In the Olympics when the second-place finisher of an event steps up to the podium to receive his silver medal, it is always overshadowed by the champion of the event, the elite top finisher, the gold medalist. In the precious metals realm this analogy holds all too true for the exposure, attention and market that gold commands over silver.

Though I believe gold's dominance over silver is warranted for a variety of reasons, silver embodies many of the same fundamental characteristics as gold and indeed stands on its own two feet in its own bull market. Silver has and will greatly reward investors and speculators that heed the call of this precious metal.

And precious metals are indeed the ultimate commodities and have thrived since the emergence of this commodities bull market. From trough to recent peak gold has jumped a spectacular 181%. In this same time silver is up a breathtaking 272%!

With these excellent returns anyone trading in the physical metals has done quite nicely over this time. But it is the stocks of the companies that explore, develop and mine these metals that have really exhibited exceptional performance. The mining stocks have been flying in response to the performance of their products and their gains have well-outpaced the metals.

And since it is very likely that this commodities bull is not even to its midpoint yet, there should be vastly more opportunities to profit on the mining stocks. Gold-mining stocks have of course been the most popular within the contrarian investment community and have exhibited amazing positive leverage to the performance of their underlying metal thus far. Many gold stocks have seen bull-to-date gains in excess of 1,000%!

With mining stocks going ballistic investors and speculators have been clamoring for information that gives them a leg up on which companies are poised to thrive today and tomorrow. There are countless hundreds of mining stocks to choose from these days and it can be challenging to discern the winners from the losers.

At Zeal one of our lines of business that supplements our newsletter products involves in-depth stock research that identifies what we think are some of the best prospective companies in their particular sectors. Since we can't pack all our findings into the newsletters, we publish supplemental research reports that profile our favorite stocks in their respective groups.

These increasingly-popular reports have received excellent feedback and many of the stocks have performed incredibly well since their release. But there was a common appeal that kept coming across my desk. What about silver stocks? Is Zeal shunning this important stock sector that seems to be unloved and underappreciated by many stock analysts?

Of course not! It is true that our reports in the last year have focused on gold and base metals stocks. But at Zeal we have been recommending silver stocks to our newsletter subscribers since the beginning of this bull market and just adore this precious metal. And as we have stated many times we believe that the foundation of any investor's portfolio should include not only physical gold but physical silver as well.

Silver stocks indeed headline our latest stock report, just released. And though many silver stocks have performed remarkably well and in the same league performance-wise as many of the gold and base metals stocks, the nature of the silver-mining industry puts these stocks in a league of their own.

There are in fact many silver-mining companies vying for investor capital today. But the process of mining for silver as a primary metal is actually quite rare as compared to gold and base metals. In this essay I'd like to share a little of what I've found in researching the silver stocks that has helped me get a better grasp on the trends in this unique sector.

First it is important to understand silver's capital markets. Now though silver's monetary value, store of wealth and industrial utility is indispensable, this market is actually quite small compared to the other metals. As measured by the dollar value of metals brought to market last year via mining, silver pales in comparison to the other metals.

Using the daily average market price multiplied by annual production volume, 2006 gold sales from mining operations generated $48 billion in revenue. The top three base metals by volume of aluminum, copper and zinc generated mining revenues of $86 billion, $104 billion and $33 billion respectively. So with 2006 silver revenues in the neighborhood of only $7 billion, it now becomes clear why silver mining is in the minor leagues when it comes to global metals sales.

Another of silver's distinguishable characteristics that puts it in a league of its own is what I call its "minority mineralization". A majority of global mined silver each year comes from mines that are not primary silver mines. In many of the larger producing "silver" mines, the silver actually serves as a byproduct to other higher-revenue-generating metals such as zinc, lead, copper and gold.

Now when I say higher revenue generating I am referring to the quantity of the minerals that reside within the identified ore bodies, raw volume. I'll give you an example right from the top. The largest silver-producing mine in the world is the Cannington mine in Australia which produced 38 million ounces in its fiscal year 2006. With its FYE in June, the base metals revenue based on the average market prices during this period were more than 20% higher than the silver revenue. And if this comparison was based on the calendar year 2006 instead, the spread would be even higher due to the big spike in zinc.

Most of the largest silver mines by volume are not considered primary silver mines as measured by the revenue of the other metals extracted. Interestingly, not only is the Cannington mine owned by a company that is not a primary silver miner, according to the venerable Silver Institute only one of the top-ten largest global silver producers by volume considers themselves a primary silver producer.

Because of the mineralization of the ore that a lot of silver comes from, at today's prices it is often considered a byproduct metal. So in the search to find "silver" stocks, or the stocks in the mining companies that are primary silver explorers or producers, it is not as easy as it is for say gold or copper or zinc.

Several of the proclaimed silver stocks that I looked at were in fact stealth copper plays or stealth zinc plays. But I'll explain to you why this is alright when choosing where to place your silver-stock capital. I call these companies that have strong byproduct revenue (or revenue potential if they are not yet producing) hybrid mining stocks.

Interestingly some of the best-performing mining stocks in the last couple years are of this class. For example a number of gold producers, some of my favorites, have incredibly strong copper, zinc and silver byproducts that made their fundamentals much more attractive than their peers producing only gold at similar levels.

These hybrid gold-mining companies credit byproduct revenues to the operating costs of mining their gold and end up turning excellent profits. The diversified mineralization within their gold deposits ends up being a blessing in disguise when all metals are on the rise.

The litmus test in identifying which gold, and in today's case silver, hybrid stock to go with lies in the strategic direction the company is taking. A couple of years ago before the base metals took off, it was gold and silver all the way. But at today's prices even though byproduct revenues are hefty and in some cases exceed the primary metal, what is the future outlook of the company?

I believe that silver, with its investment angle, has a lot more potential than the base metals through the course of this commodities bull. I'm still very bullish on base metals, and they are a bonus as a credit to expenses, but I believe the companies that keep their focus on silver will greatly prosper.

Another trend I identified in researching the silver stocks was the geographic concentration of the junior explorers and emerging producers. Many of the up-and-coming silver miners are centering their operations in Mexico and Peru. This is logical though as these two countries happen to be the largest silver-producing countries in the world, by far.

Mexico and Peru combine for silver production of about a third of the global mined volume annually. These resource-rich countries are teeming with rich silver veins and have accounted for billions of ounces of silver production throughout history. But the flocking to these countries by the silver companies is not just because of their geographic and geologic significance, but their mature and available infrastructure.

The barriers to entry in the mining business are quite steep. It is very expensive to explore for metals. And if you are lucky enough to find something to mine it is even more expensive to develop and construct the mining infrastructure necessary to extract the metals from the earth and bring them to market.

Well believe it or not there was a time before 2004, when today's silver bull started to take shape, when it was actually profitable to mine silver. These were times when silver mines were abundant and mining companies were able to operate like a normal business. But in the commodities world no business is normal. And the great commodities bear of the late 1980s and 1990s slowly sank this industry into the doldrums of commodities cycles.

This relentless grind not only dropped the price of silver below $5 but kept it there for years on end eviscerating the will for many companies to even stay afloat. By the time the 21st century was upon us silver miners of all sizes were at their wits' end with the commodities malaise and were forced to close countless mining projects and operations.

Well those astute companies that would not accept the commodities-to-zero sentiment and recognized silver's imminent rise swooped in and were able to procure advanced projects and past-producing mines for pennies on the dollar in the late 1990s and early 2000s.

So those smaller companies that would have otherwise not been able to build a mine from the ground up, or down in many cases, were able to hurdle the ordinarily-high barriers to entry in this industry and jump right in with identified deposits and available infrastructure.

And even though a lot of silver has been extracted, in Mexico in particular, modern exploration techniques have not yet addressed the rich veins that are still open horizontally and at depth at most of these past-producing mines. There is still a lot of silver left to be mined and discovered. And at today's prices it should come with excellent profits.

Well since there are only a handful of mature primary silver producers that were able to the weather the bear, a lot of smaller mining companies are vigorously working to build a footprint in the primary-silver-mining niche and use the momentum of this bull to bring the much-needed silver to market and greatly profit along the way.

Now there are still those quality silver stocks that are building their operations from the ground up through discoveries and acquisitions, but historic infrastructure has allowed a growing number of mining companies to focus on bringing back to life past-producing silver mines located in historic mining districts.

Regardless of a company's strategy to bring silver to market, the market will welcome it with open arms for many years to come. According to the U.S. Geological Survey, there was a 2006 silver production deficit of over 22 million ounces. And with demand continuing to rise, especially investment demand, it will be many years before the market returns to a consistent balance.

And even though the primary silver companies are not the major suppliers to the market, their supply footprint is continuing to grow. The incumbents and newcomers that have laser-like focus on this valuable commodity will play a very important role in serving the market's needs. And it is these primary silver companies that will greatly benefit in a rising silver market.

Of course the large mining conglomerates that bring silver to market as a byproduct also play a vital role in the production cycle, but they are too spread out between all their products to directly leverage and capitalize on the silver bull. The primary silver companies on the other hand have positioned themselves to live by the silver sword or die by the silver sword.

Now because the capitalization of the silver market is on the small side of the commodities scale, the primary silver-mining companies tend to be much smaller compared to the miners that focus on other metals. In fact, the largest of the primary silver producers have market capitalizations well less than $3 billion.

Mix these small market caps with a highly volatile silver market, and silver-stock investing and speculating becomes not for the faint of heart. While silver tends to follow the direction of its more influential yellow sibling, gold, it can experience huge swings that can take investors on a wild ride. This makes prudent silver-stock picking evermore critical for success.

And though it is a little more difficult to identify quality silver-mining stocks that are in position to positively leverage silver, there are indeed many out there that deserve consideration. In my Favorite silver stocks report I wanted to run the gamut of various stages of these primary silver-mining companies. The silver stocks I chose range from the highly-speculative junior explorers to elite senior producers.

And now should be as good a time as any to acquire positions in silver stocks. My business partner Adam Hamilton penned an essay last week that analyzed silver's tactical trend and I encourage you to peruse his analysis. In short, silver is currently in the midst of yet another upleg and is meandering around the support side of a textbook uptrend. Technically this looks like a great time to add silver stocks that leverage silver.

The Zeal Favorite 20 Silver Stocks Report, like our other reports, is designed to fulfill the fundamental side of not only our personal stock trades but those trades we recommend to our newsletter subscribers. We will be recommending at least one of these exciting silver stocks from this just-published report in the upcoming edition of our monthly newsletter. But if you would like the in-depth fundamental research for all 20 stocks at your finger tips, then please purchase the report today.

The bottom line is silver is poised to continue its strength not only in our current upleg but for many years to come as the global supply and demand imbalance slowly works to correct itself. Primary silver stocks are a unique breed of stocks and though they represent a small portion of global mined silver production, they should positively leverage silver's gains and greatly reward their shareholders.

Not only have some of the larger primary silver companies been flexing their muscles in this sector but there has been a steady flow of emerging silver producers that have hit the scene in recent years that are giving investors some excellent options to ride the silver train. Find the good ones and legendary gains could be awaiting you.