Silver is stagnant. It seems a combination of rallying stocks, US dollar, and hefty bond yields are all attracting capital away from precious metals. Still, it may be time to take the other side of that bet, with sentiment now pretty awful in precious metals and many commodities. MAG Silver (MAG) is one name I like that has had some more exploration success at Deer Trail, Utah, comments Peter Krauth, editor of Silver Stock Investor.
Expectations for sustained high interest rates are clearly dampening precious metals sentiment. But it’s precisely when sentiment is at its lowest that starting to buy, at least gradually, as difficult as it may be, makes the most sense and can be the most rewarding.
Take MAG. Three new zones discovered from step outs help confirm the hub-and-spoke thesis at Deer Trail thanks to different mineralization styles. Phase 3 drilling is in progress to chase the porphyry center. Highlights are:
• DT22-11: 400 m north of Carissa discovery cut a 23.5 m zone of multiple stacked semi-massive sulfide mantos, the best of which grades 150 g/t Silver, 1.1 g/t Gold, 0.8% Copper, 4.9% Lead & 4.1% Zinc over 5.0 m.
• DT22-12: 800 m northwest of Carissa cut 33.0 m grading 0.6 g/t Gold encompassing four high-grade gold zones the best of which ran 6.1 g/t Gold over 1.5 m.
• DT22-13: 1.7 km southeast of the Carissa cut six strong copper-gold bearing structures, the best of which graded 2.2 g/t Gold and 2.1% Copper over 4.2 m.
These are exciting and encouraging results. I look forward to the next phase and drill assays, especially guided by Peter Megaw’s exceptional expertise.
The Juanicipio mine reached concentrate production in Q1, is operating at 85% of its 4000 tonne capacity, and silver recoveries are 88%. Full commercial production was declared on June 1.
This remains an exceptional silver mine with head grades in Q2 of 498 g/t silver, and 4.4Moz silver were produced in Q2, to increase through Q3, expecting to reach nameplate capacity. The GDX ETF added MAG to its holdings on June 20. MAG looks oversold and should nicely leverage silver prices when they rally.
Recommended Action: Buy MAG