Are these the best ASX silver stocks to watch? [2023]

Discover some of the most popular silver mining companies on the ASX

Data as of 28 November 2023. Source: Stake, Google Finance.

These are predominantly smaller companies and many at an earlier stage of production. Their share prices are more likely to have rapid short-term changes compared to larger firms with established operations.

*The list of shares mentioned is ranked by market capitalisation. When deciding what dividend shares to feature, we analyse the dividend yield, consistency of dividend payouts, financials, recent news, the state of the industry, and whether or not they are actively traded on Stake.

Find the best silver stocks to watch

1. Adriatic Metals Plc ($ADT)

Market Capitalisation: $756m

Stock price (as of 28/11/2023): $3.210

Stake Platform Bought / Sold (1 Jan 2023 - 28 Nov 2023): 57% / 43%

Adriatic Metals plans to bring the Vares Silver Project into production in Bosnia and Herzegovina by late 2023. Zinc, lead and barite were previously mined at their Veovaca and Rupice deposits in the 1980s. The team's looking at ways to extend the life of the Vares Project and at a possible expansion with the Rupice Project about 12 km away.

They're also constructing a nearby processing facility to produce silver,lead and zinc materials that can be exported. The Vares Silver Project is at a relatively advanced stage, whereas Adriatic is still open to further silver exploration. They also own a potential zinc-silver asset in neighbouring Serbia, the Raska Project.

🆚 Compare ADT vs SVL→

2. Silver Mines Limited ($SVL)

Market Capitalisation: $239m

Stock price (as of 28/11/2023): $0.165

Stake Platform Bought / Sold (1 Jan 2023 - 28 Nov 2023): 67% / 33%

Silver Mines has purchased the Bowdens Silver Project near Mudgee in central New South Wales. The Bowdens Project is considered to be the largest undeveloped silver deposit in Australia. Together with the neighbouring Barabolar Project the company has consolidated land holdings of 2,007km.

A 2018 feasibility study indicated that Bowdens Silver Project could be responsible for producing 3.4m ounces of silver annually. Together with roughly 6,900 tons of zinc and 5,100 tons of lead at steady-state production. Due to the high-grade silver at the site, the initial silver production levels could be higher. They've recently raised $18m from investors for further development.

3. Investigator Resources Ltd ($IVR)

Market Capitalisation: $57m

Stock price (as of 28/11/2023): $0.043

Stake Platform Bought / Sold (1 Jan 2023 - 28 Nov 2023): 66% / 34%

Investigator Resources Limited is a metals exploration company focused on South Australia's Gawler Craton. The Paris Silver Project in the Eyre Peninsula is the firm's high-grade silver asset. The team has established an industry-standard JORC Resource for the Paris Project that details the plausible amounts of silver, gold and lead in the deposit.

They recently finalised an agreement with traditional landowners that will allow further drill programs to take place. Investigator's team has put these activities in place with funds from a share placement and the results from the drilling will determine future plans. 

4. Manuka Resources Ltd ($MKR)

Market Capitalisation: $25m

Stock price (as of 28/11/2023): $0.042

Stake Platform Bought / Sold (1 Jan 2023 - 28 Nov 2023): Not available

Silver and gold producer Manuka Resources listed on the ASX in 2020. The team restarted operations at the Wonawinta silver and base metals project in the Cobar Basin of central New South Wales. They've been focused on silver processing operations of existing materials to help raise funds for future mining plans.

The firm is also awaiting the final details of a strategy to recommence operations at the nearby gold mine, Mount Boppy. They have another asset in New Zealand that's a potential vanadium and titanium mine but are currently one of the few ASX silver stocks that could derive the majority of its earnings from silver output.

5. Boab Metals Limited ($BML)

Market Capitalisation: $25m

Stock price (as of 28/11/2023): $0.140

Stake Platform Bought / Sold (1 Jan 2023 - 28 Nov 2023): 69% / 31%

Boab Metals has capitalised on its silver exploration in Western Australia's Kimberley region. The team is focused on plans to develop its flagship Sorby Hills lead-silver-zinc project. The company has also acquired the Manbarrum Zinc-Lead-Silver Project, which is only 25 km east of Sorby Hills.

The team has put the numbers together for the Sorby Hills Project and a final decision on whether to make the investment to build the silver mine is expected in 2023. Many permits are already in place for silver production and Sorby Hills would benefit from the existing mining infrastructure in the region, being located only 50 km northeast of Kununurra.

How to invest in silver stock in Australia?

The main way of investing in silver is through silver miners and producers listed in Australia, using an online investment platform.

1. Open a stock investing account

To invest in silver shares and ETFs, you'll need to sign up to an investing platform with access to the ASX and Cboe Australia. Lucky for you Stake has access to both stock exchanges.

2. Fund your account

Complete an application with your personal and financial details. Fund your account with a bank transfer, debit card or even Apple/Google Pay.

3. Search for silver shares or ETFs

Find the asset by searching for the name or ticker symbol. Do your own research to ensure it is the right investment product for your own circumstances.

4. Choose an order type and buy the asset

Buy on any trading day with a market, limit or stop order. Look into dollar cost averaging to spread out your risk, which smooths out buying at consistent intervals.

5. Monitor your investment

Optimise your portfolio by tracking how the security performs with an eye on the long term. You may be eligible for dividends and shareholder voting rights that affect your shares.

What are the best performing silver stocks on the ASX?

Data from the Silver Institute shows that only 27% of silver comes from mines where the metal is the primary source of revenue. This means for 73% of projects, the revenues and associated stock performance will also be influenced by the prices of other commodities mined.

Some companies are more successful than others, so it's not an exact comparison. While major miners such as BHP Group ($BHP) sell silver, it’s a relatively small part of their metals portfolio. The Australian silver miners listed above have higher exposure to silver.

Silver supply and demand

According to the Silver Institute's data, the levels of global demand for silver have been relatively close to supply levels in recent years. Despite having a market deficit for the past two years, there are no major shortages. While known as a precious metal, just under half of the total demand for the 'white metal' comes from industry and is a major point of differentiation from gold.

Its industrial uses are mainly due to the metal being an efficient conductor of electricity, very sensitive to light and easy to mould into various shapes. Silver is widely used in electronics, including solar panels, LED lighting, flexible displays, touch screens, mobile technology and RFID tags. It's often used in the form of silver membrane switches, which allow buttons to work in human-machine interfaces in devices such as remotes and keyboards.

Silver is also valued in healthcare applications as it has antimicrobial properties and can be used for water purification. Its use in jewellery is due to being a rare, relatively tough metal, with anti-tarnish qualities. Silver is still seen as a store of value and demand for bars and coins has grown in the past two years. This source could be influential in the future if volatility in the stock market continues.

The levels of silver mining production could be affected by events in a few countries. Mexico is the world's largest silver producer. Together with Peru and Chile, these three nations accounted for 42% of total production in 2021. Nearly 82% of silver supply comes from mines and the rest is mostly sourced from recycling. Declines in mine output, especially from these countries, could potentially lead to silver shortages.

💡Related: Gold stocks ASX: Top 10 gold mining companies→

💡Related: Nickel stocks on ASX→

Benefits of investing in silver stocks

Investing in silver stocks can provide exposure to a unique opportunity, as silver has characteristics of both industrial and precious metals. This means that demand could expand in both periods of slower and rapid economic growth.

During a downturn investors often turn to precious metals as safe haven assets. Silver is often considered a inflation hedge asset and can be used to diversify a portfolio. Similar to gold, it's a physical asset that's been used as a store of value for centuries and can be readily exchanged for cash.

Industrial activity increases when businesses are more confident about the future of the economy and expect better returns on their investments. Silver is used in various technologies that could see considerable growth in the longer term. These include photovoltaic (PV) cells used in solar panels, electronics systems in EVs, circuits and other devices essential to 5G technology.

Silver stocks FAQs

What silver ETFs in Australia can I invest in?

There aren't any traditional silver ETFs, but there are two options that allow ASX investors access to silver prices. The Global X Physical Silver ($ETPMAG) product is an exchange-traded commodity instrument that invests in real silver bullion bars that are securely kept in a London vault. Each share entitles the holder to an amount of physical silver bullion held by the custodian JPMorgan Chase Bank, N.A. in London.

The product tracks the silver price and could give investors a return equivalent to its movements in Australian Dollars after the management fee of 0.49%. Annualised returns for the past five years have been 7.07%, but only 0.22% for the ten years prior to March 2023. It's a different option to the silver mines usually seen in ASX silver shares and instead it offers closer exposure to the silver price.

The Global X Physical Precious Metals ($ETPMPM) Basket product follows the same concept for several precious metals. It gives access to gold, silver, platinum and palladium. Gold has the largest allocation at 52.4%, and silver at 18.8% of the total. For other precious metals funds, check out our list of gold ETFs.

Are ASX silver shares a good investment?

Australia's in the global top ten silver producers and mining companies from various locations have made the ASX their home. The performance of ASX stocks with exposure to silver could depend on many factors. The journey of a mine from the exploration stage to eventually reaching production can have many ups and downs over the years.

Some more experienced investors like to use the gold-silver ratio as a signal for whether it's time to buy or sell a particular metal. It refers to how many ounces of silver are required to buy one ounce of gold. The main idea is that a high gold-silver ratio favours buying silver, as it's relatively cheap and it's better to buy gold at a low ratio for the same reason - an attractive gold price. The number has varied significantly in recent years and is much more volatile than when they were used as monetary metals.

Who is the biggest silver miner in Australia?

The Cannington Project in Queensland is one of the world's primary silver mines. The South32 ($S32) operation produced 12.94m ounces of silver in FY22, alongside some nickel and lead sales. The Mount Isa Zinc Mine, owned by Glencore and Aeris Resources' ($AIS) Tritton Copper Mine both produce significant amounts of silver as a by-product.

This does not constitute financial product advice nor a recommendation to invest in the securities listed. Past performance is not a reliable indicator of future performance. As always, do your own research and consider seeking appropriate financial or taxation advice before investing.