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The prospects for the Zacks Mining - Silver industry look promising, driven by rising silver prices. Global industrial demand for silver is expected to account for a major part of the total demand, which is projected at around 1.15 billion ounces. However, supply is expected to be lower, suggesting that the silver market is headed for a fifth consecutive year of deficit, which would likely bolster prices.

We suggest keeping tabs on companies like Fresnillo (FNLPF - Free Report), Endeavour Silver Corporation (EXK - Free Report), and Avino Silver & Gold Mines Ltd. (ASM - Free Report), which are poised to benefit from solid projects, improved operational efficiency, and disciplined cost management.

About the Industry

The Zacks Mining - Silver industry comprises companies that are engaged in the exploration, development, and production of silver. These include big and small players operating mines of widely varying types and scales. Silver-bearing ores are mined by open-pit or underground methods, and then crushed and ground.

Miners continually look for opportunities to expand their reserves and resources through targeted near-mine exploration and business development. They strive to upgrade and improve the quality of their existing assets, internally, and through acquisitions.

Only 20% of silver comes from mining activities, wherein silver is the primary revenue source. The balance comes from projects, wherein silver is a by-product of mining other metals, such as copper, lead, and zinc. Thus, several companies in the silver mining industry are engaged in mining other metals as well.

What's Shaping the Future of the Mining-Silver Industry

Demand to Remain Strong: Per the Silver Institute, total silver demand is expected to dip 1% to 1.148 billion ounces in 2025. Industrial use remains the largest component of silver demand and is projected to be around 677.4 million ounces in 2025, accounting for roughly 59% of the total demand. One of the main drivers is the solar energy industry.

Usage of silver in photovoltaic applications has soared over recent years due to the increasing global adoption of solar technology, advances in solar cell design, and the global push for renewable energy. Silver plays a crucial role in solar cells due to its unmatched electrical conductivity.

Silver demand in electrical and electronic applications remains supported by rising usage in 5G infrastructure, electric vehicles, and consumer electronics. Silver plays a key role in these areas due to its conductivity, reliability in compact and high-performance components.

Silver coin and net bar demand is expected to gain 7% this year to 204.4 million ounces, recovering after two years of weakness, and particularly the five-year low of 190.9 million ounces in 2024. Demand for jewelry is, however, expected to be down 6%, reflecting low demand amid high prices.

Rising Silver Prices Bode Well: Silver prices gained around 22% in 2024 and 14.9% so far this year. Prices have been supported by several factors, like rising economic and geopolitical uncertainties as well as solid demand amid expectations of a tight supply. Per the Silver Institute, total global silver supply is projected to rise 2% in 2025 to 1.031 billion ounces. The increase in supply will be driven by gains in Mexican output, with smaller contributions from several other countries.

Compared with the projected demand of 1.148 billion ounces, it suggests that the silver market is expected to record another deficit in 2025 (117.6 million ounces) for the fifth consecutive year, which bodes well for prices.

Even though production is expected to be higher on a year-over-year basis in 2025 at 835 million ounces, it is much lower than the 900 million ounces in 2016. This is due to lower ore grades, limited new project development, and operational challenges. This will help boost silver prices in the long run. 

Efforts to Combat Inflationary Costs to Aid Margins: Industry players are facing escalating production costs, including electricity, wages, water, and materials. Mining companies are major consumers of energy, with around 50% of their production costs closely linked to energy prices.

A shortage of skilled workforce spiked wages. With no control over silver prices, the industry must focus on improving its sales volumes while being cost-effective. Players are investing heavily in R&D and resorting to technological innovations required at almost every level of operation to increase efficiency, sustain growth, and rein in costs.

The Zacks Industry Rank Indicates Bright Prospects

The group's Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates bright prospects in the near-term. The Zacks Mining - Silver industry, a nine-stock group within the broader Zacks Basic Materials sector, carries a Zacks Industry Rank #15, which places it in the top 6% of 245 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.

Before we present a few stocks that could be retained in one’s portfolio, it is worth taking a look at the industry’s stock market performance and valuation picture.

The Industry versus the Broader Market

The industry has outperformed the sector but lagged the Zacks S&P 500 composite over the past year.

The stocks in this industry have collectively lost 7.6% in the past year compared with the Basic Material sector’s 9.9% fall. Meanwhile, the Zacks S&P 500 composite has risen 10.1%.

One-Year Price Performance

Image Source: Zacks Investment Research

The Industry's Valuation

Based on the forward 12-month EV/EBITDA ratio, a commonly used multiple for valuing silver-mining companies, we can see that the industry has been trading at 12.05X compared with the S&P 500's 24.69X and the Basic Material sector's forward 12-month EV/EBITDA of 7.63X. This is shown in the charts below.

Enterprise Value/EBITDA (EV/EBITDA) Forward 12-Month Ratio

Image Source: Zacks Investment Research

Enterprise Value/EBITDA (EV/EBITDA) Forward 12-Month Ratio

Image Source: Zacks Investment Research

Over the past five years, the industry has traded as high as 12.97X, as low as 11.82X, and with a median of 12.08X.

3 Mining - Silver Stocks to Watch

Provided below is a quick overview of the previously-mentioned stocks to keep an eye on.

Avino Silver Mines

The company produced 678,458 silver equivalent ounces in the first quarter of 2025, up 8% year-over-year. While silver production increased by 6%, gold output was up by 25% and copper production increased by 19%.

Avino Silver remains on track to achieve its targeted production range of 2.5-2.8 million silver equivalent ounces in 2025. At La Preciosa, underground development has commenced following receipt of necessary approvals. La Preciosa is one of the largest undeveloped silver deposits in both Mexico and the world. Also, its proximity to the Avino mine and infrastructure could yield numerous financial and operational synergies.

This project is expected to play a significant role in the company's target to become an intermediate silver producer in Mexico. Avino Silver also completed the Pre-Feasibility Study for its Oxide Tailings Project at the Avino Mine Operations. This is a milestone in its growth trajectory, as the project is considered one of the company's major growth catalysts. The company’s strong cost-control measures are expected to continue to aid its margins. 

Avino Silver Mines shares have gained 187.9% in the past year. The Zacks Consensus Estimate for this Vancouver, Canada-based company’s 2025 earnings has moved up 85.7% over the past 60 days. The company has a trailing four-quarter earnings surprise of 104.2%, on average. Avino Silver Mines currently sports a Zacks Rank #1 (Strong Buy) rating.

Price Chart: Avino Silver Mines

Image Source: Zacks Investment Research

Fresnillo

The company produced 107 million silver-equivalent ounces in 2024. It expects total production at 91-102 million ounces in 2025. The decline reflects expected lower gold production. This is in line with the company’s strategy to focus on profit margins at the mines, and the lower guidance reflects an adjustment to the mine plan at Herradura, whereby the most profitable gold ounces will be extracted and volumes of waste material moved will decrease.

Simultaneously, the company is advancing its metallurgical and underground mining optimization projects, along with the ongoing analysis of brownfield projects, to further enhance the production platform and cost base for the 2026-2030 period.

It is also progressing with its greenfield projects, Rodeo, Tajitos, Orisyvo, and Guanajuato. Fresnillo's high-quality assets, ample mineral resources, competitive margins, and disciplined approach to development will continue to drive growth. The company's shares have gained 91% in a year's time.

The Zacks Consensus Estimate for Fresnillo’s 2025 earnings has moved up 58% in the past 60 days. The consensus estimate indicates year-over-year growth of 269%. The stock currently carries a Zacks Rank #2 (Buy) rating.

Price Chart: Fresnillo

Image Source: Zacks Investment Research

Endeavour Silver

The company recently entered into an agreement to acquire Compañia Minera Kolpa S.A. for $145 million. With this move, Endeavour Silver will add the promising Kolpa mine located in Peru, taking its tally of producing mines to three and marking its foray in the country. Kolpa is expected to boost Endeavour Silver’s production profile by approximately 5 million silver equivalent ounces. This marks a strategic step in the company’s plan to become a senior silver producer.

Earlier this month, Endeavour Silver commenced wet commissioning activities at its Terronera Project in Mexico, a critical milestone in the lead-up to full-scale production. With Terronera’s projected average annual production of 4 million ounces of silver and 38,000 ounces of gold, it is set to nearly double Endeavor Silver’s current production. The company has five other projects with solid growth opportunities across Mexico, Chile, and the US. Endeavour Silver shares have declined 6.2% in the past year.

The Zacks Consensus Estimate for this Vancouver, Canada-based company’s 2025 earnings has moved up 33.3% over the past 60 days. The estimate indicates year-over-year growth of 567%. The company has a trailing four-quarter earnings surprise of 100%, on average. Endeavour Silver currently sports a Zacks Rank of #2 (Buy).

Price Chart: Endeavour Silver

Image Source: Zacks Investment Research 

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