The Top 5 Silver Stocks for 2013
By Christopher Barker
December 31, 2012
(Excerpted)
After analyzing the gold and silver markets in great detail over the course of this secular bull market, I see silver surging higher than most folks may imagine as our simultaneous debt and currency crises continue to unfold on the world's stage.
Embarking upon my annual exercise to identify the greatest investment opportunities for the coming year among the miners of silver, I was struck anew this year by the astoundingly small number of primary silver producers to select from that stand above my $200 million minimum market capitalization requirement. I own shares in a bunch of micro-cap silver names that I fully expect to yield dramatic multibagger returns as the silver price trends much, much higher. For discussions of those sorts of higher-octane micro-cap plays, Fools will find helping hands within the Motley Fool CAPS community from such frequent contributors as skypilot2005 and SN3165.
For purposes of the present list of top silver picks for 2013, however, only companies valued above $200 million were considered to emphasize established producers that are more suited to a wide range of investment objectives and styles. This year, I will begin with a list of my top five picks below, and follow up with my preceding five selections (picks 10 through six) early in the New Year. Because I have plenty to share regarding each of these selections below, let's jump right in with my no. 5 pick for 2013 and count down the list from there.
5. Aurcana (NASDAQOTH: AUNFF ) (Ticker "AUN" on the Toronto Venture Exchange)
After touching a 2012 high of $1.30 just a few months ago, shares of Aurcana have corrected powerfully along with the remainder of the silver patch heading in to the year-end. Meanwhile, the company's better-late-than-never declaration of commercial production at the Shafter mine in Texas a couple of weeks back marked a significant milestone that appears to have been summarily ignored by the market. I visited the Shafter mine back in June for the commissioning ceremony ( http://tinyurl.com/ajdjvlz ), and interviewed CEO Lenic Rodriguez
( http://tinyurl.com/aw8ocxd ) several months before at a conference in Vancouver. At the time, Aurcana beamed with confidence regarding an incredible production growth spurt ( http://tinyurl.com/aya997l ) in the making, and now that Shafter has achieved commercial production we will see whether this budding mid-tier producer can come through with the ambitious initial production goal of 3.8 million silver ounces in its first full year of operation .
While recognizing some of the logistical challenges that could intervene -- including the ongoing process of hiring and training mine personnel -- my strong impression of Lenic Rodriguez is that he possesses an uncanny knack for generating excitement internally around each of the company's successive near-term priorities. Even allowing for a minor hiccup or two along the way, I conservatively envision an advance of 30% to 50% during 2013 from this stock's 2012 year-end close.
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