Canadian platinum, palladium and silver mining stocks are among the junior miners enjoying a boost as investors search for value in a turbulent global market.
While gold continues to forge upwards and the best junior gold stocks have been snapped up by investors this year, silver has outperformed its more lustrous cousin in recent weeks. In particular, analysts this week noted that silver ETFs have outperformed their gold counterparts on both the latest ten-day and one-month basis. Among the silver investments highlighted, Yahoo Finance noted that iShares Silver Trust SLV has jumped 14.2% in ten days and was up more than a fifth in a month. Despite enjoying gains too, even the best gold ETFs have tended to post gains in the single figures on a one-month basis.
Silver production has notoriously been on the decline in recent years as the metal remained relatively unloved, but it may not take long for miners to reverse this trend now it is back in fashion: International analytic company GlobalData has crunched the numbers and predicts that by 2023 silver production will top a billion ounces – it forecasts 1,029 million oz., against 913.5 million oz. in 2019.
Canadian silver mining companies are likely to be at the forefront of that bonanza. In a sign that analysts believe output can increase without weighing on prices over the next few years, Royal Bank of Canada upgraded its rating on one of the continent’s top silver mining stocks this week. Pan American Silver (TSE:PAAS) was upgraded from a “sector perform” rating to “outperform” with a $23.00 target price on the stock, which is headquartered in Vancouver but mines across the Americas.
Platinum and palladium miners are also looking optimistically at recent price trends. As many analysts suggest palladium prices are on course for record highs, Canadian palladium mining stocks are poised to benefit: among the junior mining companies, Generation Mining (CSE: GENM) has just increased its exploration acreage outside the town of Marathon, Ontario, as it assesses the potential for a palladium and copper mine.
Platinum mining in Canada is also facing a rosier outlook than in recent years after the World Platinum Investment Council (WPIC) said resurgent investor demand will drive overall consumption of the metal up 9% this year and lead to a lower surplus. The WPIC, a platinum industry-funded body and uses data from an independent consultancy, cut its estimate of oversupply in the platinum market to 345,000 ounces, from 375,000 ounces three months ago, saying that demand for the metal from investors in exchange-traded funds will offset declines in consumption by jewellers and auto makers.
In its latest quarterly report, the WPIC said: "Unprecedented investment demand in H1'19 of 855,000 ounces (720,000 ounces from increased ETF holdings and 135,000 ounces from bar and coin purchases) supports a conservative investment demand forecast for 2019 of 905,000 ounces."
Among the Canadian gold stocks, Vancouver-based bullion producer Eldorado Gold (TSX:ELD) this week upgraded its assessment of its Lamaque mine in Quebec. The company said that its latest exploration programme had revealed high grade mineralization beyond the 2018 resource model in the lower portion of the deposit, as well as more ore clusters.
Eldorado, which kicked off commercial production at Lamaque at the end of March, said that surface exploration drilling at the property has focused on better defining the resource potential in the less-explored lower portion of the newly discovered Triangle gold deposit.