I have been shying away from most speculative purchases in favor of solid blue chip companies. However, a big price drop in silver/gold has led to some possible opportunities. Silver has dropped from a price of 29.25 to 23.61 (as of writing) in only 1 month. This is a drop of almost 20%.
One of the mining companies I follow is Pan American Silver Corp. (PAAS) which is headquarted in Canada. PAAS is engaged in the exploration and development of silver producing properties. Although PAAS does produce gold, zinc, lead and copper, it’s main product is silver.
Personally I like silver better than gold as an investment mainly due to industrial demand that gold doesn’t have. I’ve been a buyer of physical silver since it was at 18/oz. I watched it go to near 50/oz and now it’s back down to 23/oz. It’s definitely not an investment for the faint of heart.
PAAS also just recently increased their dividend by 150%. They now yield close to 4%.
There is a lot of risk with this company. Their cost of silver in the 4th quarter was 21.88/oz which is really close to where silver is currently trading. This is actually lower than some of the other silver producers though. I believe this will put in a floor on the price of silver and would expect silver to bounce back a little.