SILVER STOCKS NEWS – Silver stocks advanced Tuesday as the Global X Silvers Miners ETF (SIL) climbed $0.68, or 3.1%, to $22.72 per share in morning trading. The SIL – an ETF of the world’s largest silver stocks – moved higher alongside COMEX silver futures, which jumped $1.31, or 4.5%, to $30.09 per ounce. Silver was boosted by weakness in the U.S. dollar and broad-based gains in the commodities complex.
Silver stocks have enjoyed a considerable rebound thus far in 2012 after a particularly difficult 2011. Last year the SIL tumbled 22.0%, but has already climbed 7.6% this month. The rally in silver stocks has come as many mining companies begin to report fourth quarter 2011 production results.
This morning, Endeavor Silver (EXK) announced record quarterly silver production of 1.1 million ounces, a 25% increase over the fourth quarter of 2010. Furthermore, Endeavour reported its seventh consecutive year of production growth and surpassed its forecast of 3.7 million ounces. In Tuesday morning trading, EXK climbed 3.4% to $10.74 per share.
Another member of the silver stocks sector in the news this morning was Mines Management (MGN). The Company announced the signing of a letter of intent (LOI) with Estrella Gold Corp. for an option to acquire up to 75% of the La Estrella gold and silver project. La Estrella is located in central Peru approximately 230 kilometers southeast of Lima, and represents Mines Management’s first asset outside of the United States. Shares of MGN rose 3.3% to $2.01 in morning trading.
Yesterday Coeur d’Alene Mines (CDE) made headlines after BMO Capital Markets downgraded the silver producer to Market Perform from Outperform and lowered its price target to $32.50 from $35.00. The firm attributed a considerable portion of the downgrade to the decline in silver prices during the fourth quarter of 2011. Most of the bad news appeared to have been already priced in, however, as CDE fell just 0.5% yesterday and surged 4.6% to $26.69 on Tuesday.
Other notable silver stocks moving higher this morning included SIL components Pan American Silver (PAAS), Silver Standard Resources (SSRI), and Silver Wheaton (SLW). PAAS advanced by 2.7% to $22.97, SSRI by 5.3% to $15.63, and SLW by 3.8% to $31.34 per share.
Mines Management Expands into Peru
La Estrella is in an area of established infrastructure, with roads and electricity, and lies within 30 km of Minera Buenaventura's historic Julcani Silver Mine which began operation in 1955. Estrella Gold has established and maintained constructive community agreements with all stakeholder communities, and the property is already fully permitted for additional drilling. Full Mines Manegement Press Release.
- The terms of the LOI allow Mines Management through its subsidiary, Minera Montanore Peru, SAC, to earn 75% of the La Estrella project by expending $5 million over four years on exploration activities
- The LOI allows MGN to conduct a period of additional exclusive due diligence until March 1, 2012, during which time definitive agreements are expected to be negotiated and executed
- La Estrella is an advanced exploration stage project which contains an epithermal, volcanic-hosted gold-silver system with associated base-metal mineralization extending over a strike length of at least 1,200 meters