Investors who have followed the investing moves of famed commodities investor Eric Sprott over the past few years are well aware of the man’s penchant for physical gold and silver. Along with many other seasoned, well-respected investors, he is a fervent long-term precious metals bull who believes that the “easy money” policies of the various Western central banks will undermine the broader currency markets and lead to a sharp, sustained rise in prices for gold and silver.
Mr. Sprott also invests directly in a number of miners, traders, and other companies that operate in the precious metals markets. At any given time, he maintains positions in around a dozen individual names. For investors who prefer to play in the margins of the precious metals space, there are at least three “Sprott picks” that bear watching. These companies are financially strong and blessed with quality assets that may produce handsome returns for their shareholders.
Vancouver-based First Majestic Silver Corp (NYSE:AG) is a silver mining company that operates a number of producing properties in Mexico’s Coahuila, Durango and Jalisco states. It also owns smaller properties in Zacatecas and San Luis Potosi. Collectively, First Majestic Silver Corp (NYSE:AG) owns at least 100 individual concessions and thousands of hectares of mineral rights. In 2012, First Majestic Silver Corp (NYSE:AG) earned $88.9 million on gross revenues of $247.2 million.
Lima, Peru-based Fortuna Silver Mines Inc. (NYSE:FSM) operates two large silver mining properties in Peru and southern Mexico. Its Peruvian mine is a combined silver-lead-zinc property that produces sizable quantities of the latter two metals in addition to high-quality samples of the former. Meanwhile, its Oaxacan property produces gold in addition to silver. However, the mine’s gold is of a fairly low quality. As such, Fortuna is not considered to be a particularly impressive player in the gold space. The company employs about 750 people and earned$21.2 million on $154.3 million in gross 2012 revenues.
Vancouver-based Silver Wheaton Corp. (USA) (NYSE:SLW) is a streaming concern that buys and sells short-term and long-term silver purchase contracts from independent mining companies that operate in several countries around the world. Its most lucrative agreements concern properties in Latin America, the United States, and the Mediterranean region of southern and eastern Europe. Silver Wheaton Corp. (USA) (NYSE:SLW) has just 25 employees and earned $553 million on $754.2 million in gross 2012 revenues.