Retail investors piled into physical silver at the beginning of the year, causing a ‘silver squeeze.’ Silver prices have remained below $24 per troy ounce lately, but according to Coin Price Forecast, the white metal’s price is expected to hit $30 by the middle of 2024 and $40 by the middle of 2025.
The consumer price index increased 5.4% in July, and the International Monetary Fund (IMF) warned that inflation could be persistent. This should drive the safe-haven demand for precious metals. In addition, silver is seeing rising demand from electronics manufacturers and the auto industry.
So, we think it could be wise to look into Canada-based silver mining stocks Fortuna Silver Mines Inc. (FSM), Silvercorp Metals Inc. (SVM), Avino Silver & Gold Mines Ltd. (ASM), and Great Panther Mining Limited (GPL). Wall Street analysts expect these stocks to rally significantly in the near term.
Click here to check out our Gold and Silver Industry Report for 2021
Fortuna Silver Mines Inc. (FSM)
FSM explores for, extracts, and processes precious and base metal deposits in Latin America. Its principal properties include the Caylloma silver, lead, and zinc mine located in southern Peru; the San Jose silver and gold mine in southern Mexico; and the Lindero gold project in Argentina. FSM is based in Vancouver, Canada.
On July 2, 2021, FSM and Roxgold completed a business combination to create a global premier growth-oriented intermediate gold and silver producer. Jorge A. Ganoza, FSM’s President and CEO, said, “The company will benefit from a robust exploration pipeline and expanded presence in the Americas and West Africa.”
The company’s sales increased 171% year-over-year to $120.50 million for the second quarter, ended June 30, 2021. Its adjusted EBITDA grew 484% year-over-year to $54.90 million, while its net income came in at $21.50 million versus a $5.10 million net loss in the prior-year period. In addition, the company’s FCF from ongoing operations increased 9,150% year-over-year to $18.50 million.
Analysts expect FSM’s EPS and revenue to increase 255.5% and 128.9%, respectively, year-over-year to $0.61 and $638.63 million in its fiscal year 2021. In addition, it surpassed the consensus EPS estimates in three of the trailing four quarters. Wall Street analysts expect the stock to hit $6.25 in price the near term, which indicates a potential 48.5% upside.
Silvercorp Metals Inc. (SVM)
SVM in Vancouver, Canada, acquires, explores for, develops, and mines mineral properties in China and Mexico. The company explores for silver, gold, lead, and zinc metals primarily. Its flagship property, the Ying silver-lead-zinc project, is in the Ying Mining District in Henan Province, China.
SVM announced a share repurchase program on August 25 that will run from August 27, 2021, to August 26, 2021. The program is expected to provide it with enhanced flexibility.
The company’s revenue increased 26% year-over-year to $58.80 million for the first quarter, ended June 30, 2021. Its income from mine operations grew 32% year-over-year to $25.50 million. SVM’s adjusted earnings came in at $15.80 million, up 64.6% year-over-year. In addition, the company’s adjusted EPS increased 80% year-over-year to $0.09.
For the quarter ending December 31, 2021, analysts expect SVM’s EPS and revenue to increase 77.8% and 13.3%, respectively, year-over-year to $0.08 and $60.40 million. In addition, Wall Street analysts expect the stock to hit $7.63 in the near term, indicating a potential 83.4% upside.
Avino Silver & Gold Mines Ltd. (ASM)
ASM acquires, explores for, and advances mineral properties in Canada. It explores for primarily silver, gold, and copper deposits. The Vancouver, Canada-based company has interests in 42 mineral claims and four leased mineral claims, including Avino mine area property, which comprises four concessions covering 154.4 hectares.
ASM announced on August 3, 2021, that mining operations have restarted at its Avino Mine. David Wolfin, the company’s President and CEO, said, “With the current higher metal prices, we look forward to generating positive cash flow again. As one of the main employers in the area, the restart of operations will play a critical role for the local communities."
The company’s working capital increased 120% year-over-year to $30.42 million for the second quarter, ended June 30, 2021. ASM’s cash came in at $26.81 million, up 158% year-over-year. In addition, the company’s debt liabilities have been reduced by $1.70 million since the beginning of the year.
The company’s EPS is expected to increase 366.7% year-over-year to $0.16 in its fiscal year 2021. ASM’s revenue is expected to increase 1,244.2% year-over-year to $18.86 million for the quarter ending December 31, 2021. The stock has gained 12.2% over the past nine months to close yesterday’s trading session at $1.01. Wall Street analysts expect the stock to hit $1.50 in the near term, which indicates a potential 48.5% upside.
Great Panther Mining Limited (GPL)
GPL in Vancouver, Canada, is a precious metals mining and exploration company. It explores for gold, silver, copper, lead, and zinc ores. The company operates three mines, including the Tucano gold mine in Amapá State, Brazil, and two mines in Mexico, the Guanajuato mine complex, and the Topia mine in Mexico.
On July 22, 2021, GPL announced drill results for the Urucum North deposit located at its wholly owned Tucano mine in Brazil. Rob Henderson, the company’s President & CEO, said, “We are very excited with the exploration results we are seeing from Tucano, which demonstrate the potential for additional near-term gold production.”
The company’s networking capital increased 43% year-over-year to $9.77 million for the second quarter ended June 30, 2021. GPL’s borrowings came in at $26.32 million, down 45.5% year-over-year.
GPL’s EPS and revenue are expected to increase 200% and 38.8%, respectively, year-over-year to $0.22 and $342.72 million in its fiscal year 2022. Wall Street analysts expect the stock to hit $1.80 in the near term, indicating a potential 268.2% upside.
Click here to check out our Gold and Silver Industry Report for 2021
FSM shares were trading at $4.16 per share on Wednesday morning, down $0.05 (-1.19%). Year-to-date, FSM has declined -49.51%, versus a 20.88% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.
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