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About the Industry
The Zacks Mining - Silver industry comprises companies that are engaged in the exploration, development and production of silver. These include big and small players operating mines of widely varying types and scales. Silver-bearing ores are mined by open-pit or underground methods, and then crushed and ground. Miners continually look for opportunities to expand their reserves and resources through targeted near-mine exploration and business development. They strive to upgrade and improve the quality of their existing assets, internally and through acquisitions. Only 20% of silver comes from mining activities, wherein silver is the primary revenue source. The balance comes from projects, wherein silver is a by-product of mining other metals, such as copper, lead and zinc. Thus, several companies in the silver mining industry are engaged in mining other metals as well.
What's Shaping the Future of the Mining-Silver Industry?
Strong Demand Outlook: Per the Silver Institute, total silver demand is expected to dip 1% to 1.148 billion ounces in 2025. Industrial use continues to dominate, with demand projected at around 677.4 million ounces in 2025, accounting for 59% of the total demand. The solar energy industry continues to be a major driver. Silver consumption in photovoltaic applications has surged in recent years, fueled by the rapid expansion of solar technology, improvements in solar cell design and the global transition toward renewable energy. Silver demand in electrical and electronic applications remains supported by the rising usage in 5G infrastructure, electric vehicles and consumer electronics. Coin and net bar demand is expected to gain 7% this year to 204.4 million ounces, recovering after two years of weakness. Demand for jewelry is, however, expected to be down 6%, reflecting low demand amid high prices.
Ongoing Rally in Silver Prices: Silver prices gained around 22% in 2024 and an impressive 41% so far this year. Prices have been supported by several factors, like rising economic and geopolitical uncertainties as well as solid demand amid expectations of a tight supply. Earlier this month, silver prices surged above $40 an ounce for the first time since 2011. This was fueled by market expectations for U.S. Federal Reserve rate cuts.
Persistent Demand-Supply Gap: Global silver supply is projected to rise 2% in 2025, reaching 1.031 billion ounces. However, with projected demand figures still higher, the market is expected to face a deficit of 117.6 million ounces, suggesting that it is headed for its fifth consecutive year of shortfall. Even though production is expected to be higher on a year-over-year basis this year, the 2025 production forecast of 835 million ounces is much lower than the 900 million ounces in 2016. This is due to lower ore grades, limited new project development and operational challenges. Considering this backdrop, while demand continued to rise, this gap will widen, which will provide long-term support for silver prices.
Efforts to Combat Inflationary Costs to Aid Margins: Industry players are facing escalating production costs, including electricity, wages, water and materials. Mining companies are major consumers of energy, with around 50% of their production costs closely linked to energy prices. A shortage of skilled workforce spiked wages. With no control over silver prices, the industry must focus on improving its sales volumes while being cost-effective. Players are investing heavily in R&D and resorting to technological innovations required at almost every level of operation to increase efficiency, sustain growth and rein in costs.
Zacks Industry Rank Indicates Bright Prospects
The group's Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates bright prospects in the near term. The Zacks Mining - Silver industry, a 10-stock group within the broader Zacks Basic Materials sector, currently carries a Zacks Industry Rank #31, which places it in the top 13% of 245 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
Before we present a few Mining-Silver stocks that can be retained in one’s portfolio, it is worth taking a look at the industry’s stock-market performance and valuation picture.
Industry Versus Broader Market
The Mining-Silver Industry has outperformed the sector and the Zacks S&P 500 composite over the past year.
The stocks in this industry have collectively gained 64% in the past year compared with the Basic Material sector’s 7.1% rise. Meanwhile, the Zacks S&P 500 composite has risen 18.8%.
Industry's Current Valuation
Based on the trailing 12-month EV/EBITDA ratio, a commonly used multiple for valuing silver-mining companies, we see that the industry is currently trading at 12.07X compared with the S&P 500's 17.79X and the Basic Material sector's trailing 12-month EV/EBITDA of 13.86X. This is shown in the charts below.
Over the past five years, the industry has traded as high as 31.20X and as low as 7.74X, the median being 14.89X.
3 Mining-Silver Stocks to Buy
Fresnillo: The company’s silver production was down 11.7% year over year to 24.9 million ounces in the first half of 2025, due to the cessation of mining activities at San Julián DOB. Gold production was 313.8 koz, which marked a 15.9% year-over-year increase mainly due to the optimization of mine operations, mainly at Herradura. The company continues to expect total silver equivalent production at 91-102 million ounces in 2025. Silver production expectations have been lowered to reflect the adjustment for the Silverstream buyback. Gold production guidance has been increased to reflect the improved performance at Herradura. The company is advancing its metallurgical and underground mining optimization projects, along with the ongoing analysis of brownfield projects, to further enhance the production platform and cost base for the 2026-2030 period. It is also progressing with its greenfield projects, Rodeo, Tajitos, Orisyvo and Guanajuato. FNLPF’s high-quality assets, ample mineral resources, competitive margins and disciplined approach to development will continue to drive growth. The company's shares have gained 54.4% in the past three months.
The Zacks Consensus Estimate for Mexico-based Fresnillo’s 2025 earnings has moved up 4.5% in the past 90 days. The consensus estimate indicates year-over-year growth of 219%. FNLPF currently carries a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Avino Silver Mines: The company recently regained full ownership of its La Preciosa project through the purchase of previously-granted royalties. La Preciosa is one of the largest undeveloped silver deposits in Mexico and is expected to play a significant role in ASM’s target to become an intermediate silver producer in Mexico. Its proximity to the Avino‘s mine and infrastructure could yield numerous financial and operational synergies. First production is expected by the end of 2025 with significant ramp up in the coming years. In the first half of 2025, ASM produced 1.32 million silver equivalent ounces, up 6% year over year. The company remains on track to achieve its targeted production range of 2.5 - 2.8 million silver equivalent ounces in 2025. The company’s strong cost-control measures are expected to continue to aid its margins. ASM shares have gained 20.8% in the last three months.
The Zacks Consensus Estimate for this Vancouver, Canada-based company’s 2025 earnings has moved up 37.5% over the past 90 days. ASM has a trailing four-quarter earnings surprise of 141.7%, on average. Avino Silver Mines currently carries a Zacks Rank of 2.
Hecla Mining: The company reported record revenues of $304 million and record adjusted EBITDA of $132.5 million as well as a record cash flow of $103.8 million in the second quarter of 2025. Hecla Mining produced 4.5 million ounces of silver and 45,895 ounces of gold, an increase of 10% and 34%, respectively, compared with the prior quarter. This was driven by upbeat performances at its mines. The Lucky Friday mine established a new quarterly milling record of 114,475 tons, beating the prior record by 5% set in the prior quarter. The company projects silver equivalent ounces to be in the band of 35.5 - 39.0 million for 2025. HL continues to strengthen the balance sheet with a focus on the highest risk-adjusted return projects and free cash flow generation. It is evaluating strategic alternatives for Casa Berardi. The company is striving to drive operational excellence through automation and advanced analytics and advancing Keno Hill's permitting and infrastructure to achieve sustained profitability. HL shares have appreciated 41.2% in the last three months.
The Coeur d'Alene, ID-based company has a trailing four-quarter earnings surprise of 35.8%, on average. The Zacks Consensus Estimate for HL’s fiscal 2025 earnings indicates year-over-year growth of 145%. The estimate has moved up 69% in the past 90 days. HL currently carries a Zacks Rank of 2.
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This article originally published on Zacks Investment Research (zacks.com).
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