Precious-metal mining stocks have had a wild, but mostly lucrative, ride over the past year. After physical gold and silver found a bottom in the first quarter of 2016, both have rallied by a double-digit percentage, fueling the underlying stocks of companies that mine these products by a substantially larger percentage.

Here's why precious metals are looking lustrous once more

What's been fueling the rally in precious metals? First and foremost, uncertainty about U.S. and global growth prospects has moved investors into gold and silver. Worries over whether Donald Trump's policies are right for the U.S. economy, as well as uncertainties tied to Brexit and the potential for additional countries to leave the European Union, have some pundits concerned about the world's economic outlook.

Gold and silver bars sitting next to one another.

Image source: Getty Images.

Precious metals have also benefited from the perpetuation of low opportunity costs. Opportunity cost is the act of giving up a near-guaranteed gain in one asset for the opportunity to earn a bigger return with another asset. The near-guaranteed returns of bonds and CDs are often preferred by investors, but with the Federal Reserve keeping a lid on interest rates for the past eight years, it's made the yield on these assets exceptionally low, and in many cases not worthwhile. As long as yields on interest-bearing assets remain depressed, gold and silver should continue to draw in investors.

In more stock-specific terms, gold and silver miners have rallied because of the two aforementioned factors, as well as their prudent cost-cutting. With gold and silver mired in multiyear downtrends until 2016, mining companies were forced to reduce their spending and focus their efforts only on the projects with the highest ore grade. The result has been more manageable costs and sustained profitability, even with gold and silver a respective 34% and 63% below their decade highs.

Truth be told, silver miners just aren't that reliant on silver anymore

More recently, silver stocks have been outperforming their gold peers. The gold-to-silver ratio, which you can read more about, is currently hovering around 68-to-1. With the average closer to 50-to-1 since 1900, this would imply, based solely on the averages, that silver has a shot to outperform gold in the near-to-intermediate term. This could be why silver stocks have shone just a bit brighter than gold stocks recently.

However, it's important for investors in silver mining stocks to realize an important truth that they may have otherwise overlooked in recent years: Most silver mining companies aren't even that reliant on silver nowadays.

Most silver miners are expected to generate less than half of their revenue in 2017 from silver.

Image source: First Majestic Silver investor presentation. Data source: BMO.

According to 2017 production estimates from the Bank of Montreal of 11 silver mining companies that was published in a recent First Majestic Silver (AG -1.02%) investor presentation, more than half of all silver mining companies now rely on a combination of gold or base metals (e.g., copper, lead, or zinc) to comprise at least half of their sales.

It's important to understand that silver miners' increased reliance on gold or base metals isn't a bad thing. However, it does mean investors need to pay more heed to the underlying movements in the prices of physical metals, because a big move in silver may not mean as much for certain silver stocks anymore.

Silver in name only

For instance, Silver Standard Resources (NASDAQ: SSRI), a core holding in my own portfolio, has long relied upon the Pirquitas mine for silver production. However, open-pit mining operations ceased in January, and unless the company decides to move forward with its Chinchillas project, Silver Standard's silver contribution from Pirquitas will cease in early 2018. If that happens, Silver Standard Resources will be left with two assets: the Marigold mine, which is expected to produce between 205,000 and 215,000 ounces of gold this year, and the Seabee mine, acquired when it purchased Claude Resources in June 2016, which is expected to produce 72,000 to 82,000 ounces of gold.

A person with a white glove holding a gold ingot over a rising stock chart.

Image source: Getty Images.

In other words, if Silver Standard Resources doesn't move on Chinchillas and makes no additional acquisitions in 2017, it'll essentially be reliant on gold for all of its future revenue, which, again, isn't a bad thing. It just means investors in Silver Standard Resources should be paying far less attention to the dynamics of the silver market and instead should be laser-focused on what physical gold is doing.

A similar story can be told of Hecla Mining (HL), albeit Hecla isn't as reliant on gold as Silver Standard Resources. Hecla is perhaps the most balanced mining company of them all, with about a third of its revenue production coming from silver, a third from gold, and a third from base metals. Its primary gold-producing mine is Casa Berardi, which is still ramping up its milling potential and in turn looking to increase its gold recovery in the coming years.

The ramp-up and future expansion of the San Sebastian mine could be the real wild card here. San Sebastian added just shy of 4.3 million ounces of silver in 2016, but it's still in the process of ramping up production. San Sebastian is also a gold-producing mine, meaning its expansion is likely to strongly tie Hecla to the yellow metal for years to come.

The closest stock to a silver pure play

On the other hand, the closest silver mining stock that investors can get to a "pure play" is First Majestic Silver, which should net nearly 70% of its revenue in 2017 from silver. Only around a sixth of its revenue is derived from gold, with the remainder coming from base metals.

A bar of silver.

Image source: Getty Images.

Looking ahead, First Majestic Silver anticipates sticking close to its roots. After producing 11.9 million ounces of silver in 2016, the company is forecasting production of around 20 million ounces by 2020 or 2021. This growth is on account of new mines coming on line, as well as expansion at existing mines. In particular, First Majestic is counting on roasting circuit construction at La Encantada to reprocess old tailings and add 1.5 million ounces of production annually. It's also aiming to bring Plomosas and La Luz online within the next four years, with each expected to add in the neighborhood of 2 million silver equivalent ounces of production.

If you want the most direct correlation to silver, without buying physical silver itself, then First Majestic Silver is the stock to consider.