Silver has held up remarkably well during the current correction/consolidation. In the past, silver was prone to violent corrections that seemed to occur like clockwork following any major upleg. These corrections would often give back 50% or more of the previous gain in just a fraction of the time it took to amass the gain. During the past year, however, the corrections have been very mild with physical buyers showing up in force on even the slightest dip. I see this trend continuing as we move forward with demand overwhelming supply.
I was invited to visit Endeavour Silver’s mine in Guanajuato, Mexico a few years ago and hiked deep into the ground to see the silver mineralization they were encountering. It was clear that Endeavour’s management was both passionate and knowledgeable about their business. Following the mine tour, we visited the mill and walked through the various steps involved in extracting the silver from the larger rock. Some investors may find this information overly technical, but I found it fascinating and valuable in my research to comprehend the inner workings of a silver mine. It helps with your overall understanding of the drill results, resource estimates and economic studies that are nothing more than a bunch of numbers without this perspective.
If you are a precious metals investor and have the chance to do a mine tour, I would highly recommend it. In lieu of a physical tour, I recommend watching the two videos below that were recently put out by Endeavour Silver explaining how silver is mined.
In terms of an investment, Endeavour Silver (NYSE: EXK or TSE: EDR) reported record earnings last year of $7.1 million versus a loss of about $2 million in 2009. They also increased production by 20% to 4.2 million silver-equivalent ounces. With quality properties and experienced management, I believe Endeavour has all of the key ingredients to continue this growth into the future. They have a market cap of $770 million and the stock is up nearly 200% in the past year alone.