Never Ever Seen Better Outlook for Silver, Expert Says
The silver price is expected to soar soon, during the current bullish precious metals market. We look at three junior mining companies that could stand to benefit.
The silver price is rising albeit with volatility, supply-demand is imbalanced and the outlook for the metal is bullish, according to the experts. Equities, mining juniors in particular, are a great way to play the silver market. In the words of Barry Dawes, executive chairman of Martin Place Securities, a "silver frenzy [is] coming," he wrote on Oct. 23.
In its catching up to gold, the silver price recently broke through US$35 per ounce (US$35/oz), reflecting a year-to-date gain of about 47%. Since, the price fell back a bit to the US$34/oz range, but Brien Lundin, newsletter editor, encouraged investors not to get discouraged, as the drop-off is temporary. He expects the silver price to soar when the U.S. Federal Reserve doubles down on its efforts to get interest rates much lower, he wrote on Oct. 23.
Based on silver's charts, Ron Struthers of Struthers Resource Stock Report also predicted a major run-up in the silver price.
"Back in April or early May, I highlighted the breakout from a cup and handle formation and [that] that would lead to a major upside move. This is now confirmed," he wrote on Oct. 23.
Silver Demand on the Rise
Growing demand and an undersupply of the white metal are helping drive up its price. The Silver Investor's Peter Krauth told Investing News Network (INN) that silver demand has exceeded annual supply since 2020, new mine supply peaked eight years ago, and overall supply has been flat for a decade. Krauth explained that these conditions have not led to an explosion of the silver price already because consumers have been able to "tap stockpiles of 'secondary inventories' at major futures exchanges and exchange-traded funds." However, their ability to do this will end, likely within 12-18 months, when this specific supply dries up.
Meanwhile, worldwide demand for silver, valued as an industrial and a precious metal, is expected to increase 2% this year over last, to 1,200,000,000 ounces, yet supply is projected to drop 1%, according to The Silver Institute. This year, the global silver market is forecasted to face a deficit of 759,000,000 ounces (759 Moz), the equivalent of about three-fourths of one year's supply, Money Metals reported Krauth saying in a recent presentation.
Most, or 61%, of silver demand is for industrial applications, including electrical, electronics, printing, plastics, and photography. Given its use in electric vehicles, photovoltaic panels, and batteries, silver is critical to the global green energy transition.
Demand for use in photovoltaic panels alone this year will be about 232 Moz, nearly three times the 80 Moz needed in 2020, according to The Silver Institute. TopCon cells are dominating the photovoltaics market, and they require 50% more silver. Rising demand for photovoltaics from India and the country's reduction in the silver duty to 6% are further straining the metal's supply, Krauth told INN.
The remaining 30% of total global silver demand breaks down like this: 17% for jewelry, 5% for silverware, and 17% for investments.
"Traders might consider [silver] to diversify their investment portfolios, valuing the possibility of using silver as a hedge during periods of uncertainty and high inflation," Mind Money CEO Julia Khandoshko told INN. She added that strong geopolitical and economic issues are continuing to impact silver.
New applications of silver continue to be discovered, in biotech for example, according to The Pure Gold Co. As technology and the global economy evolve, so will silver's industrial uses, Matt Watson, founder and president of Precious Metals Commodity Management, told Kitco News on Oct. 17. Expansion of the artificial intelligence industry will boost demand for silver, too, for use in energy storage, transportation, nanotechnology and more.
"[Silver] is the do-it-all metal on the Periodic Table," Watson said. "I don't see any fundamental downside to silver."
Silver Price About To Take Off
Now is the time to invest in the silver market, experts say, because it is undervalued and the price is about to take off. Coeur Mining CEO Mitchell Krebs, for instance, told Kitco, "I have never seen a better outlook for silver. It's an extremely exciting time to be in the silver market."
All of the data are pointing to the same conclusion, that silver is about to have "an upward revision," an Investing Haven article noted. The 50-year silver price chart is looking "insanely bullish" and the 20-year silver price chart is looking "very bullish." The silver adjusted for Consumer Price Index metric is indicating that silver is "wildly undervalued," and the increasing imbalance in supply and demand of the metal supports this.
In addition, silver's hidden indicator, the silver miners to silver junior miners ratio, is breaking out after some years of consolidation, Investing Haven added. This is indicating that risk is on and confirming that "strong bullish momentum is about to hit the silver market."
Silver juniors offer the greatest leverage to increasing commodity prices and the highest potential return, more so than silver senior/major and midtier miners Ahead of the Herd's Richard Mills purported in a recent newsletter issue. Investing in a junior with an excellent project in a safe jurisdiction and led by a management team that can raise money "can reap huge rewards," he wrote. "Five, 10, even 20 times your money isn't uncommon."
When silver moves, it does so quickly, Dominic Frisby pointed out in The Flying Frisby on Oct. 23.
"There is not a lot standing in the way of silver and US$50," he wrote. "In that scenario, the miners will go to the moon. If it breaks above US$50, there is nothing but blue sky above."
Krauth thinks the silver price could actually reach triple-triple digits, or US$300/oz, based on the technical and historical indicators, he said in an Oct. 8 video. "I don't believe it will stay there, but I do think that it could be in our future."
The bullish silver market and the rising silver price bode well for junior mining companies, including these three:
Dolly Varden
Headquartered in British Columbia, Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX) is advancing its Kitsault Valley project, a combination of Dolly Varden and Homestake Ridge, in the province's Golden Triangle.
Streetwise Ownership Overview*
Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX)
*Share Structureas of 5/17/2024Source: Dolly Varden Silver Corp.Recently, the company raised another CA$4.5 million (CA$4.5M) via the second and last tranche of its bought deal financing, funds it will use on further exploration work, mineral resource expansion, and drilling at Kitsault Valley, a news release indicated. Total gross proceeds from the first and second tranches are CA$32.2M.
Haywood Securities in an Oct. 17 research note wrote, "Dolly Varden Silver offers investors exposure to both high-grade gold and high-grade silver at their Kitsault Valley. [The company] has expanded their current exploration program at Kitsault to 32,000 meters (32,000m) following encouraging initial results. We view Dolly as a potential mergers and acquisitions target, particularly in light of Hecla Mining Co.'s (HL:NYSE) [roughly] 15% ownership."
According to Dolly Varden, 48% of the company is held by institutional investors, including Fidelity Management & Research Company LLC, Sprott Asset Management LP, U.S. Global Investors Inc., Delbrook, and Extract Capital.
About 44% is with strategic investors, including 19% with Fury Gold Mines, 15% with Hecla, and Eric Sprott owns 10% himself.
The rest, 8%, is with retail and high-net-worth investors.
Structurally, the company has 302.16M outstanding shares and 170.33M free float traded shares. Its market cap is CA$297.44M, and its 52-week range is CA$0.62-1.46 per share.
AbraSilver
AbraSilver Resource Corp. (ABRA: TSX.V; ABBRF:OTCQX), based in Toronto, Ontario, is advancing its Diablillos project in Argentina, where three rigs are currently drilling.
Streetwise Ownership Overview*
AbraSilver Resource Corp. (ABRA: TSX.V;ABBRF:OTCQX)
*Share Structureas of 10/30/2024Source: RefinitivThe latest results from the 2024, in-progress, 20,000m drill program were notable for exceptionally high grades, a news release indicated. They included 250 grams per ton (250 g/t) silver over 50m beyond the JAC zone and 496 g/t silver over 15m at the Oculto northeast area.
These high grades should help expand the existing mineral resource at targets with known mineralization, one of the current campaign's two objectives. The other is drill testing newly identified prospective exploration targets within the broader Diablillos land package. Thus far, AbraSilver has completed 58 holes over about 11,560m.
AbraSilver is one of Jordan Roy-Byrne's Top 12 precious metals stocks, and he rates it Buy. In The Daily Gold Premium on Sept. 25, he wrote the company's stock "has some resistance but should start to eat up." Since, the share price surpassed Roy-Byrne's then-target on it.
Hallgarten & Co., which initiated coverage on AbraSilver in December 2023, has a target price on it today that reflects a 23.2% upside, according to a Sept. 9 research report.
Peter Krauth of the Silver Stock Investor also shared optimism in the stock in an October 28 article, where he wrote, "ABRA shares have remained solidly up this year and ahead 35% since being added to the portfolio in April. Attractive to add on weakness."
As for ownership of AbraSilver, nine strategic entities own 2.7% or 4.31M shares, according to Refinitiv. The Top 3, all insiders, are Chief Executive Officer (CEO) John Miniotis with 0.19% or 1.09M shares, Director Hernan Zaballa with 0.86% or 1.08M shares, and Chairman and Director Robert Bruggeman with 0.74% or 0.93M shares.
Nine institutions hold 6.84% or 8.58M shares. The Top 3 are Mirae Asset Global Investments (USA) LLC with 2.1% or 2.63M shares, ETF Managers Group LLC with 1.74% or 2.18M shares, and Sprott Asset Management LP with 1.2% or 1.51M shares.
Retail investors own the remaining 90.46% of AbraSilver.
The company has 125.4M outstanding shares and 121.09M free float traded shares. Its market cap is CA$282.28M. Its 52-week high and low are CA$3.18 and CA$1.30 per share, respectively.
Kuya Silver
Also headquartered in Ontario, Kuya Silver Corp. (KUYA:CSE: KUYAF:OTCQB) has two district-scale silver projects.
Streetwise Ownership Overview*
Kuya Silver Corp. (KUYA:CSE: KUYAF:OTCQB)
*Share Structureas of 10/30/2024Source: RefinitivAt its Bethania mine in central Peru, which restarted in May, the company is producing a silver-lead-zinc concentrate. Kuya just sold and shipped its first batch of concentrate, thereby derisking the entire process, from start to finish or mining to delivery, as noted in a news release.
The systems at Bethania are ready for full-scale production, and the company continues to ramp it up. It also continues to stockpile mineralized material at the mine site for transport to the mill.
Kuya is advancing its second project, Silver Kings, in Ontario's most prolific mining camp near Cobalt. The plan is to conduct a 10,000m-plus follow-up drill program in the Campbell-Crawford area to expand on recent discoveries and drill new targets, according to the September 2024 Investor Presentation.
Jay Taylor of Gold, Energy & Tech Stocks wrote this about Kuya on Sept. 30: "While I am hopeful that plans to expand and grow the company with the Bethania operation succeed, my real excitement for Kuya stems from its Silver Kings project in Ontario, where on April 4, 2023, Kuya announced phenomenal assays from the second of two holes. The headline was an amazing 494.2 ounces of silver over 3.04m. This was the highest intersection ever drilled in the camp."
According to Refinitiv, four insiders own 10.53%, or 11.08M shares, of Kuya Silver. They are President, CEO, and Director David Stein with 9.53% or 10.13M shares, Chief Operating Officer Christian Aramayo with 0.56% or 0.6M shares, Vice President of Corporate Development Tyson King with 0.27% or 0.29M shares and Board Chair Heather Lendon with 0.06% or 0.06M shares.
Two institutions hold 8.61% or 9.06M shares. They are Crescat Capital with 8.39% or 8.92M shares and Incrementum AG with 0.13% or 0.13M shares.
The remaining 80.86% of Kuya is in retail.
The company has 106.38M outstanding shares and 94.12M free float traded shares. Its market cap is CA$30.76M, and its 52-week range is CA$0.195-0.46 per share.
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Important Disclosures:
Dolly Varden Silver Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Dolly Varden Silver Corp.Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.For additional disclosures, please click here.