What Experts Predict For The New Silver Bull Market

Raymond James also covers Endeavour Silver Corp. (EXK); a July 11 report by analyst Chris Thompson noted that Endeavour Silver delivered better-than-expected production results for Q2/16, surpassing Raymond James' estimates by 13%. The stronger metal price environment is changing investment decisions, leading to increased capital spending. "Capital spending across EDR's producing assets is budgeted to increase to $17.4 mln (from $11.3 mln) with a focus on development access to new ore sources," noted Thompson, adding, "At Guanacevi, EDR has made a production decision to develop a new mine at the Santa Cruz Sur orebody for total capital budget of $8.4 mln over 3 years."

The stronger price environment also led Endeavour Silver to reverse a planned production reduction. "Given the improved metal price environment, management has elected to sustain production levels at 1,500 tpd and no longer ramp down to care and maintenance [at El Cubo] by year-end," Thompson commented.

Another company positioned to benefit from an uptick in silver price is Golden Arrow Resources Corp. (GARWF), which recently released an updated resource estimate for its Chinchillas project in Argentina. "The updated resource estimate now also contains a maiden measured resource estimate of 17 million silver-equivalent ounces, bringing the total M&I resources to 155 million [silver-equivalent ounces]," expert Thibaut Lepouttre noted in Caesars Report in June. Lepouttre expects Chinchillas may contain "half a billion silver-equivalent ounces."

Silver Wheaton Corp. (SLW) is also levered to the silver price. In Raymond James' July 21 Q2/16 Precious Metals Preview report, the firm named Silver Wheaton a top pick both as a silver equity and a streamer. Credit Suisse upgraded Silver Wheaton at the end of June from Neutral to Outperform. Analyst Ralph Profit noted, "While CRA tax risk likely continues as an overhang, SLW's business model still provides investors with a highly levered play on precious metals prices and SLW should still command a multiple in-line with royalty valuations and a premium to precious metals miners based on its leverage to underlying prices, free cash flow, and strong balance sheet."

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