Investing
in Silver

There are good reasons to invest in silver, some being that supply is expected to shrink, it is comparatively cheap, and there is no counterparty risk.

Investing in Silver in Canada

Physical Silver - One idea is to buy rounds, bars, and coins from different precious metal refineries and mints. The main reason to invest in physical silver is that it is a tangible asset that can be used for wealth preservation. Bonds, stocks, and other instruments are promissory notes while bullion is a physical asset.

 

Silver Companies - A second option is to invest in stocks of companies such as Great Partner Mining, Wheaton Precious Metals, and Metalla Royalty & Streaming. Wheaton Precious Metals, for example, is one of the biggest companies specializing in precious metal streaming. The company has two silver mining sites – the Penasquito and Antamina mines. Metalla Royalty & Streaming engages in production, development, and exploration and offers financing for acquisitions, debt refinancing, and expansion. Greater Partner Mining is a company that engages in exploration and production and currently operates two mines, the Topia mine and Guanajuato mine complex. It is a growth-oriented company that recently acquired Beadell Resources and is listed on the New York and Toronto Stock Exchanges. Other companies to look into are Kingsmen Resources, SSR Mining, Sierra Metals, and Fortuna Silver Mines. Sierra Metals is a good investment choice given the fact that the company operates highly productive sites in Mexico and Peru, including the Cusi, Bolivar, and Yauricocha mines. Sierra Metals specializes in commodities such as copper, gold, zinc, lead, and silver. Kingsmen Resources is another mining development and exploration company that was incorporated in 2000 and owns the La Trini tellurium, gold, and silver deposit. SSR Mining has assets in Argentina, the U.S., and Canada, making investing in stock a safe bet. The company has exploration and development projects in Canada, the U.S., Mexico, and Peru.

 

Silver ETFs - Investing in ETFs is a third option to diversify one’s portfolio and an inexpensive way to own precious metals. ETFs have become increasingly popular, and the reason is that they are cheaper to invest in compared to other instruments. A number of exchange traded funds are available in Canada, including Global X Silver Miners, Horizons COMEX Silver ETF, and iShares Silver Trust. Global X Silver Miners offers exposure to different companies, including Hecla Mining, SSR Mining, Polymetal International, and Wheaton Precious Metals. Given the fact that the company offers access to a number of mining companies, investors face less risk compared to investing in individual miners. Horizons COMEX Silver ETF is another fund that is listed on the Toronto Stock Exchange and manages over $21 million in assets. The PureFunds ISE Junior Silver ETF is another fund that offers exposure to small cap companies and has investments in the U.S., U.K., and Canada. The fund has a number of holdings, including MAG Silver Corp, SSR Mining, Hudbay Minerals, and First Majestic Silver Corp. Again, exposure to a basket of companies reduces the risk for investors. Headquartered in Toronto, the Sprott Physical Silver Trust is yet another option for those who prefer to invest in physical silver by redeeming units which can be delivered not only in Canada but around the world.

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Canada - The Greatest Mining Jurisdiction in the World

According to the Global Survey of Mining Executives by the Fraser Institute, Canada is a top destination for investment due to factors such as infrastructure, taxation, and regulations.

 

Survey and Results - The survey shows that the most attractive jurisdictions for investors are Quebec, Saskatchewan, Western Australia, Alaska, and Nevada. The top 10 list also includes the Northwest Territories, Yukon, Arizona, Utah, and Chile. Among the least attractive jurisdictions for investment in 2018 are Venezuela, Nicaragua, Panama, and the Dominican Republic. Different factors have been found to have an impact on investment decisions, including political stability, trade barriers, local processing and purchasing requirements, and infrastructure such as electricity and access to roads. Taxation is another factor that has an impact, including capital, payroll, corporate, and personal taxes. Other factors are uncertainty regarding archaeological sites and parks and whether the legal system is adequately administered and fair. The Investment Attractiveness Index is also based on perceptions about the availability of skilled labor force and stability of regulations, and provinces that have the highest scores include Saskatchewan (90.00), Quebec (88.38), Nunavut (80.59), the Northwest Territories (82.46), and Newfoundland and Labrador (82.14).

 

The Best Practices Mineral Potential Index is based on questions regarding political risk, competitive taxation, and regulatory environment. The goal is to establish whether in the view of respondents the mineral potential of countries or regions deters or encourages investment. Top ranking Canadian provinces and territories include Saskatchewan, Quebec, Nunavut, and the Northwest Territories. Countries at the bottom of the list are Nicaragua, the Dominican Republic, China, and Portugal. In terms of global rankings, three Canadian provinces made the top 10 in 2018 – Quebec, New Brunswick, and Saskatchewan. British Columbia ranked 44th due to uncertainty regarding the enforcement and administration of regulations, the legal system, and regulatory duplication. Alberta ranked 16th due to factors such as political stability and community development conditions. Finally, Manitoba ranked 33rd because of uncertainty regarding the enforcement, interpretation, and administration of regulations and taxation.

 

Canada’s Competitive Advantage - Canada is the producer of more than 60 metals and minerals, among which uranium, tungsten, salt, and platinum group minerals. Canada also produces and supplies minerals and precious metals such as nickel, gold, diamonds, cobalt, and aluminum. The mining regions in the country are the Sudbury region for platinum, copper, and nickel, Abitibi for gold, and Labrador Trough for iron. Gold and iron are found in Nunavut, Southern British Columbia is rich in molybdenum, gold, and copper, and Northern Ontario is a mining region for diamonds, zinc, copper, platinum, palladium, and gold. The country exports different commodities, including finished and semi-fabricated products, concentrates, and ores worth close to $92 billion.

 

Other commodities also have potential, including lithium, graphite, and rare earth elements, which can be used in information technology and clean technology. Canada also has close to 7,000 stone quarries and gravel and sand pits and 50 steel mills, refineries, and nonferrous smelters.

 

Canada is a top mining jurisdiction because of factors such as predictability, good regulatory system, competitive taxation, and excellent infrastructure. In addition, the country has a highly skilled workforce across sectors such as logistics, engineering, environmental management, investment analysis, exploration, etc. Canada also takes pride in having national, territorial, and provincial associations with a focus on research and development, efficient infrastructure, and good fiscal environment. Specialized college and university programs are also available. Mining engineering and mining engineering technology programs are offered by institutions such as the University of British Columbia, Queen’s University, Saskatchewan Polytechnic, and McGill University. Research institutes and centres of excellence also operate in Canada. In addition, the country is the home to big venture capital investors such as BCE Capital, Axia Capital Corp, Argo Global Capital, and ARC Financial. The country also has one of the world’s biggest mining stock market, with companies such as Kinross Gold Corporation, Teck Resources, and Yamana Gold listed on the Toronto Stock Exchange.

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