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Which Silver Miners Look Attractive after 1Q17 Results?

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Which Silver Miners Look Attractive after 1Q17 Results? PART 1 OF 13

Silver and Its Miners: How Are They Doing 5 Months into 2017?

Silver versus gold

Silver has lost more of its previous gains in the last month. After rising 16.0% through April 13, 2017, silver has risen only 8.5% as of May 26, 2017. Year-to-date (or YTD), gold has slightly outperformed silver. As of May 26, gold prices (GLD) have risen 9.9%, while silver prices (SLV) have risen 8.5%.

Silver and Its Miners: How Are They Doing 5 Months into 2017?

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Precious metals usually perform better in a volatile atmosphere. Market volatility (VIXY) (VXZ) has been trending downward since the beginning of 2017. Despite falling volatility, silver prices have been slowly trending upward.

Silver miners’ 1Q17 results and price performances

The performances of silver and silver miners’ stocks have continued to diverge YTD due to company-specific factors. Tahoe Resources (TAHO) is the only silver miner that has fallen YTD by 2.0%. Its stock is under pressure after giving disappointing guidance on January 5, 2017. The guidance was lower than expected for production, whereas its costs and capex (capital expenditure) were on the high side.

Pan American Silver (PAAS) has risen the most at 17.5%. The company’s outperformance is mainly due to its positive outlook for 2017 and beyond for production growth and cost reduction.

Hecla Mining (HL) followed with a rise of 15.3%. First Majestic Silver (AG) and Coeur Mining (CDE) showed YTD rises of 14.2% and 9.2%, respectively.

What’s in this series?

In this series, we’ll look at the factors that are affecting precious metal miners, including cost positions, cost reduction progress, production growth outlook, and debt metrics. Finally, we’ll see how these factors have affected stock performances. We’ll also see which stocks are more levered to changes in precious metal prices. Let’s start by looking at silver miners’ production growth and outlook.

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