Silver Mine Stocks Prove There Is Life After The Conquistadors

There is a lot of debate as to whether silver mine stocks or gold mine stocks will do better in the upcoming year. Simply looking at the underlying fundamentals of the precious metal markets would seem to indicate that they should track each other fairly closely. Yet silver has a number of subsidiary uses that make it an industrial metal play as well as a member of the more prestigious precious metals group.

Silver Mining Stocks in Mexico

Silver has been mined in the Western Hemisphere for nearly five hundred years and yet these areas still contain some of the richest silver mines on the planet.  Mexico has always been a major silver producer. While the country continues to make headlines for its raging drug wars in the northern areas, Mexico continues to have a stable government and most of its most profitable mines are located in areas far away from the violence. Among the many silver mine stocks from Mexico, Fortuna Silver Mines, FSM: NYSE, offers a bonus in its large percentage of gold produced as a byproduct of its normal silver extraction operations.

South American Caveats

Regime change in South America has put a damper on several previously profitable mining ventures. Peru has made investors nervous by electing a government that came to power by specifically scapegoating the mining industry. On the other side of the Andes Mountains, Argentina has abrogated its previous promise of 30-year stability with regard to mining taxes. For this reason, many investors are sitting on the fence until the picture becomes settled one way or the other.

The Pure Play in Silver Mine Stocks

Largely unknown Silver Wheaton Corporation, SLW: NYSE, not only produces 23 million ounces of silver annually from its own mines, but it has also built up a series of business relationships that allow it to act as selling agent for the output of a number of other mines located all over the world. These operations add an additional 20 million ounces of silver to its sales every year and significantly protect the company from the economic decline of any particular mining region, as well as insulate it from the potential for political interference that can wipe out regional silver mine stocks.

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