Casey’s three silver picks

Casey's three silver picks - at Moneyweek.co.uk - the best of the week's international financial media.

Investors in silver companies should always bear in mind how small the mines are in terms of revenue. This means that most stocks will be fairly speculative buys on a silver price rise. Which are the best? One of my long-term holdings and a keep-it-simple purchase for those who want silver is Silver Standard Resources (SSO.TO C$16.18), writes Doug Casey. It recently announced very favourable results from its wholly owned La Pitarrilla silver project in the Mexican state of Durango, where two resources that can be tapped with low-cost bulk mining methods have been confirmed. (Bear in mind that SSO does not mine silver now, nor does it plan to, so it is effectively a call, with no expiry date, on silver in the ground.) With more than C$60m in cash, around C$9m in marketable securities, plus over 650 million ounces of silver in the resources and reserves from its global properties, SSO is one of the best firms leveraged to silver. A solid buy.

I also own lots of silver explorers, all of which are overpriced relative to their assets. Most of those you can buy have, at most, a resource of 25-30 million ounces. Considering capital and operating costs, they're really just speculations on much higher silver prices; they have no real present value. I own them because I think, perhaps to an even greater degree than the junior golds, junior silver stocks are going to go into a bubble phase.

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