Silver and Endeavour Silver Corp – New Recommendation

by JDH on March 31, 2007

In an effort to diversify away from uranium, and to make money, I’m going to increase the silver stock component of my portfolio. I think silver is poised to move higher. Here’s the chart from kitco silver.

Click to Enlarge

Obviously silver has been trending higher since the low of $9.72 on June 14, 2006, although it is still down from the 20 plus year high of $14.94 reached on May 12, 2006. The current price is $13.32, so a close above $14.94 would be very bullish.

I already own PAA.TO – Pan American Silver Corp. (8% of my portfolio) and SSO.TO – Silver Standard Resources, Inc. (6% of my portfolio), and they have both been good performers. I believe it is now time to start accumulating more silver stocks, for both technical and fundamental reasons (the chart looks good, and silver is in demand).

The stock I have picked to add to my portfolio is EDR.TO – Endeavour Silver Corp. Here’s why:

First, Endeavour Silver Corp. is traded in Toronto, Frankfurt, and the AMEX (EDR : TSX, EJD : FRANKFURT and EXK : AMEX).

Second, it’s a small-cap silver mining company focused on the growth of its silver production, resources and reserves in Mexico. According to their web site, “the expansion plan now underway at the high grade, Guanacevi mines project in Durango should propel Endeavour into the ranks of the top 5 primary silver producers in the world.”

Third, also from their web site, ” Endeavour stands out from other primary silver companies for its high silver grades (+15 oz. per ton), its high silver leverage (+90%), the substantial exploration upside of the Guanacevi mines project (+30 million oz), the potential capacity of the Guanacevi plant and the organic growth potential of these core assets.”

Finally, I like the chart:


The MACD and RSI indicators look good, and despite the recent pullback the up trend lines are still in place.

I have my eye on some other silver stocks as well, so stay tuned for more recommendations as they get to good buy-points.


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