Top Silver Stocks ASX: Investing in Precious Metals

Team Veye | 14-Aug-2023 silver stocks asx

History of Silver

Silver was one of the earliest and most primitive precious metals used to make coins. The history says the Romans used silver in this way as early as 269 BC, more than 2000 years ago. Silver is a good conductor of electricity, and it is used in many electrical applications, including switches, contacts, and fuses. Silver is used in household switch contacts. The use of silver dates from the earliest historical records; it was usually extracted by melting galena. The ancient Greeks mined silver from the 6th to the 2nd century BC, enabling them to prosper enormously and build such magnificent structures as the Parthenon and temple of Poseidon. Silver daggers were found on Crete and date back to the early Minoan period, at least 2000 BC. The Romans produced silver from mines, smelters, and refineries in Britain, Sardinia, and Spain, and from many other places, and it became the basis of their coinage. The Rio Tinto (ASX: RIO) mine in Spain produced so much silver that the Phoenicians are said to have thrown away their ships' iron anchors and made new ones out of silver, just so they could load more silver on board. In the 16th and 17th centuries, Spain colonized Central and South America, and eventually there was so much silver being mined there that its value went down and gold overtook it as a basis for coinage. The ASX doesn't have many silver companies. Most companies mine silver as a by-product of producing other metals, for instances, lead, zinc, copper, and gold. Australia accounts approximately 16% of the world's silver resources, with 55% located in Queensland.

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What are ASX Silver Shares?

Basically, ASX silver shares are the companies listed on the Australian stock exchange that are involved in significant exploration, development, and operational activities and are very exposed to the price fluctuations of silver.

Some ASX silver shares offer investors a pivotal role in the price of silver. In particular, some business operations are highly dependent on some form of silver production. So their share prices are integrally connected to the price of silver. Buying shares in a critically focused silver company is often recognized as on par with investing in the underlying commodity itself. The correlation between silver prices and the ASX silver shares of company’s profitability is strongly positive. Investors highly concentrate on the price outlook of silver before investing in an ASX-listed silver-based firm. There are some renowned names in large-cap ASX silver shares, as follows:

•    Newcrest Mining Limited (ASX: NCM)
•    OZ Minerals Ltd (ASX: OZL)
•    Sandfire Resources Limited

Are ASX Silver Shares a Good Investment?

There is an old saying that says, never put all the eggs in the same basket; in case the basket falls, all will be broken at the same time. Commodities like silver provide a diversification opportunity for many investors, giving them exposure to different sectors of the economy. This is a particularly good way to diversify one’s portfolio because many commodities perform very differently from the stock market.

Particularly in commodities, precious metals like silver and Gold tend to preserve their value in an economic downturn. It is wise to allocate a proportional investment in ASX silver shares to the portfolio that enables protection from extreme downside risk during the correction phase in the market.

Benefits of Investing in Silver Stocks

Silver stocks, which are companies actively involved in the production of precious metals, have immense potential to provide several advantages when someone tends to create a portfolio. This gives the benefit of a diversification opportunity as metal prices like silver have negative as well as positive correlations with many other asset classes in the portfolio, which in turn neutralizes the risk. The inflationary risk, which reduces the internal rate of return in the portfolio during the low interest rate regime; during this particular period, silver prices rise exponentially, which in turn creates a better outlook for ASX silver shares that benefit from the ASX share price rise and reduces the inflationary impact. Silver has many industrial applications and is used in many sought-after technologies, like touch screens, solar panels, and even water purification. High demand for silver from a number of different industry segments helps stabilize its price.

Top Silver Stocks on ASX?

There are top silver shares currently trading on the ASX. Companies in the ASX metals and mining category produce silver, in addition to other commodities. ETFs like Global X Physical Silver are also silver shares. Here are some examples of ASX silver shares with different market capitalizations.

Newcrest Mining Limited (ASX: NCM)

Newcrest Mining Limited (ASX: NCM), with a market capitalization of $23.12 billion and a current market price of $25.85 (as of 11 August 2023),is involved in exploration, mine development, mine operations, and the sale of gold, and copper.

Newcrest has entered into an option and earn-in agreement with Gunpoint Exploration Limited to acquire up to 75% of the Appaloosa property situated in Nevada, USA. Appaloosa is an underexplored mineralized structural zone situated within Gunpoint's Talapoosa gold-silver project. During 2022, Newcrest Mining Limited undertook target definition work; Drilling at Appaloosa began in April 2023, with an initial focus on surface geochemical and geological targets generated during the CY2022 field programme. So far, six holes for 1,900 metres of DD have been accomplished, with partial assays returned for all six holes.

OZ Minerals Ltd (ASX: OZL)

OZ Minerals Ltd. (ASX: OZL), with a market capitalization of $9.51 billion and a current market price of $28.19 (as of 11 August 2023) is a copper-oriented international mining company based in South Australia. The company has stakes in the Prominent Hill Project, the Carrapateena Project, the West Musgrave Project in Australia, and various other projects in Brazil.

On 2 May 2023, BHP Group Limited reported the completion of OZ Minerals Limited’s acquisition and the implementation of the scheme of arrangement for Lonsdale investments pty Limited, a wholly owned subsidiary of BHP Group, to acquire 100% of the shares in OZ Minerals Limited. 

Sandfire Resources Limited (ASX: SFR)

Sandfire Resources Limited (ASX: SFR), with a market capitalization of $2.97 billion and a current market price of $6.47, is actively engaged in the production and sale of copper concentrate containing gold and silver by-products from the 100% owned DeGrussa operations in Western Australia. 

the evaluation and development of the Motheo copper mine and Motheo expansion project in Botswana; The company's America Inc.'s high-grade copper project in Montana,US; and the exploration, evaluation, and development of mineral tenements and projects in Australia and overseas, including investment in early-stage mineral exploration companies.

On 10 August 2023, The Company approved the development of the Motheo Copper Mine in December 2020 and first copper concentrate was produced less than three years later, in May 2023. 

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Frequently Asked Questions (FAQ)

What are the best stocks for silver?

There are some renowned names in large-cap ASX silver shares as well as in small-cap ASX stocks categories, as follows: Newcrest Mining Limited (ASX: NCM); market cap $23.12 billion (1 year YTD return of 34% as of August 11, 2023). OZ Minerals Limited (ASX: OZL), market cap $9.51 billion (1 year YTD return of 17.61% as of August 11, 2023), and Sandfire Resources Limited (ASX: SFR), market cap $2.97 billion (1 year YTD return of 34.25% as of August 11, 2023). Renegade Exploration Limited (ASX: RNX); market cap: $11.44 million (1 year YTD return of 71.43% as of August 11, 2023). Venturex Resources Limited (ASX: VXR) has a market cap of $397.61 million (1 year YTD return of 541.31% as of August 11, 2023).

Who is the biggest silver producer in Australia?

Newcrest Mining Limited (ASX: NCM) has been positioning itself as the number one silver mining company listed on the Australian Stock Exchange as of August 2023, with a market capitalization of over $23.12 billion. Situated in Melbourne, Australia, Newcrest Mining is currently in the top three leading gold, silver, and copper mining companies by market cap listed on the Australian exchange.

Is there silver ETF on ASX?

Till now, the exchange-traded fund (ASX ETF) Physical Silver (ETPMAG) is the only ASX-listed ETF that tracks the physical price of silver.

Which are the Australian companies mines silver?

Australia contains a heavy resource base of silver, and there are particular ASX silver companies producing silver massively, such as Newcrest Mining Limited (ASX: NCM), whose market cap is $23.12 billion, which is the largest silver producer based out of Australia. Other silver mining companies in Australia are OZ Minerals Limited (ASX: OZL), with a market cap of $9.51 billion, and Sandfire Resources Limited (ASX: SFR), with a market cap of $2.97 billion.

How do I buy silver?

Buying silver is absolutely dependent on an individual's preference, but as part of that opinion, someone may invest in silver in different ways: one is through physical bullion, and the other is through direct investment in a silver-producing ASX stock. Bullion is a more direct way to own silver; securities are easier to hold and can reap benefits eventually. Silver offers a long-term hedge against inflation and stocks.

Why Silver stocks have potential to skyrocket?

There has been a common mindset embedded that overlooked silver in favour of its lustrous cousin gold, but the price of silver had an exponential move over 70% in the year 2021 and a 1-year return YTD of 10% as of August 11, 2023. Commodity strategists predict that the rally will probably continue as the global economy reopens again. Demand for the precious metal has rebounded in the past 12 months. Demand for silver comes equally from both industry and investment. Industrial demand could potentially enhance silver's ability to outperform gold in the long run.


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