Silver and gold miner stocks Endeavor Silver ( EXK 1.44% ) rose sharply during the first hour or so of trading on Thursday, trading as much as 15.5% higher. As of 11:21 a.m. EST, the stock held most of those gains, up about 15%. The main driver of this share price increase was the release of the company’s third quarter results.
Endeavor Silver revenue increased 29% year over year in the third quarter. The mining company’s production rose 2% on a silver equivalent ounce basis, but it actually sold 11% less silver and 4% less gold in the quarter. The strong increase in revenue was the result of a significant improvement in selling prices realized by Endeavour: silver prices were up 43% year-over-year, while gold was up 31%. Costs, meanwhile, were lower due to improved performance in key mining operations.
Ultimately, Endeavor’s results improved from a loss of $0.05 per share in the third quarter of 2019 to breaking even in the quarter just reported. While it would have been nicer to see robust earnings numbers at a time when silver and gold prices are high, breaking even is still much better than bleeding red ink. . That said, it’s also worth noting that Thursday morning’s stock price gain was helped by a jump in silver and gold prices in early trading. Still, overall it was a good quarter for Endeavor and the market drove the stock up as expected.
Precious metal prices have always been volatile, often dramatically. The year-over-year swings in gold and silver prices that boosted Endeavor’s revenue are prime examples of this. Before jumping into the stock, it is therefore important to remember that their prices can go down just as easily as they go up. It’s probably best for most investors to think of miners as a way to add precious metals exposure to their portfolios for diversification purposes, not as stocks to trade for the purpose of timing the highs and lows. silver or gold. In other words, you shouldn’t read too much about Endeavor Silver’s price gain on Thursday.
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