SILVER STOCKS NEWS – Silver stocks rallied Tuesday as the Global X Silver Miners (SIL) surged $0.85, or 4.1%, to $21.40 per share in morning trading. Strength in the SIL – comprised of many of the world’s largest silver stocks – was fueled by a broad-based rally on Wall Street. COMEX silver futures climbed $0.54, or 1.9%, to $29.42 per ounce as nearly all commodities posted substantial gains as well. The iShares Silver Trust (SLV), a proxy for the silver price and the world’s largest silver ETF, jumped $0.71, or 2.5%, to $28.67 per share.
Despite today’s rally in silver stocks, however, the sector remains substantially lower this year. The SIL is now down 7.8% in December and 21.1% on a year-to-date basis. This compares quite unfavorably to the price of silver as well, which has fallen just 4.6% in 2011.
One of the worst performing silver stocks this year is also one of the largest components of the SIL – Silver Standard Resources (SSRI). Shares of SSRI have plunged 52.3% due primarily to operational challenges at its Pirquitas Mine in Argentina. In April of this year, the ball mill was shut down due to a faulty gearbox and later rebuilt with new parts. In September, the Company shut down the ball mill yet again due to difficulties with the gear box. Silver Standard subsequently lowered its full-year production guidance to 7.3-7.6 million ounces from 8.5 million ounces. Although production at Pirquitas resumed in November, Silver Standard later that month released an updated reserve and resource estimate on the mine that was considerably lower than the previous estimate.
For the first time in several months, however, Silver Standard Resources was in the news for a positive reason this past week when Global Hunter Securities analyst Jeff Wright initiated coverage of the Canadian-based silver miner with an Accumulate rating and $23.00 price target. In its report, the firm wrote that “After a challenging 2011, Silver Standard enters 2012 with the ability to hit the ‘reset’ button and once again fulfill its potential to investors, in our opinion.”
Global Hunter went on to say that “We believe the current equity valuation reflects a disproportionate discount to not only future production but also the amount of silver the company possesses. We believe the company is poised to execute on increasing production in 2012 and 2013 to regain investor and market confidence recently In spite of the operational setbacks.
SSRI was one of the best performing silver stocks on Tuesday, as it climbed $0.65, or 5.0%, to $13.58 in late morning trading. Other notable advancers included SIL components Coeur d’Alene Mines (CDE), Pan American Silver (PAAS), and Silver Wheaton (SLW). CDE rose by 6.2% to $25.85 per share, PAAS by 4.5% to $22.35 per share, and SLW by 4.8% to $29.61 per share.
Mines Mangement Achieves “Significant Milestone” in Third Quarter
- The U.S. Forest Service and the Montana Department of Environmental Quality continued their environmental review of the Montanore Project and the responses to comments received from the public and from the Environmental Protection Agency and issued the Supplemental Draft EIS in late September 2011
- Mines Management continued meetings with federal and state agencies, Montana legislators, local Lincoln County Commissioners, Libby City officials, business leaders and community members and kept them informed of the project status
- Cash and investment position remained strong at $20.5 million as of September 30, 2011
- The Company`s exploration and corporate development team continued to examine and evaluate additional opportunities in North America and Latin America