Why Are Investors Just Now Getting Interested Silver Stocks?
Excelsior Prosperity w/ Shad Marquitz (05-22-2025)
Back on Thursday March 27th, Silver closed at $35.085 (the highest level it had closed at since 2012). Then intraday in the early morning on Friday March 28th silver tagged another high of $35.495, after opening at $35.325 (the highest open since 2012).
This seemed pretty exciting to me, and it should have been exciting to anybody that was watching the silver futures pricing those 2 days.
Even though that March close on Thursday the 28th at $35.08 was a higher level than the $35.04 hit in October of 2024, (and the intraday pop to $35.49 on the 29th clearly was even higher), the silver stocks mostly traded at lower levels than where they were at 5 months prior at the exact same pricing. (Huh?)
(SILJ) is a better proxy to the silver stocks than (SIL), and there are many silver junior charts that share a similar pattern.
Here are the holdings inside of SILJ: https://amplifyetfs.com/silj-holdings/
Notice the nearly 60 silver stocks inside of (SILJ,) as an aggregate group, moved much higher in October of 2024 (up to $15.18) than they did in March of 2025 (at $12.98) at even higher silver futures prices. Makes sense right? (Nope, that makes no sense, but those are the markets we have.)
This was quite strange considering that Silver had spent most of March of this year in the $32-$34 range for a few weeks, which was much more encouraging than the brief short-squeeze pop in October of 2024. So why weren’t investors bidding up the silver stocks in March to higher levels than the prior peak? (Nobody knows… but it was very counterintuitive at the time.)
Keep in mind that this was all happening BEFORE the shock and awe of the April 2nd Liberation Day tariff news roiled most markets. While the announcement was still approaching the following week, that doesn’t come close to explaining away why the silver stocks weren’t getting more of a bid in March when silver was absolutely ripping to the upside and at higher levels than in October.
All things considered, SILJ should have been putting in a higher peak than $15.18, not the pitiful $12.98 it posted. There were stocks that did get a bid, but as a group the silver stocks shrugged off that big move in the underlying metal to end Q1. It was very underwhelming at the time.
So then we had the “sell everything” market crash in early April, followed by a pretty quick V-shaped recovery after the tariffs were paused for 90 days. Silver rebounded back up to $33.54, and SILJ moved to a slightly higher peak than March to $13.20.
Why did these 60 silver stocks collectively move even higher in late April compared to the prior month in March? Silver wasn’t making new highs, but the stocks were getting more traction suddenly. Very odd… but we’ll take it.
From mid-April and throughout May, silver futures have just channeled sideways in a range between $31.78-$33.91, and if anything pricing has been boring, not breaking out or breaking down. However, so many people over the last few weeks on the KE Report or at the 3 conferences I just attended have been expressing how silver is just now starting to get exciting. (Huh?)
So when Silver climbed higher all of March to make a new recent 13-year high surging up to $35.49, nobody cared, and the SILJ made a much lower peak than it did in October of 2024 at the same pricing levels. That is whack…
Then silver gets slammed down all the way to $27.54 during the Liberation Day panic sell, and claws its way back up to a lower sideways range-bound trade, and NOW people get excited about it. {?} (that logically makes no sense… they should have been more jazzed in March, but hey, better late than never….)
Now that Silver has breached $35 twice in the last 7 months, it seems plausible that the next time it gets definitively up above $35 it will hold onto that level and convert it from resistance into support. (3 times a charm).
Now, it is possible that the announcement on May 11th regarding the takeover of MAG Silver by Pan American Silver, did start freeing up stuck capital in the silver space to rotate down into more junior companies.
We’ve already discussed that transaction and along with which silver producers and developers could be the next takeover targets in this article:
Just a couple of days later on May 13th, we then saw another M&A deal where Silver47 announced it was merging with Summa Silver.
Silver47 and Summa Silver Announce Merger to Create a Premier U.S. High Grade Silver Explorer & Developer and C$5 Million Brokered Financing
With regards to this deal: Look, I realize Silver47 is massing up from 168 million silver equivalent (AgEq) ounces to 248 million AgEq. However, other than growing for the sake of growth, there just doesn’t seem to be many synergies between an Alaska deposit, and the 2 deposits down in the Southwest that Summa has in Nevada and New Mexico. Just sayin’…
It seems like more of a 1+1=2 transaction, versus a 1+1 = 3 transaction.
I think a lot of people (me included) were surprised by this business combination, because other than just massing up under the cover of it being better from a “seasonality” standpoint (ie…drilling in Alaska during the summer, and then Nevada/New Mexico in the winter), there isn’t much else there as far as combining other than size.
It also brings up the question of how they are going to fund the drilling for 3 separate projects, instead of just the 1 and 2 the companies had separately.
In contrast, it makes FAR MORE SENSE for Blackrock Silver and Summa Silver to have merged, since their respective Tonopah West and Hughes silver projects are right next to one another (literally across the street from one another).
If they were combined into a larger project then there is no seasonality factor at all. A company with both assets could drill on both of them year-round.
It doesn’t take much effort for most people to see the synergies in combining these 2 projects into 1 larger project; as both resources get more advanced and move ever closer to a development scenario.
This is just another example of a missed opportunity that actually makes logical sense in the mining sector. Heaven forbid though that we see transactions that actually have synergies in this sector. I guess at one point Silver47 and Blackrock could still merge, but with the Alaskan property in the mix now then it complicates that potential more than straight Summa/Blackrock merger.
While on this train of thought, I still believe that a merger which would have been world-class was if SilverCrest and MAG Silver would have combined forces as the de facto lowest cost silver producer. Think about what it would have looked like if those 2 best-in-class producers with lowest-quartile costs from SilverCrest’s Las Chispas and MAG’s 44% JV stake in Juanicipio would have come together under one roof. Now THAT proforma company would have a been a merger deal to get jacked up about!
Unfortunately, we often see odd-couple pairings in the mining sector:
· I still remember as a Roxgold shareholder the feeling when it was announced that Fortuna Silver was taking them over… (WTF?) Sure, they’ve helped Fortuna out of a tough spot in silver production by bringing in very profitable gold production. Keep in mind thought that Roxgold would have been amazing for so many other mid-tier gold producers as bolt-on operations. There could have been a really stellar gold company created, but it was another opportunity lost in the mining sector.
· The recent Equinox/Calibre business combination was also met with more pushback than normal from both retail and institutional investors, because initially there was no premium, there weren’t obvious synergies, and importantly the Valentine Mine is just getting ready to go into production (which would have given Calibre a huge rerating higher)… but it’s a done deal now.
· The Coeur/Silvercrest combination wasn’t terrible, but it was also met with more disinterest and head scratching overall. Don’t get me wrong, I think it does a lot to help make (CDE) a much stronger company, and all that cash fixed their balance sheet. I have a big position in CDE now as a result of the merger. In truth though, any producer that added in Silvercrest to their portfolio was going to be a lot stronger company, with a world-class asset in Las Chispas, in concert with the company being debt free, with a pristine balance sheet, and with physical gold and silver on the books.
· A pairing of Silvercrest and MAG would have been mind-blowing as the 2 best lowest-cost operators in Mexico with tons of exploration upside… but alas, that ship has sailed now…
· A pairing of Blackrock Silver and Summa Silver (Nevada neighbors deal) also made all the sense in the world. So of course, the mining sector gives us Alaska + Nevada/New Mexico. OK… I guess??
Then just a couple of days after that, we saw another acquisition by Vizsla, and at least we can say that this acquisition made a lot of sense to add on this very prospective exploration land package, very close to their Panuco Project.
VIZSLA SILVER TO ACQUIRE LARGE SANTA FE CLAIM PACKAGE INCLUDING A PRODUCING MINE ALONG TREND AND IMMEDIATELY SOUTH OF PANUCO - May 15, 2025
I digressed from the initial technical disconnects between the silver futures pricing and the action in SILJ and many of the silver stocks over the last few months, to point out that maybe these 3 back-to-back silver M&A transactions have added to the excitement of “who’s next?” in the silver space.
There has also been a constant flagging of the gold:silver ratio being at extreme levels near 100 in about every interview I’ve listened to that touched on silver for the last 2 months. Maybe precious metals investors are finally starting to get positioned for the silver catchup trade.
There are some better known silver stocks that have been steadily gaining momentum this whole year, which I find very encouraging for what the rest of the silver stocks will likely do if we see a full-on silver catchup trade get underway.
I think one of the best examples has been the blistering move higher that Avino Silver and Gold Mines (TSX;ASM – NYSE:ASM) and has been making thus far in 2025.
We first covered this stock last May in this channel in the article:
Opportunities In Growth-Oriented Silver Producers – Part 1 https://excelsiorprosperity.substack.com/p/opportunities-in-growth-oriented
I’ve been table pounding bullish on Avino Silver and Gold’s growth profile, improving costs and margins, and advantage of having a big board NYSE American US listing for some time now.
More recently, I appeared as a guest on 2 different investing shows last month - the Grey Swan Investment Fraternity’s April live call with Addison Wiggin and Andrew Packer, and then Joel Elconin’s Stock Trader Network show on April 17th, where I flagged (ASM) for their audiences as a stock on the move.
I even mentioned Avino again last week when presenting in a panel at the Natural Resource Stock Expo in Atlanta, Georgia.
So, I have been and still am a big fan of this company and where it is still going in this bull market.
Having said all that, I did trim back part of my position in today’s trading session at $2.99 and again at $3.03 because this position has become a heavier and heavier weighting in my portfolio and was up 356%. I’m not negative on the stock, but it would be crazy not to pull at least some profits on a move like that.
My goal here is to share what I’m doing with readers in my own portfolio. Maybe I’m trimming to early (as is often the case), but I’m not going to get hurt in my account ringing the register on a partial position for a 3.5 bagger.
I’d point out that unlike much of the silver sector, Avino made a much higher high in March of this year at $2.00 (when silver prices moved higher), compared to the peak it put in last October at $1.56. There is a silver mining chart that actually makes sense.
The P/E ratio is up to 29.79 now though, which is getting up there.
Also, the pricing is well above the 50-day Exponential moving average (which is undeniably bullish), but I’d like to buy back the partial position I sold today if it comes back down to retest that 50-day EMA area in the future.
Additionally, those high-wicked daily candles around $3.04 look a bit toppy to me, but hey, I could be wrong about that. (and often am)
The surge higher that ASM has gone on, from April into May, actually exceeded my expectations for the trade to date. It also really outperformed many other silver stocks and is getting more fairly valued compared to others.
I knew ASM was going to get up to $3 (and it is likely still going much higher medium to longer-term). My perspective is that it got up here quicker than anticipated, all while many silver stocks are still waking up from their slumber…
As a result, some of the funds I trimmed were recycled today down the risk curve into unloved junior silver producer laggards that I view as turn-around stories, like Guanajuato Silver and Silver X.
Yes, both of those companies have had operational challenges to overcome, but both companies are showing signs of improvement, and they likely will play catch up later in 2025 (providing we keep these higher silver prices in the low to mid $30s).
No, they are not best-in-class producers, but sometimes the undervalued companies showing the most improvement will make the next outsized gains. (that is definitely not investing advice, or an endorsement to buy either stock. I’m simply sharing my own personal investing thesis and unpacking what I’m doing in my own portfolio for entertainment purposes).
It is for these very same reasons that one of my largest silver positions remains in Santacruz Silver Mining Ltd. (TSXV: SCZ) (OTCQB: SCZMF). It is actually just starting to wake up, and tracked the silver move higher in March in a way that made sense.
It looks like it is back to that same level at the March peak, so it will interesting to see if can break out above that $0.60 level on a closing basis.
From a forward-looking perspective I believe that the trajectory that Avino Silver and Gold has been on, is the same type of move we can expect from many of the silver producers and quality developers over the next 12-18 months. Exciting!
I don’t believe the move in ASM is over (far from it), and resource investors are likely on the right track to be getting more excited about silver stocks.
More of these kinds of moves please!
Thanks for reading and may you have prosperity in your trading and in life!
· Shad