Silver market bugs are out in full pressure in February. After the super-spike of 2025 noticed the white metallic contact US$115 per silver ounce, the present pullback to the US$80 vary appears to be like like the discount of a lifetime. It’s extraordinarily tempting to suppose silver is now cheaper, and a few hunch tells traders to “purchase the dip” on silver mining shares. Don’t do it earlier than contemplating this historic and basic perspective.
Earlier than you again up the truck on silver mining shares, take a breath. Whereas the silver squeeze narrative makes for excellent headlines, the chilly, arduous actuality of the silver market and its extractive mining enterprise is so much much less glamorous.
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The silver actuality test in 2026 – A historical past of losses
One psychological entice traders incessantly discover themselves in is an “anchoring and adjustment” bias. Anchored on the latest excessive, we take a look at the sudden drop in silver costs and suppose, as a result of it’s cheaper now, silver will rally again as much as latest highs inside a fairly quick time. That’s a harmful assumption to base your commerce on silver mining shares.
With silver, the metallic doesn’t assure imply reversion. The shiny metallic has a scathing historical past of violent crashes, adopted by a long time of non-recovery. The silver crashes of 1980 and 2011 had been adopted by a number of years of futile restoration makes an attempt. Traders who purchased silver at first recorded peak in January 1980 might have endured losses for 31 years till Could 2011. Following one other silver crash in 2011, the metallic solely recovered again to prior peak ranges in October 2025 – ending one other 14 years of losses.
Silver Value Historical past: 1975-2026. Silver has taken “too lengthy” to reclaim all-time highs. Knowledge by Koyfin.
The prolonged intervals it took silver to get better to prior worth peaks had been too lengthy for many particular person traders’ meant funding horizons or holding intervals.
Hopefully, 2026 might be completely different, however hope isn’t an funding technique. And “this time might be completely different” can also be a financially dangerous assertion to make when coming into a brand new commerce.
When you’re trying to construct long-term wealth, right here is why you may wish to preserve your powder dry for just a bit longer.
The working leverage double-edged sword
Traders flock to silver mining shares like First Majestic Silver (TSX: AG) or Hecla Mining (NYSE:HL) inventory as a result of they’re leveraged to silver metallic costs. If silver strikes 10%, a well-run miner’s inventory may soar 30%. First Majestic Silver inventory generated 58% of 2025 income from silver. In a latest investor presentation on February 19, 2026, administration pointed to the inventory’s historic excessive Beta to silver of two–3 instances as a key technical attribute of AG inventory.
The leverage to silver is an exquisite factor on the way in which up. The returns are good as silver goes up. First Majestic Silver inventory has generated a 346% complete return in the course of the previous yr.
However leverage is a sharp-edged sword on the way in which down.
When the spot worth of silver drops from US$115 to US$80, the miners’ All-In Sustaining Prices (AISC) don’t drop with it.
All through 2025, we noticed labour, power, and gear prices maintain stubbornly excessive. Silver mining prices are rising, and First Majestic Silver expects AISC to rise from US$21.17 per silver equal ounce in 2025 to between US$26.15 and US$27.91 for 2026. If a silver miner’s price to drag an oz. of silver out of the bottom stays up, and the value drops by 30%, its revenue margin doesn’t simply drop 30%; it may be sliced in half or worn out solely.
Is First Majestic Silver inventory any higher?
Encouragingly, First Majestic Silver’s working margins aren’t in danger but. The corporate had but to comprehend silver costs in triple-digit ranges. It reported report income, earnings, and money stream in February as realized costs for 2025 rose 47% to US$41.52 per silver equal ounce. Realized costs elevated by 91% year-over-year to US$58.96 an oz. in the course of the fourth quarter of 2025, and present silver costs within the 80s promise one other report quarter for AG inventory this yr.
That stated, quoted silver market costs have been far increased than realized costs. It’s advisable that traders don’t purchase the metallic worth, however the realized margin. First Majestic’s margins have improved currently. Nonetheless, till we see silver mining shares show they will preserve prices down as market costs swing, the “leverage” you’re shopping for might translate to draw back danger if silver suffers its “typical” multi-year dips.