Gold has been making all-time highs, reaching an all-time high of $2,430 per ounce on Apr. 12, 2024. The latest surge stems from tensions in the Middle East (as warnings of an imminent attack on Israel by Iran make headlines), the growing U.S. debt, and recent economic reports showing an uptick in inflation. This surge has shot up shares of Gold ETFs and gold miners driven by the fear of missing (FOMO).
If you missed the gold rush, take a step back and look at some silver stocks, gold's distant cousin. Silver is still nowhere near its all-time highs, and is starting to move into these basic materials sector stocks.
Pan American Silver Co.
Pan American Silver Co. (NYSE: PAAS) is one of the first stocks that come to mind when looking to invest in silver. The company explores, develops and operates silver mines throughout the Americas, Peru, Argentina, Canada and Bolivia. Pan American supplies raw silver to a diversified group of industries.
The company mined 4.8 million ounces of silver in Q4 2023 and a total of 20.4 million ounces in 2023. Revenues hit a record $669.6 million in Q4 2023, with full-year 2023 revenues hitting $2.3 billion. The company still lost $67.8 million or 19 cents per share in Q4 and 32 cents per share or $104.9 million in 2023.
Silver Costs Increases Led to Shortfalls
Silver segment costs were $19.31 and $13.07 per ounce in Q4 2023. Silver Segment all-in sustaining costs (AISC) were $26.55 and $18.17 per ounce, respectively, in Q4 and full-year 2023. These higher costs were attributed to an increase in underground mine developments in Huaron and a ventilation-driven production shortfall at La Colorada. Some of the costs were offset by lower-than-expected costs at Cerro Moro stemming from higher throughput, higher gold prices and cost-cutting initiatives.
Gold Mining too
While the company name says silver, it also mines gold. Pan American finalized its purchase of Yamana Gold Inc. in Q4, where it mined 267.8 ounces of gold. For the full year 2023, Pan American mined a total of 882.9 thousand ounces of gold.
Weekly Descending Triangle
The weekly candlestick chart for PAAS illustrates a descending triangle pattern. The descending (falling) trendline emerged at $29.01 on Apr. 18, 2022. Shares tumbled to a low of $12.93, which became the flat-bottom lower trendline. PAAS continued to chop, making lower highs but holding the flat-bottom lower horizontal trendline at $12.93. Shares seemed to break out when they fell to $12.10 in February 2024, but they slingshot back up and through the descending trendline resistance at $15.19 on Mar. 25, 2024, to spike to a swing high of $20.60. The daily relative strength index (RSI) rose towards the 70-band. Pullback support levels are at $17.06, $15.73, $14.19 and $12.93.
Pan American Silver Co. analyst ratings and price targets are at MarketBeat.
Fortuna Silver Mines
Canada-based Fortuna Silver Mines Inc. (NYSE: FSM) owns and operates silver and precious metals mines in Latin America and West Africa, specifically in Argentina, Peru, Mexico, the Ivory Coast and Burkina Faso. Some of these areas are prone to geopolitical risk, which actually tends to have a bullish effect due to the perceived shortage of supply, much like oil prices during a geopolitical threat.
Demand Driven by Industries
The clean and renewable energy movement is also a driving force for rising silver prices. Electric vehicles (EVs), solar panels and batteries are just three components that use silver. EVs contain 25 to 50 grams of silver due to its excellent thermal and electrical conductivity. Hybrid cars use 18 grams to 34 grams of silver per light vehicle. Silver is also used in medicine, jewelry, water purification, flat-screen TVs, electronics and photography.
Mining Silver But Bleeding Red
Fortuna reported a Q4 2023 EPS loss of 30 cents for a net loss of $92.3 million, which includes a $90.6 million non-cash impairment charge. Full-year 2023 losses were $50.8 million. The company repaid $41 million of its corporate credit facility. Silver production was 1.34 ounces in Q4 2023 and 5.88 million ounces for full-year 2023. Fortuna initiated a 45,000-meter drill program in Senegal at its recently acquired Diamba Sud project. Preliminary Economic Assessment (PEA) will be produced by the end of the year.
Fortuna Mines Gold Also
Fortuna mined 136,143 ounces of gold in Q4 2023 and hit record production of 452,389 ounces in full-year 2023. Consolidated cash per gold equivalent ounce was $840 in Q4 2023 and $874 for the full year. Consolidated AISC per gold equivalent ounce was $1,509 in Q4 and $1,508 for the full year 2023.
Fortuna CEO Jorge Ganoza said, "For 2024, our capital allocation priorities continue to be centered on providing maximum balance sheet flexibility through further debt reduction and funding of aggressive organic growth programs with approximately 200,000 meters of exploration drilling planned across the portfolio. The Dicamba Sud project in Senegal and the Séguéla Mine in Côte d'Ivoire are priorities for our exploration programs during the year."
Weekly Symmetrical Triangle
The weekly candlestick chart for FSM illustrates a symmetrical triangle pattern. A symmetrical triangle pattern comprises a falling (descending) upper trendline, which commenced at $4.68 on Mar. 14, 2022, and a rising (ascending) lower trendline, which commenced at $2.05 on Oct. 3, 2022. The trendlines meet at the apex point where the stock will eventually break out through the upper or break down below the lower trendline. The weekly RSI peaked to stall just under the 70-band. Pullback support levels are at $4.20, $3.74, $3.22 and $2.63.
Fortuna Silver Mines analyst ratings and price targets are at MarketBeat.