Shares of silver and gold miner Endeavour Silver (NYSE:EXK) rose roughly 10% in morning trading Wednesday. As of just before 3 p.m. EST, that gain was still holding firm. The likely immediate cause for the share price surge was a gain in commodity prices, but a business update the company delivered earlier this month probably played a role, too.
About half of Endeavour Silver's top line comes from the sale of silver, with the rest largely derived from gold. That's a heavy weighting toward silver compared to many of its peer precious metals miners. Moreover, silver tends to be more volatile price-wise than gold, so the stocks of silver-focused miners often fluctuate quite a bit as well. Both gold and silver were trading higher Wednesday.
However, there's another factor to keep in mind. On Jan. 7, the company delivered its production results for the fourth quarter and the full year. The report was pretty good reading, with management explaining that production was the highest it has been in two years. Beyond that top-level view, production and silver grades at two key mines increased dramatically. This suggests that fourth-quarter earnings will be strong, as well. In addition, the company is optimistic about the year ahead as it looks to bring a new mine online.
A Wall Street analyst notably provided upbeat 2021 earnings estimates for Endeavour Silver on Tuesday. And the stock has received a few price target upgrades in recent weeks. All of these factors likely combined to help boost the positive mood among investors about the company Wednesday.
Investors shouldn't take a single day's price move too seriously here. As noted, Endeavour's stock price oscillates, often seeming to move for no obvious reason beyond the market's ever-changing whims. There was definitely good news for the company, so it makes sense that the stock rose, but the only thing you can really rely on from here is more volatility. That's just par for the course when dealing with a silver-heavy precious metals miner.