4 Silver Mining Stocks to Watch on Solid Industry Trends

Industry Overview - The Zacks Mining - Silver industry is experiencing promising prospects due to rising silver prices and increasing global industrial demand, projected to reach around 1.2 billion ounces by 2025 [1][4] - Despite an 11-year high in silver supply, the market is expected to face a fifth consecutive year of deficit, which is likely to support higher prices [1][5] - The industry comprises companies engaged in the exploration, development, and production of silver, with only 20% of silver coming from mining activities where it is the primary revenue source [3] Demand and Price Trends - Total industrial demand for silver is expected to surpass 700 million ounces in 2025, with a year-over-year growth of 3%, driven by strong demand from green economy applications and consumer electronics [4] - Silver prices increased by approximately 22% in 2024 and 10.7% in the current year, supported by economic uncertainties and expectations of tight supply [5] - The silver market is projected to record a significant deficit of 149 million ounces in 2025, further bolstering prices [5] Cost Management and Operational Efficiency - Industry players are facing rising production costs, particularly in energy, which constitutes about 50% of their production costs [6] - Companies are focusing on improving operational efficiency through technological innovations and investments in R&D to manage costs effectively [6] Industry Performance and Valuation - The Zacks Mining - Silver industry currently holds a Zacks Industry Rank of 67, placing it in the top 27% of 246 Zacks industries, indicating bright prospects [7] - Over the past year, the Mining-Silver Industry has outperformed both the Basic Material sector and the Zacks S&P 500 composite, with a collective gain of 79.3% [9] - The industry is trading at a forward 12-month EV/EBITDA ratio of 6.34X, lower than the S&P 500's 13.96X and the Basic Material sector's 6.70X [11] Company Highlights - Buenaventura Mining: Reported a 40% increase in revenues and a 1,928% rise in net income for fiscal 2024, with plans for capital expenditure between $330-$355 million for 2025 [14][15] - Fresnillo: Produced 107 million silver-equivalent ounces in 2024, with a focus on boosting production through various projects [18][19] - Hecla Mining: Achieved record sales of $929.9 million and adjusted EBITDA of$337.9 million in 2024, with a strong focus on operational excellence [20][22] - First Majestic Silver: Produced 21.7 million silver-equivalent ounces in 2024 and recently acquired Gatos Silver, expected to enhance free cash flow and production guidance for 2025 [22][23]