When it comes to silver market trends, 2014 might end up looking
a lot like this year, with some miners continuing to focus on cost
cutting, and a "duality" between gold and the industrial world
affecting the metal, according to the latest comments out of the
For the miners, earnings season continued this week, with
First Majestic Silver
) weighing in with its third quarter results on Tuesday,
net earnings of $16.3 million or $0.14 per share -- a drop of 34%
compared to last year -- and revenues of $76.9 million in Q3, up
21% on the third quarter of 2012. Silver ounces produced were up
22% on the same quarter last year.
Looking ahead, CEO and president Keith Neumeyer says that after two
back-to-back quarters of total cash cost reductions, management has
little choice but to cut further, as they can't count on an
improved short-term environment for silver prices.
"Our focus for 2014 will be to optimize operations, to continually
reduce costs, and remove all discretionary investments that don't
have major impacts on future guidance," Neumeyer said in a
When it comes to the near-term, the Thomson Reuters GFMS Interim
Silver Market Review released this week says silver prices have
averaged $24.51 per ounce in the first 10 months of the year, down
20.7% year-on-year. Prices are forecast to average $24.24 for the
full year, compared to $31.13 in 2012.
"One of the defining characteristics of the silver market is its
display of duality, at times closely shadowing developments in the
gold market and at others taking cues more from the industrial
world. This trend is forecast to continue into 2014, as an
improving physical-demand environment is faced with the potential
for an unwinding of US government quantitative easing and a
stronger US dollar," according to the report.
Silver Standard Resources
) reported net losses in the third quarter, with Hecla Mining
a net loss of $8.6 million, or $0.03 per share, but a 42% increase
in silver production compared to the same quarter last year.
a net loss of $14.3 million, or $0.18 per share, compared with a
net loss of $1.6 million, or $0.02 per share, in the same quarter
last year. Revenues were $43.9 million in Q3, versus $73.5 million
in Q3 2012.
After quarter-end, Silver Standard Resources also announced the
sale of its San Augustin exploration project in Mexico to
) for $75 million. "We have the capacity within these market
conditions to be opportunistic to develop, sell, and buy
properties," said company president and CEO John Smith.
an adjusted net loss of $23.4 million or $0.23 per share, compared
with a $34.6 million or $0.35 per share adjusted net loss in the
previous quarter. The company reaffirmed its 2013 full-year
production guidance of 18.0-19.1 million ounces of silver.
Earlier this week, precious metal streaming company
net earnings of $77.1 million or $0.22 per share, meeting analysts'
estimates, but down 36% on Q3 2012. Revenue was $166.4 million in
Q3, up 3% on the same quarter of last year.
Although it reported record attributable silver equivalent
production of 8.9 million ounces in Q3 -- up 17% on the same
quarter of 2012 -- Silver Wheaton's average realized sale price per
silver equivalent ounce was down 32% on the same period last year.
The company says its 2013 silver equivalent production is still
expected to exceed 33.5 million ounces and its 2017 guidance has
been revised to 42.5 million silver equivalent ounces.
Due to its silver streaming arrangement, Silver Wheaton was also
(ABX) announcement last month to temporarily suspend the
Pascua-Lama project on the border of Chile and Argentina.
As a result, the company says it will be entitled to silver
production from three of Barrick's producing mines for an extra
year -- until the end of 2016 -- to cover any production shortfall
at Pascua-Lama, until Barrick satisfies a completion test.
On Thursday, it will be
Pan American Silver's
(PAAS) turn to release its third quarter numbers, with analysts
expecting earnings per share to come in at $0.05, according to
Reuters data - down from $0.25 in Q3 2012. In September, Pan
American Silver announced that it would close out its outstanding
silver and gold hedges before the end of the year, as a result of
its increased optimism about the short-term prospects for both
So far this year, AG, SSRI, SLW, CDE, HL and PAAS are each down
more than 40%, compared to a 33% fall for the
iShares Silver Trust ETF