How to buy or sell silver mining stocks

Silver stocks create an alternative route for traders and investors looking to trade the precious metal. Discover how you can start buying and selling silver mining stocks today.

What are silver stocks?

Silver stocks are the shares of publicly-listed companies involved in the exploration of and mining for the precious metal.

Trading on the price of silver stocks has become a popular way of getting exposure to the metal without entering the commodity market, which can require knowledge of futures contracts.

Instead, silver stocks have a relationship with the precious metal because silver is their main product – the higher the price of silver, the greater the revenues for mining companies, and vice versa. However, it’s important to remember that it’s not a one-to-one ratio, as other factors impact a silver stock’s price outside of the spot price of the metal.

For example, a lot of silver companies will have a diverse business model, mining other metals, such as gold, copper and platinum. This can provide some protection from the volatility of silver markets, but it also creates an exposure to the price of the other commodities.

Silver is known for its huge range of industrial applications thanks to its ability to conduct electricity and heat. This means that more than half the demand for the metal comes from the industrial sector – so any changes in output can hit the price of silver and the prices of silver stocks. The health of the economy can therefore be a good leading indicator for how silver stocks will perform 5. further down the line.

When you trade silver stocks with CFDs, you’ll be able to go long or short on their market price. This means you can speculate on whether you think a silver stock is going to rise or fall.

Best silver miner stock

The best silver miner stocks will come down to your personal goals. If you’re looking for strength and stability, you might consider going for one of the biggest silver stocks by market cap, or one that pays dividends for additional income streams.

A lot of these different categories for selecting stocks will have some overlap, but let’s explore all the silver stocks you might want to watch.

Biggest silver stocks

It’s important to note that just looking at valuation isn’t necessarily the best way to choose silver stocks, given that these large firms aren’t pure-play silver businesses. A lot of them will have a diversified approach.

But, just looking at global silver companies by market capitalisation (as of September 6, 2023), the biggest silver stocks are:

1. Wheaton Precious Metals - $18.96 billion
2. Royal Gold - $7.10 billion
3. Pan American Silver - $5.63 billion
4. Merdeka Copper Gold - $5.39 billion
5. Fresnillo - $5.09 billion

1.         Wheaton Precious Metals

Wheaton Precious Metals is the largest silver and gold streaming company in the world by revenue, which is split evenly between the two precious metals.

Previously, the company was called Silver Wheaton, however, it changed its name in 2017 to emphasise its diversified precious metals business. Although silver does still make up a significant portion of its portfolio, the company has been more focused on gold in recent years.

Wheaton expects that silver streams will only account for 40% of its production mix as its gold and cobalt business grows between 2022 and 2032.

As a streaming company, Wheaton Precious Metals has agreements in place that give it the right to purchase silver at a fixed cost from several high-quality mines across the world. This means the relationship between the silver spot price and the company’s shares works a little differently. For example, in market downturns when miners are strapped for cash, streaming companies can benefit through deals with the struggling miners.

2.         Royal Gold

Royal Gold is also a precious metals streaming company. It has a large portfolio of high-quality, long-life mines that produce gold and other precious metals – including silver.

Unlike Wheaton Precious Metals, its revenue exposure is skewed more dramatically toward gold. So, although it’s still considered a silver stock, it’s not going to move in the same way as gold has a heavier influence on its portfolio.

3.         Pan American Silver

Pan American Silver controls the largest silver reserves after it acquired Yamana Gold in 2023. The move boosted Pan American’s silver production by 50% and doubled its gold output as well.

The company owns silver and gold mines throughout Canada, Mexico, Peru, Argentina and Bolivia. In these locations, Pan American Silver boasts several medium and long-term projects that will expand its silver production for years to come – including the MARA project in Argentina and returning to its Escobal mine in Guatemala.

4.         Merdeka Copper Gold

Merdeka Copper Gold is a producer of gold, silver, copper and other minerals based in Indonesia. It also specialises in the industry and wholesale trade of these metals.

As of 31 December 2022, group Mineral Resources is estimated to contain 79 million oz of silver, 35.2 million oz of gold, 8.4 million tonnes of copper, and 13.8 million tonnes of nickel.

A 4 million tonnes per annum oxide heap leach operation – which aims to recover copper - was commissioned in Q1 2017. But this mine is expected to produce approximately one million ounces of gold, alongside a significant amount of silver over its 9-year mine life.

5. Fresnillo

Fresnillo is the biggest silver ore producer in the world as of 2022, producing 51.1 million ounces of silver. It was a subsidiary of Mexican mining company Industrias Penoles until it was spun off as a standalone company on the London Stock Exchange. It is still headquartered in Mexico City.

Currently, Fresnillo exclusively operates mines in Mexico, made up of Fresnillo, the world's largest primary silver mine, and Cienega and Herradura, both primarily gold mines. However, the company is currently undertaking exploration projects in Peru and Chile. It’s growing its exploration budget to understand both the opportunities it hasn’t tapped and the grade of silver within its currently owned projects.

Best silver mining stocks UK

Although there aren’t as many large UK silver miners as there are in the likes of the US and Canada, the London Stock Exchange is home to a few large producers, including:

1. Fresnillo
   Fresnillo is the UK’s largest mining stock. As we’ve already seen, it’s headquartered in Mexico City, is listed on the LSE and trades on the FTSE 100 index.
2. Hochschild Mining
   Hochschild is a British-based silver mining operator, which is one of the leading precious metal miners in the world. It has four underground mines in Peru and Argentina.
3. Polymetal International
   Polymetal International is an Anglo-Russian precious metals company that is listed on the London Stock Exchange. It’s a top-10 global gold producer and top-5 silver producer. Neither the company nor its subsidiaries have been sanctioned by the UK or EU for its ties to Russia.

Best silver stocks with dividends

Of the stocks listed so far, the two silver stocks with the best dividend yields are:

1. Pan American Silver – dividend yield of 2.59% at the time of writing. The company has consistently paid dividends for the last 13 years
2. Fresnillo – dividend yield of 2.16%, at the time of writing. It pays two dividends each year

Wheaton Precious Metals and Royal Gold do pay dividends, at 1.43% and 1.36% respectively.

Silver miner ETFs

It’s also possible to get exposure to silver with a silver miners ETF, which will hold a basket of securities involved in the industry – whether that’s acquisition, exploration, development or production.

Popular silver miners ETFs include the Global X Silver Miners ETF – which looks at silver mining stocks - and ETFMG Prime Junior Silver Miners Fund, which is focused on smaller cap mining stocks.

How to trade silver stocks

With City Index, you can buy silver stocks (go long) and sell them (go short) using CFDs. Follow these steps to get started:

1. Open your City Index account and add some funds
2. Log in to our award-winning Web Trader platform or download our mobile trading app
3. Search for any of the stocks listed above
4. Choose to buy silver stocks to go long, or sell to go short

Alternatively, you can buy and sell our full selection of stocks – plus indices, forex, commodities and more – with a City Index demo account, which gives you virtual funds to try out trading on live markets with zero risk.