SILVER PRICE NEWS – The silver price traded slightly lower in the morning session, but well off its earlier lows with the iShares Silver Trust ETF (SLV), a unit trust which holds physical silver, easing $0.04 to $18.66 per share. Silver stocks were also trading in negative territory with the PHLX Gold & Silver Index (XAU) slipping 0.35 to 183.79.
Although the price action in the thin markets of late summer can sometimes be questionable, the movement in the silver price over the last four weeks cannot be easily dismissed. Since closing at a six-week low of $17.16 on July 28, the SLV has rallied 9.0% through last Friday, settling at $18.70 per share. Investor concerns over industrial demand for the metal have seemingly been outweighed by investment demand from those seeking protection from macroeconomic headwinds.
Silver stocks have similarly exhibited significant relative strength over this period. In particular, Fortuna Silver Mines (FVI.TSX) has gained 22.6% in August and is trading higher in the current session by C$0.07 to C$2.53 per share after the company reported positive drilling results from its Caylloma Mine in southern Peru.
The drill results released today were from the Don Luis II vein in the western portion of the Caylloma district, in an area where no previous development or mining has taken place. Highlights of the results included intersections of 816 grams per tonne (g/t) of silver and 0.27 g/t of gold over 3.05 meters (m) from 148.75m, as well as 864 g/t of silver and 0.07 g/t of gold over 0.50m from 93.30m. Fortuna Silver Mines stated that full results are currently being compiled and interpreted.
Twelve diamond drill holes comprising 2,283 meters have been completed to test the vein from near surface to approximately 200 meter depth. The vein outcrops over a strike length of approximately 400 meters and ranges from approximately 1 to 3 meters in width at the surface. Mineralization is open to depth and Fortuna plans further drilling to test for favorable structural environments.
Earlier this month Fortuna reported a 5% increase in silver production for the second quarter to 470,310 ounces and net income for the quarter of $5.98 million, reversing a year-earlier loss of $1.2 million. Improvements in output, financial performance and exploration results have driven Fortuna’s stock price higher by 118% in the past 52 weeks.
