Following a violent correction in the Silver Miners Index (SIL) year-to-date, many investors are hunting for deals in the sector.
While the silver producers offer very nice leverage to the metal, given that their margins can increase rapidly as the price of silver increases, not all of them are created equal. This is why holding the best names when selecting which ones to purchase to complement one’s portfolio is essential.
In this update, we’ll look at SilverCrest Metals (SILV) and First Majestic (AG) and see which one is the better selection for one’s portfolio:
Size & Jurisdictions
Regarding size, First Majestic is a much larger producer, on track to produce more than 33MM silver-equivalent ounces this year, making it one of the largest silver producers sector-wide. The company also benefits from diversification, owning three mines (San Dimas, Santa Elena, and La Encantada) in Mexico and a gold mine in the #1 mining jurisdiction: Nevada.
This compares favorably to SilverCrest Metals (“SilverCrest”), which owns just one mine in Mexico that is ramping up towards commercial production, and will produce just 12.0MM silver-equivalent ounces in 2023. So, with a lack of diversification (1 mine vs. 4), a slightly less attractive jurisdictional profile (no production from Tier-1 ranked jurisdictions), and a smaller production profile, First Majestic Silver wins by a wide margin in this category.
First Majestic - 1 / SilverCrest - 0 Continue reading "Which Is The Better Silver Mining Stock?"
