With the growing concern over the future of the US dollar, and global inflation more generally, owning physical gold and silver is a wise insurance move. Owning gold stocks can be part of that strategy, as they soared during times like the Great Depression. Here’s a quick compilation of some basic starting points for those interested in investing in silver stocks.
There are many ways to invest in silver, including ETFs, mutual funds, buying physical bars, etc. This post will just focus on large-cap silver stocks for simplicity. In another post I’ve looked at some junior silver producers specifically.
Some of the Largest Silver Producers
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Penoles – (Mexico) – Since 1887. One of Mexico’s largest exporters. The world’s top producer of refined silver. Owns the world’s largest silver mine, plus Mexico’s largest gold, lead and zinc mines. Has been listed on the Mexican stock exchange since 1968 as PE&OLES.
Grupo Mexico (GMexico) – (Peru, Mexico) – Since 1978, originally as GIMMEX. Owns largest mining company in Mexico. Trades OTC as GMBXF.
BHP Billiton – (Australia, UK) – In 2001, Australian resource company BHP Limited bought the UK mining company Billiton plc. As a result of the acquisition, the company is listed on two exchanges, one in Melbourne (as BHP Billiton Ltd) and one in London (as BHP Billiton plc). This will explain the difference in the shares’ tickers when you go to buy them. Other than this, as far as I know there is no difference between the Ltd (NYSE: BHP) and plc (NYSE: BBL) shares. It’s the same company. I am not sure why the share prices diverge; it must be related to currency exchange rates.
KGHM Polska Miedz – (Poland) – Founded in 1961. Specializes in copper and silver. Trades as (OTC : KGHMF) and (OTC : KGHPF)).
Volcan Compania Minera – (Peru) – Founded in 1943. Also mines lead, zinc and copper. Listed on la Bolsa de VALORES Lima (Lima Stock Exchange) and traded also on the Madrid stock exchange. Their website is primarily in Spanish, with some English. Traded in the US as (OTC: VCANF).
Rio Tinto – (Australia, UK) – Mines pretty much everything: copper, gypsum, diamonds, gold, coal, nickel, potash, lead, iron ore, bauxite, aluminum, uranium, talc and salt (they are the world’s largest salt exporter!). As with BHP Billiton, since 1995 Rio has been a “single economic unit” and headquartered in two cities – the same cities: in Melbourne as Rio Tinto Limited, and in London as Rio Tinto plc. You might want to wait before buying, however. The ADR share price (which is a purchase of the plc shares) is one of the highest I’ve ever seen, at about $431.00 USD.
Of these companies, only BHP and Rio pay dividends. Rio pays twice a year, BHP once a year (their next payment is September 25). Recently, BHP Billiton has offered to buy Rio Tinto (3.4 Billiton shares for each Rio share). If it goes through, this would be a massive acquisition and BHP would become, by far, the world’s largest resources company. Billiton also recently snapped up one of Canada’s few junior potash production companies. If it were me, I’d go with Billiton.
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Lithium Mining Companies in Canada
Investing in Bullion
Top Gold and Silver Dealers – Invest Directly In Bars and Coins
GoldMoney: Another Way To Buy Gold Online
Buy Gold Online Through Scotiabank’s New eStore
The New Gold Standard? Gold Will Help Replace the USD as Reserve Currency
Investing in Gold Stocks
Top 20 List of the Largest Canadian Gold Stocks
Gold Dividends: 11 Mining Stocks That Pay Them
Is $1000/oz. A Good Time To Buy? (includes list of the common gold ETFs)
Should You Invest in Bullion, Gold Stocks, or Gold ETFs?
World’s Largest Gold Mining Stocks
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OK this may sound a little left of field but I own a jewellery shop and the price of raw material has had a big impact on the price of the jewellery I sell.
It’s just a little shop and the strategy behind doing it was to sell stuff at the lower price bracket part of the market. Due to the increase in prices of raw material my sales have fallen probably by about 30% because my jewellery is no longer as cheap as it used to be. Why am I telling you?, because its a good exmaple of how the increased price in comodities has a direct impact on trading for the ‘little guy’
Just thought I’d share that with you.
GaryH,
thanks for mentioning that, it’s not at all left field but a great example of how commodities do affect more mundane aspects of living. I was just reading an article on how the new prices in oil don’t just affect gas prices, but all sorts of things from toothpaste to anything else that uses petroleum to make it (alot of plastics, etc.).
Keeping oil prices high ensures the economies prices stay inflated which is a good thing since debt is so prevalent, because as you say oil is used in everything – unfortauntely even fertiliser which effects food prices. As for silver, it was China vacuuming up all the precious metals to spend it’s huge money reserves didn’t help, now China’s econony has overheated and the dollar losing value by the day the price of silver is going to fall in value slightly, it will then rebound massively when more investors work out that no currency is safe in this world anymore.
Gee, I don’t know – the Canadian dollar is about as sound a currency as you can get. The only disadvantage might be that it isn’t as large a money pool in absolute numbers as, say, the Euro or Yen. So it takes less incoming investor money to shoot the value up than it does for such bloated currencies as the Yen and USD. As for fiscal fundamentals though, it’s on way more solid footing than the USD.
In addition to the reasons listed above for owning silver Mining Stocks I would add that silver’s value relative to gold has been on the rise. Playing gold and silver are great ways to balance your portfolio especially in times where belief in currency is low. Mining stocks are poised to take off as the value of commodities continues to increase.
Thank you very much for sharing this with us. Mining is one of the industries with the most riveting history.
Only one question…with all the resources in the ground, gold, copper, silver…what is wrong with NXG? Price stays pretty depressed even as gold and silver appreciate significantly? Poor management or poor executiion? They seemed to have settled the hassle with the native tribes.
Just because these companies are the largest, it defineatly does not mean they are the best investment as far as silver companies go……just my 2 oz’s worth.
I have a web site where I research stocks under five dollars. for those investors looking for a way to invest in siver mining companies though an exchange traded fund. their is one such fund it is Global X Silver Miners ETF symbol (SIL).
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