Thematic
We recently traveled down to Mexico to attend site visits for several silver companies that range from early-stage explorers to junior producers. In the state of Durango we visited Avino Silver’s (TSX:ASM, Not Rated) Avino Mine and La Preciosa project, Silver Wolf Exploration’s (TSXV:SWLF, Not Rated) Ana Maria project, and Southern Silver’s (TSXV:SSV, RESTRICTED) Cerro Las Minitas project. In Guanajuato we saw Guanajuato Silver’s (TSXV:GSVR, Not Rated) El Cubo mine and Valenciana Mines Complex. Lastly, we visited Kootenay Silver’s (TSXV:KTN, BUY, C$2.85 target, Taylor Combaluzier) Columba project in Chihuahua. In this report we provide an update on the silver market, a geopolitical update on Mexico, and key takeaways from our site visits. We believe that junior silver equities have room to run as they trail producer performance, while we expect geopolitical tensions and global economic activity to be the key influence on the silver price in the face of a looming production shortfall. Despite Mexico’s standing as one of the preeminent mining jurisdictions in the world, new mining laws passed in 2023 have created headwinds for investment in the country. Leftist Claudia Sheinbaum won the recent Mexico Presidential Election on June 3rd; however, we believe Ms. Sheinbaum is likely to take a more technocratic and more moderate approach towards the mining sector.
