Despite the correction in many stocks, precious metals continue
to hold their own. The catastrophe in Japan has helped to
accelerate stock selling, yet silver and gold are holding up well
since precious metals are part of the flight to safety trade.
Events like the earthquake in Japan can create opportunities for
investors that are ready to jump on the right investment, and I'd
suggest having silver stocks at the top of your list. Many are down
10 percent or more since the catastrophe.
The spot price of silver in London rose nearly 80 percent in
2010, giving many mining companies the motivation to bring as much
of the precious metal to market as possible in 2011. This year,
silver is up more than 15 percent.
One Canadian miner just released exciting news about one of its
projects that could go into production soon. If it does, and silver
prices remain strong, investors that purchase shares ahead of
production will be well positioned as the company brings a new
revenue stream online.
The company is
MAG Silver (
) (TSX: MAG.TO)
. The stock has become volatile, as have most stocks, in the last
couple of weeks as the market digests earnings, and as Japan's
economy struggles with the aftermath of the recent earthquake.
Although MAG's company headquarters is in Vancouver, British
Columbia, the company's mines are in Mexico. MAG wholly owns over
100 square miles of prospective ground throughout that country. The
company has nine primary mining projects in progress, but it just
released a report on the Juanicipio mine that could be a
At the Juanicipio mine, in the prized Fresnillo Silver Trend
region northwest of Mexico City, the company stated in a
"prefeasibility study" that drilling has encountered a high-grade
vein. Indications are that this Juanicipio Vein has 46.5 ounces of
silver per ton of ore, about four times the density of the
company's nearby Valdecañas Vein.
Juanicipio is a joint venture with Fresnillo PLC, who is the
project manager and holds 56 percent of the project. MAG Silver is
the junior partner and holds the remaining 44 percent.
The property is a rich, yet undeveloped asset. In September MAG
released a study that indicated Juanicipio contains 110.8 million
ounces of silver - about 27 million ounces more than a previous
study. In a February 2011 presentation, MAG Silver executives also
pointed out that there's "
strong upside for the discovery of more veins
Along with silver, Juanicipio also contains gold, and zinc which
would be mined and likely accounted as 'silver credits', an
industry standard which helps consolidate reporting.
The upside from this new operation is significant, and investors
that are looking for exposure to a developing silver company should
put MAG Silver on their watch list.
For additional silver opportunities in Mexico, you'll want to
take a look at companies that span the range from explorers to
producers. MAG Silver, as a developer/producer, fits in the middle
of this range. In my report, Sierra Madre Silver, I've included
three companies, each in different stages of growth. You can find
your copy of the report