Silver Corp. (NYSE:AG) is a Canadian gold and silver mining company headquartered in Vancouver. Lower output and a suspension at its mines plagued the firm's operations during the third quarter and led to a 20% annual revenue drop.
During the same time period, ten out of the 910 hedge funds profiled by Insider Monkey had held a stake in First Majestic Silver Corp. (NYSE:AG). Paul Marshall and Ian Wace's Marshall Wace LLP is the biggest hedge fund shareholder in our database due to its $6.5 million investment.
Along with Hudbay Minerals Inc. (NYSE:HBM), Hecla Mining Company (NYSE:HL), and Coeur Mining, Inc. (NYSE:CDE), First Majestic Silver Corp. (NYSE:AG) is a top hedge junior silver mining stock pick.
MAG Silver Corp. (NYSE:MAG) is another Vancouver based precious metals mining company. The firm is among the handful in our list with a substantial investment from institutional investors who own more than 52% of the shares and provide credibility to the stock.
By the end of this year's third quarter, 11 out of the 910 hedge funds profiled by Insider Monkey had bought the firm's shares. MAG Silver Corp. (NYSE:MAG)'s largest hedge fund investor is Jean-Marie Eveillard's First Eagle Investment Management as it owns $59 million worth of shares.
Pan American Silver Corp. (NYSE:PAAS) is a diversified metals mining firm with operations all over the American continent. A weak global industrial environment, aided particularly by the Chinese slowdown, has hampered its financials as it has missed analyst EPS estimates in three out of its four latest quarters.
As of September 2023 end, 11 out of the 910 hedge funds polled by Insider Monkey had invested in Pan American Silver Corp. (NYSE:PAAS). David Greenspan's Slate Path Capital owned the biggest stake among these which was worth $76 million.
Seabridge Gold Inc. (NYSE:SA) operates gold and silver mines in the U.S. and in China. The firm scored a win in November 2023 when a state government in Canada refused to cancel a license of its subsidiary in response to a request from a competitor.
Insider Monkey dug through 910 hedge fund portfolios for their Q3 2023 investments and found that 12 were the firm's shareholders. Seabridge Gold Inc. (NYSE:SA)'s largest hedge fund shareholder is David Iben's Kopernik Global Investors since it holds $28.7 million worth of shares.
Ivanhoe Electric Inc. (NYSE:IE) is a Canadian company headquartered in Vancouver, Canada. Even though the firm has missed analyst EPS estimates in all four of its latest quarters, the shares are rated Strong Buy on average and analysts have set an average share price target of $17.
During 2023's September quarter, 12 out of the 910 hedge funds profiled by Insider Monkey had bought Ivanhoe Electric Inc. (NYSE:IE)'s shares.
SilverCrest Metals Inc. (NYSE:SILV) is a gold and silver company headquartered in Canada and with operations in Mexico. Unlike other precious metals companies, the firm's third quarter saw its revenue grow slightly by $1.8 million annually.
Insider Monkey's third quarter of 2023 survey covering 910 hedge funds revealed that 12 were the firm's shareholders. Eric Sprott's Sprott Asset Management was the biggest SilverCrest Metals Inc. (NYSE:SILV) investor due to its $44.6 million stake.
New Gold Inc. (NYSE:NGD) has mining operations in Canada and Mexico. It scored a big win in December 2023 after S&P Dow Jones Indices added the firm to the illustrious S&P/TSX Composite Index.
13 out of the 910 hedge funds profiled by Insider Monkey had bought and owned New Gold Inc. (NYSE:NGD)'s shares during Q3 2023. Out of these, the largest stakeholder was Jim Simons' Renaissance Technologies as it owned $14.1 million worth of shares.
New Gold Inc. (NYSE:NGD), Hecla Mining Company (NYSE:HL), Hudbay Minerals Inc. (NYSE:HBM), and Coeur Mining, Inc. (NYSE:CDE) are some best junior silver mining stocks to buy.
