Follow the Money with Silver Miners ; Recent Performance Shows Silver is on a Winning Streak
"As we go green, we need more silver" - First Majestic Silver Corp.
Point Roberts, Washington and Delta, British Columbia--(Newsfile Corp. - May 28, 2020) - Investor Ideas, a global investor news source covering mining and metals stocks releases a sector snapshot on silver stocks featuring First Majestic Silver Corp. (NYSE: AG) (TSX: FR).
Read the full article looking at recent earnings and news from silver stocks :
On May 15th Motley Fool reported :"Silver stocks have been making headlines with some significant single day runs in the double digits. "
But this is not a one day wonder when you look at some of the recent trends and performances.
Looking at the why, some key points noted by First Majestic Silver Corp. (NYSE: AG) (TSX: FR) in their most recent investor presentation; "Over the past 10 years, the silver industry has been in a 500M ounce physical deficit, and the current silver to gold mine supply ratio is 8:1."
Another key trend driving silver that fits into the growing ESG investing movement; First Majestic Silver notes that, "As we go green we need more silver."
On May 14th First Majestic Silver Corp. (NYSE: AG) (TSX: FR) announced their unaudited interim consolidated financial results of the Company for the first quarter ended March 31, 2020.
Key highlights included:
Revenues generated in the first quarter totaled $86.1 million compared to $86.8 million in the first quarter of 2019. Due to the volatile decline in silver and gold prices near the end of the quarter, the Company decided to withhold pricing on approximately 292,000 ounces of shipped silver and 700 ounces of shipped gold and retained those ounces in its finished goods inventory. Had these ounces been sold at the end of the quarter, it would have contributed an additional $5.3 million to revenues based on spot metal prices.
The Company reported mine operating earnings of $21.1 million compared to $10.3 million in the first quarter of 2019. The increase in mine operating earnings in the quarter was attributed to a 10% increase in average realized silver price and lower cost of sales and depletion, depreciation and amortization due to the temporary suspension of lower margin mines.
From the news release - "As the COVID-19 pandemic sparked higher than normal volatility in the metals market near the end of the quarter, we temporarily suspended our silver and gold sales as paper prices dropped significantly below true physical prices," stated Keith Neumeyer, President and CEO of First Majestic. "These inventoried ounces have been carried over into the second quarter and will be sold as prices improve. Nevertheless, strong production from each of our three mines generated operating earnings of $21.1 million, representing a 106% increase over the same quarter of 2019."
Looking at the company's recent earnings report, Zacks Research said, "Shares of the company have gained 45.4% over the past year, outperforming the industry's growth of 15.5%."
Continued: "First Majestic reported mine-operating earnings of $21.1 million in the March-end quarter compared with the year-ago quarter's $10.3 million. This upside resulted from a 10% increase in average realized silver price and lower cost of sales and depletion, depreciation and amortization due to the temporary suspension of lower margin mines."
Looking at the future of silver miners and mining and metals stocks in general, adopting an ESG policy might invite a whole new generation of investors to the sector.
Blackrock set the bar for ESG standards for the sector and now reports, "Companies with strong profiles on material sustainability issues have potential to outperform those with poor profiles. In particular, we believe companies managed with a focus on sustainability should be better positioned versus their less sustainable peers to weather adverse conditions while still benefiting from positive market environments."
First Majestic Silver Corp. (NYSE: AG) (TSX: FR), in addition to building out revenue and profitability for its shareholders, also recognizes the importance of ESG to its investors. "One of our core values-and a key building block of First Majestic's vision-is to work towards sustainability through exceptional corporate citizenship. We know that operational excellence goes beyond the return to our shareholders; it considers the well-being of our employees and their families, the communities where we work and the impact on our environment while respecting the fundamental human rights, cultures, customs and values of our employees and communities. First Majestic is committed to socially responsible mining: working safely, ethically and with integrity, taking responsibility for our impacts on the environment and the communities where we operate, and contributing to local sustainable development. We recognize that integrating responsible practices into our management systems and standards across the Company is essential to ensure the long-term prosperity of our business."
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