Silver Miners’ Q2’19 Fundamentals
http://www.zealllc.com/2019/smq219fn.htm
Adam Hamilton, 30th August 2019
Only 3 of SIL’s top-17 component stocks were still primary silver miners last quarter, First Majestic Silver, Silvercorp Metals, and Fortuna Silver Mines.
That means the silver miners faced no existential threat last quarter despite its terrible silver prices. The reason cash costs soared is because Hecla Mining and Silvercorp Metals both reported negative cash costs in Q2’18 due to big byproduct credits. Excluding them, the comparable cash costs a year ago ran $6.49 which is much closer to last quarter’s levels. The silver miners are doing well holding the line on costs.
Way more important than cash costs are the far-superior all-in sustaining costs. They were introduced by the World Gold Council in June 2013 to give investors a much-better understanding of what it really costs to maintain silver mines as ongoing concerns. AISCs include all direct cash costs, but then add on everything else that is necessary to maintain and replenish operations at current silver-production levels.
Industry-wide all-in sustaining costs don’t change much regardless of prevailing silver prices. That is because they are largely determined during mine-planning stages, when engineers and geologists decide which ores to mine, how to dig to them, and how to process them to extract the silver. So higher silver prices yield explosive profits growth, which is what makes the volatile silver-mining stocks so alluring to traders.
----
Silver’s last major upleg erupted in essentially the first half of 2016, when silver soared 50.2% higher on a parallel 29.9% gold upleg.
---------
The purest major silver miner First Majestic’s stock was a moonshot, skyrocketing a staggering 633.9% higher in that same short span! SIL’s gains are muted.
-------------
Spalte -- Sil. % -- ist Silberanteil in Prozent an der Gesamtproduktion
oder Silberanteil am Gesamteinkommen (das muss ich nochmal herausfinden)
Ergänzung zur Spalte-6 --> Sil. %
So the next column reveals how pure these elite silver miners are, approximating their percentages of Q2’19 revenues actually derived from silver.
SVM = 60,5%
[Blockierte Grafik: http://www.zealllc.com/c2019/Zeal083019A.gif]
------
