Top 5 gold and silver mining stocks over the past month

These gold and silver miners appear to be heating up:

  • Solitario Exploration & Royalty (XPL). Four-week return: +18.18%. Solitario recently announced its initial NI 43-101 compliant resource estimate for its high-grade Bongará zinc project in northern Peru. The June 23 report showed “Measured and Indicated Resources totaling approximately 2.8 million tonnes grading 13.0% zinc; 1.9% lead and 19.3 g/t silver; or 15.5% zinc equivalent and Inferred Resources totaling approximately 9.1 million tonnes grading 10.9% zinc, 1.2% lead and 12.2 g/t silver; or 12.4% zinc equivalent.” HC Wainwright initiated coverage on the stock after the news and set a price target of $1.80 on the stock (which is currently trading at $1.56).
  • Minco Gold Corporation (MGH). Four-week return: +14.36%. Minco’s stock popped on news that it’s selling its Gold Bull Mountain Project located in Hunan Province, China for total consideration of RMB 7 million (approximately CDN $1.2 million). The company will now “focus on its core exploration properties in Gansu, China and its continued efforts to dispose of its other non-core assets and to diversify its investment outside China.”
  • Revett Mining Company (RVM). Four-week return: +13.59%. Early in June, Revett Mining announced it’s on schedule to resume full production at its Troy Mine in roughly a year. Permitting for the Rock Creek project in northwest Montana also appears to be going well.
  • Tasman Metals Ltd. (TAS). Four-week return: +12.37%. Notes: Tasman’s Norra Karr project contains one of the world’s largest rare earths deposits. The stock has a $1.75 price target in the next 12 months. Tasman’s currently trading at $1.09.
  • Endeavour Silver Corp (EXK). Four-week return: +11.36%. Endeavour, which operates several silver mines in Mexico, reported strong results earlier this month. Silver production in the Second Quarter, 2014 was up 9% to 1,669,609 ounces.

The biggest silver mining stock you’ve never heard of: Revett Minerals Inc. (RVM)

If Revett can satisfy all the environmental concerns at Rock Creek, the stock will surge higher. It’s just a question of when that will happen and how high Revett will rise.

Most gold and silver mining stocks on the major exchanges are well-known among investors. Hecla Mining (HL), Agnico-Eagle (AEM) and Silver Standard (SSRI) are practically household names as are most of the gold and silver mining stocks with a market cap north of $100 million.

There is one AMEX stock that seems to be flying under the radar, though: Revett Minerals Inc. (RVM). Based on the company’s market cap of $126 million, it’s hard to believe they’re sitting on what could be the largest silver mine in the U.S., and one of the top 10 largest silver mines in the world.

The company’s Rock Creek Project in Montana contains an estimated 300 million ounces of silver and 2.5 billion pounds of copper. And, as the company works to get that world-class mine online, they’re already generating steady cashflow from their nearby Troy Mine.

“They have $28 million in the bank, and will generate roughly $30 million in cash flow (from the Troy Mine) every year (assuming silver and copper stay in the range),” writes Jay Arnold at SeekingAlpha. That influx of cash has Revett’s shares currently trading a low P/E of just 12.10.

“In my opinion, RVM’s current price reflects zero value for their giant silver/copper deposit Rock Creek,” Arnold writes. Shares are just trading on the strength of the Troy Mine (which could be operational for the next 20 years).

All this would be illogical, but there is a hurdle. Revett’s Rock Creek project has yet to be fully permitted, even after 10 years of work. If the permits finally go through, Arnold believes the stock could see a “ten-fold increase.”

“We are working to complete a Supplemental EIS (Environmental Impact Study) on the Rock Creek Project to address some NEPA-related issues as directed by the Federal District Court in May 2010,” Revett wrote when it announced its 2011 earnings results on March 27, 2012. “On November 16, 2011, we received a critical decision from the Ninth Circuit Court of Appeals affirming the prior District Court’s favorable ruling regarding challenges brought under the Endangered Species Act (ESA).”

If Revett can satisfy all the environmental concerns at Rock Creek, the stock will surge higher. It’s just a question of when that will happen and how high Revett will rise.

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