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New Mill Reaches 85% of Design Capacity
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Meanwhile, the precious metals markets were down slightly, in June, noted an Atrium Research report.

MAG Silver Corp. (MAG:TSX; MAG:NYSE American) and its joint venture partner Fresnillo achieved commercial production at their Juanicipio project in Mexico on June 1, 2023, and the new mill has been operating at 85% of its 4,000 tons per day capacity, reported Atrium Research analyst Ben Pirie in a July 4 research note. 

Healthy consolidation

During the month, the gold and silver markets were down a bit, Pirie reported. The gold price dropped 2.2% to $1,919.10 per ounce, and the silver price decreased even more, 3.1%, to $22.80 per ounce. Mining equities fell some, too. The GDX declined 2.9% and underperformed broader markets. For instance, in comparison, during June the S&P 500 rose 6.3% and the Toronto Stock Exchange increased 3%.

As for some other commodities, the copper price rose 2.8% to $3.70 per pound. The battery metals space mostly stayed flat. Lithium maintained its 68% gain in May and went up another 3%.

"We believe the last two months of consolidation for precious metals and other commodities is healthy considering the significant increase in prices since November 2022," Pirie wrote.

Decline in M&A

The analyst also pointed out that mergers and acquisitions activity in the metals space slowed during June, likely due to the uncertainty around interest rates. In June the Bank of Canada raised the interest rate 25 basis points to 4.75% whereas in the U.S., the Federal Open Market Committee let the existing rate stand.

Economics were strong in both countries during the month, but despite lower inflation numbers being reported, inflation stayed high.

Precious metals attractive

As such, Echelon expects the Bank of Canada will again boost the interest rate another 25 basis points in July.

Given the economic backdrop, "gold and silver continue to look highly attractive," Pirie wrote. "We believe the stickiness of inflation and continued rate hikes will increasingly push investors to gold as a safe-haven asset in 2023."

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Important Disclosures:

  1. MAG Silver Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
  2. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
  3. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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Disclosures for Atrium Research, Mining Monthly, June Edition. July 4, 2023

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