29. January 2021 | 13:50 CET
First Majestic, Silver Viper, Blackrock Gold - What is the next Reddit target?
The stock markets are going crazy. The Gen Z traders' battle, who have networked via the broker Robinhood and the community platform reddit.com, continues. After the trial of strength escalated between the hedge funds Melvin Capital and Citron, which bet on a falling price in the GameStop share, and the pack of gamified traders, who bought the paper in a concerted action, it now goes into the next round. The target has been proclaimed on reddit.com. It is mining stocks, primarily in silver.
time to read: 3 minutes by Stefan Feulner
First Majestic Silver the favourite
As stated yesterday in a thread on Reddit, "The biggest short squeeze in the world $SLV Silver 25$ to 1000$". According to the author, the silver market is one of the most manipulated markets in the world. Any short squeeze in silver stocks would be "epic." Banks would also be known to manipulate gold and silver to cover up real inflation. The watchword is to buy shares of mining stocks. The main target of the young crowd of traders seems to be the stock of First Majestic Silver. Matching the pattern of previous actions with papers of GameStop, AMC Entertainment, Nokia or BlackBerry Limited: the stock has a high short ratio, a short squeeze seems pre-programmed.
The share price picks up
After the stock broke through significant resistance at the equivalent of EUR 11.80 yesterday, First Majestic Silver exploded to over EUR 17 and finally stopped at EUR 14. Today, too, the paper is up more than 10% at EUR 15.40 on Tradegate. One may be curious about the opening on Wall Street. However, one thing is sure, one does not want to be short in this title at the moment! In addition to the share of First Majestic Silver, there are other promising stocks on the silver market. If the big short squeeze announced by the Reddit author comes anywhere close to happening, the shares of silver mining explorers and producers should go through the roof.
On the heels of Pan American Silver
The business of junior explorer Silver Viper is performing exceptionally well. The Canadian explores for gold and silver in Sonora, Mexico. The Company is currently operating its La Virginia gold-silver project, which was once owned by Pan American Silver Corp. The former owners had previously drilled 188 holes totaling 52,000 meters between 2010 and 2012. Silver Viper is using this historical data to define new target drilling. In the El Rubi zone, high-grade precious metal grades were identified in recent months. Additional drilling has shown a southern extension of the mineralized zone and the continuation of existing mineralization trends. Furthermore, management reported that test results should also indicate a high recovery rate of precious metals. With a good cash cushion of approximately CAD 3.5 million, exploration work is expected to be significantly expanded in 2021. The market capitalization is currently EUR 14.25 million. The share price is rallying strongly in parallel with First Majestic and closed yesterday at CAD 0.47, up 5.68%.
Blackrock in gold and silver
Also of interest is the stock of explorer Blackrock Gold, which is working on two very promising projects in the US state of Nevada. At Tonopah West, there was reason to celebrate at the end of December. Due to positive results, the Victor gold vein had to be extended by almost 500 meters. Also, the gold and silver discoveries were significantly above forecasts. Thus, in the full year 2020, the Company achieved 14 gold and silver discoveries with peak four-digit results in grams per ton. Further drill results are still pending for 2021. Should these also turn out positive, Blackrock Gold will still become a precious metals producer in 2021.
Spin-off lifts value
Blackrock Gold's second property is also performing positively. At Silver Cloud, the Canadians were able to announce the start of a 3,500-meter drilling program. The area is attractive because the geology shows many similarities with the Hollister mine operated by Hecla Mining. Here, the Company is currently evaluating whether Silver Cloud could be the extension of the Hollister mine. Management is also planning to transfer the project to a new company as a spin-off, bringing significant fantasy to the share price. At the moment, Blackrock Gold is at CAD 0.72 after a daily high of CAD 0.83. Here, too, the community seems to have already taken up the fight.