Amid the COVID-19 pandemic, we saw a fall in demand for silver as supply chain disruptions crippled the industrial sector. As it accounts for roughly 60% of the global silver consumption this had a severe impact on silver demand and silver prices. Investment interest was the only supporting pillar with the metal gaining on its safe-haven demand.
As businesses resumed and we started seeing signs of economic recovery, silver demand has picked up in industrial, photography, jewelry, and silverware. The Silver Institute anticipates global silver demand to increase 15% year over year to 1.029 billion ounces in 2021. If this happens, it will cross the 1 billion ounces threshold for the first time since 2015. It also expects a deficit in the silver market this year — the first time since 2015.
First Majestic picked up the pace since its acquisition of the Jerritt Canyon Gold mine earlier this year. This enhanced its geographic operating platform with a producing asset in a world-class jurisdiction as Nevada. The company achieved a record 7.3 million silver equivalent ounces in the third quarter of 2021.This 14% increase from the prior quarter cemented its strong performance and contributed to the mining stock of the company appreciating 27% in a year’s time. Expected higher grades will further drive production growth at San Dimas, Jerritt Canyon and Santa Elena in the fourth quarter and into 2022. Investors are advised to hold this mining stock and watch the company’s investments in continued improvements in operating efficiencies play out.
The second mining stock that caught analysts’ eye this week is Hecla Mining. After enhancing its silver-linked dividend for the second time this year, it executed the largest exploration program in its history. Hecla Mining has a diverse asset portfolio in mining friendly jurisdictions with high-reserve grade mines. The company is one of the lowest-cost U.S. silver producers and accounts for about 43% of silver production in the country. It strategic advantage suggests growth of 175% year over year and resulted in the mining stock surging 20% in the past year.
MAG Silver is another silver miner with good prospects It explores for gold, lead, and zinc deposits. The company is currently constructing and developing the surface and underground infrastructure on its high-grade silver Juanicipio project located in the Fresnillo District, Zacatecas State, Mexico. SO far, mining shares of the company have gained 16% over the past year.
With a four-quarter earnings of 29%, on average this silver stock is currently a Buy.