SILVER STOCKS NEWS – Silver stocks climbed Friday as the Global X Silver Miners ETF (SIL) advanced 1.8% to $28.50 per share. Strength in silver stocks and the SIL was fueled by a substantial rally in the price of silver, which rallied $1.47, or 3.5%, to $43.05 per ounce.
Gains in silver stocks came as precious metals surged higher following the worse than expected U.S. jobs report. The Labor Department reported this morning that zero nonfarm payrolls were added in August – far below the 68,000 consensus estimate among economists. The disappointing data bolstered precious metals amid speculation that the Federal Reserve may be more likely to implement additional easing measures at its upcoming FOMC meeting.
Several silver stocks and components of the SIL were in the news on Friday, after CIBC analyst Barry Cooper published an extensive report on the precious metals sector. CIBC maintained its silver price forecasts of $40 for 2011, $50 for 2012, and introduced a $52 target for 2013.
“We believe the investment demand for the metal will continue to be strong,” Cooper wrote. He also noted that “silver ETF demand has kept in line with gold ETF demand, supporting our thesis of silver as a precious metal (despite some of its industrial applications.”
Based on Cooper’s outlook, CIBC adjusted its ratings and price targets on several silver stocks, as follows:
Endeavour Silver (EDR.TSX) – maintained Sector Performer rating, target raised to C$16.00 from C$14.00,
First Majestic Silver (FR.TSX) – upgraded to Sector Performer from Sector Underperformer, target raised to C$30.00 from C$24.00
Fortuna Silver Mines (FVI.TSX) – maintained Sector Outperformer rating, target raised to C$9.00 from C$8.00
Hecla Mining (HL) – maintained Sector Underperformer rating, target lowered to C$9.00 from C$9.50
Pan American Silver (PAAS) – maintained Sector Outperformer rating, target lowered to $49.00 from $56.00
Silvercorp Metals (SVM.TSX) – upgraded to Sector Performer from Sector Outperformer, target raised to C$14.00 from C$13.00
Another member of the silver stocks sector in the news was Mines Management (MGN). Roth Capital initiated coverage of the emerging silver company with a Buy rating and $5.00 price target – a 189% premium to Thursday’s closing price of $1.73 per share. MGN was one of the top performing silver stocks on Friday, as it surged as much as 12.1% to $1.94 per share.
Other notable silver stocks moving higher in concert with the SIL included Coeur d’Alene Mines (CDE), Silver Standard Resources (SSRI), and Silver Wheaton (SLW). CDE, SSRI, and SLW climbed 4.1%, 4.3%, and 2.8%, respectively.
Mines Management Started at Buy with $5.00 Price Target
The Company's flagship Montanore silver-copper project in northwestern Montana is one of the ten largest undeveloped silver resources in the world. The project has already undergone extensive engineering and is designed with an initial production capacity of approximately 12,500 tons per day. Montanore contains in-situ mineralization estimated at more than 230 million silver ounces and nearly 2 billion copper pounds.
- In February 2011, Mines Management filed a Technical Report in support of the Preliminary Economic Assessment (PEA) for the Montanore Project in compliance with Canadian National Instrument 43-101.
- The company completed a $15 million common stock offering in April 2011, the proceeds of which will be used for advancement of the permitting process for its Montanore Project, the start of the planned delineation drilling program, and for possible acquisitions and exploration of new mining properties.
- Mine and Quarry Engineering Services finalized the Preliminary Economic Assessment (PEA) of Montanore during the first quarter of 2011, which was prepared to provide guidance on the potential viability of the project and the basis for the continuation of exploration activities.
- The company noted that a Record of Decision (ROD) approving the proposed Mine Plan of Operations could occur in 2012, which would allow exploration and mine development work to commence.