Given the events in the banking and financial sector in recent days, gold and silver are looking more crucial than ever to hold as assets. Precious metals are no one else’s liability, a fact that more market participants are starting to grasp…quickly. I like Endeavour Silver (EXK) here, notes Peter Krauth, editor of Silver Stock Investor.
Here’s a notable recent statistic: 46% of Americans think we’re already in a recession. That’s according to research firm Morning Consult. But that’s not all. Another 22% said they don’t think we’re in a recession yet, but will be within the next 12 months.
It’s really not that surprising. And according to the survey, which covered the views of 2,200 adult Americans, they’re planning for a recession by accumulating emergency savings, reducing spending, and even stocking up on food. All wise things to do, in my view. But owning precious metals is also a wise move for protection in turbulent times.
As for EXK, it reported 2022 results recently, with 9Moz silver equivalent. That was above upward revised guidance of 7.6 – 8 Moz AgEq. Net revenue was $210M.
Cash costs were $10.65, while all-in sustaining costs were $19.97/oz silver. That was below cost guidance as increased silver was produced. But that’s still quite high, keeping margins on the thin side.
Cash is $83M, $94 in working capital, with cash down in Q4 on Terronera development. Operating cash flow was up at $54M, and net income was $6.2M, impacted by inflationary pressures and a reduced silver price.
Construction preparation is advancing at Terronera, mobile mining equipment is being delivered, major equipment is being purchased, and facilities are being built. A financing package is yet to be completed, which will lead to a final construction decision, while additional amended permits are expected in the near term. Endeavour remains attractive.
Recommended Action: Buy EXK on weakness.
