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Five Reasons Experts Think Silver Could Surpass US$50

Source: Streetwise Reports 01/08/2024

The silver price is poised to advance, experts purport, and each of a handful of expected catalysts should spur it higher. Read what they are and about some mining companies that would benefit.

Though we have left the 2023 winter holiday season behind, silver bells keep ringing, signaling likely increases in the metal’s price in the new year.

“Silver prices could experience an ‘explosive’ rise in 2024,” said John Newell, president, chief executive officer, and director of Golden Sky Minerals Corp., a Canadian minerals explorer. “The fundamentals for the silver market are extremely bullish.”

Rick Mills, also optimistic, wrote in his December 24 newsletter, “At Ahead of the Herd, we see strong upside for silver, as we head into 2024.”

The Catalysts

Experts said these five trends and events, which they anticipate happening in 2024, should boost the silver price:

  1. Gold continues to rally. Historically, silver has done well during the end of a gold rally, wrote financial expert Chen Lin in the December article “2023: The Dawn of the Silver Boom.” Earlier this month, gold and silver hit their year-to-date price highs of US$2,115.10 and US$25.91 per ounce, respectively. Since both subsequently retracted, gold has been rallying, but silver has remained stagnant in the US$24/oz range.

“That means,” Lin added, referring to its historical performance pattern, “silver will likely test the US$50 mark and is likely to exceed it.”

  1. Silver demand increases. Silver demand is projected to continue growing, driven by several sectors, including solar energy, industrials (vehicles and consumer electronics), and 5G technology, Newell pointed out. The greater the demand, the higher the price of silver.

According to The Silver Institute’s World Silver Survey 2023, the next generation of photovoltaic panels is going to need 25−150% more silver for greater efficiency. Silver demand for soldering and brazing in new vehicles is projected to grow 23% by 2030. For 5G technology (semiconductor chips, cabling, microelectromechanical systems, and Internet of Things-connected devices) it is forecasted to double by 2025.

All of this need for the metal points to “a structural silver shortage for decades to come,” Lin wrote.

  1. Silver deficit persists. Already silver is in undersupply for the third year in a row, Lin wrote. Should this trend continue into 2024, as is likely, it would be positive for the price of silver.

In 2023, global silver demand was 1.2 billion ounces, but only 820 million ounces were produced, according to the Institute. Worldwide mine production of silver was 2% lower in 2022 than in 2023.

“In order for silver production to catch up with demand, many new primary silver mines need to be built, and the silver price needs to be high for an extended period of time,” added Lin.

  1. Interest rates are cut. The U.S. Federal Reserve projected it will reverse course next year and reduce, rather than increase, interest rates, potentially three times.

“Historically, lower interest rates tend to be favorable for precious metals like silver, as they can reduce the opportunity cost of holding noninterest-bearing assets,” Newell said.

  1. Silver sentiment grows. Were investor interest in silver to increase, noted Newell, it could help boost the metal’s price.

Long-Term Price Forecast: US$300/Oz

Precious metals expert Peter Krauth believes we are in the middle of a silver bull market that began in 2001, he wrote recently in the Silver Stock Investor newsletter.

Looking further ahead, he projected, “I think silver’s bull could run for the rest of this decade, leaving us with six to seven years to go. My target price over the next few years is for silver to reach at least US$300,” but that will include volatility and corrections.

He continued, “There will be opportunities to lock in profits along the way, especially in silver stocks, but you need to have a core position you’re willing to hold through corrections for maximum gains.”

Overall, a higher and rising price for silver would be excellent news for silver mining companies, from explorers to producers.

Dolly Varden Silver Corp.

Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX) [OWNERSHIP_CHART-5439]

Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX) is an explorer for silver and gold that could benefit. It is advancing its Kitsault Valley project that unites the Dolly Varden and Homestake Ridge deposits in British Columbia’s (B.C.’s) Golden Triangle.

“It’s a quality company with a quality project, and it is one of my favorites in the silver space,” Ahead of the Herd’s Mills told Streetwise Reports.

In 2023 alone, the Vancouver-based company conducted 51,527 meters (51,527m) of exploration drilling at Kitsault Valley. Results of much of this work are expected to be released over the next few months.

Most recently, Dolly Varden Silver acquired from Libero Copper & Gold its seven claims in the southern part of the Big Bulk copper-gold property, also in the Golden Triangle, a news release noted. The 100% earn-in option allows Dolly Varden to consolidate and eventually own the entire property.

Reuters provided a breakdown of the company’s ownership and share structure, where management and insiders own 0.10% of the company. According to Reuters, Director Darren P. Devine owns 0.07% of the company with 0.20 million shares, Director James Anthony Sabala owns 0.02% of the company with 0.05 million shares, and Director Robert John McLeod owns 0.01% of the company with 0.04 million shares.

Fury Gold Mines, Ltd., owns 22.04% of the company with 59.50 million shares, and represents a strategic investor, stated Reuters, as does Hecla Mining Co., which owns 10.02% of the company with 27.04 million share.

Reuters reports that institutions own approximately 22.65% of the company. According to Reuters, 2176423 Ontario, Ltd., owns 9.49% of the company with 25.63 million shares, Fidelity Management & Research Company LLC owns 6.30% of the company with 17.00 million shares, Sprott Asset Management LP owns 2.01% of the company with 5.44 million shares, ETF Managers Group, LLC, owns 1.96% of the company with 5.29 million shares, Mirae Asset Global Investments (USA) LLC owns 1.40% of the company with 3.77 million shares, US Global Investors, Inc., owns 1.02% of the company with 2.75 million shares, DWS Investment GmbH owns 0.28% of the company with 0.75 million shares, and Charteris Treasury Portfolio Managers Limited owns 0.19% of the company with 0.50 million shares.

There are 270 million shares outstanding with 157.53 million free float traded shares, reports Reuters, while the company has a market cap of CA$160 million and trades in the 52-week period between CA$0.58 and CA$1.24.

MAG Silver Corp.

MAG Silver Corp. (MAG:TSX; MAG:NYSE American) [OWNERSHIP_CHART-536]

Along with the now-producing joint venture Juanicipio project in Mexico, of which it owns 44%, MAG Silver Corp. (MAG:TSX; MAG:NYSE American) has two 100%-owned projects: Larder in Ontario, Canada, and Deer Trail in Utah. All three offer exploration upside.

“We see potential for MAG shares to rerate as Juanicipio ramps up and delivers cash flows to the joint venture partners,” wrote Kevin O’Halloran, BMO Capital Markets analyst, in November 2023. He rated the Canadian silver company Outperform.

Institutions own 70% of MAG, and 30% is retail, according to the company.

Top institutional shareholders include Juanicipio project operator Fresnillo Plc. with 9.0%, BlackRock Asset Management at 10.3%, Van Eck Associates 9.5%, First Eagle Investment Management at 5.6%, ETF Managers Group LLC at 5.3%, and Sprott Asset Management at 3.1%, the company said.

MAG Silver has a market cap of CA$ 1.4 billion. It has 102.9 million shares outstanding, according to TSX Infosuite. It trades in a 52-week range of US$22.96 and US$13.26.

Norseman Silver Inc.

Norseman Silver Inc. (NOC:TSX.V; NOCSF:OTCQB) [OWNERSHIP_CHART-10000]

Norseman Silver Inc. (NOC:TSX.V; NOCSF:OTCQB) is a precious and base metals explorer based in Vancouver, B.C., with a full calendar of catalysts in 2024.

“Norseman is going to see big changes in 2024, and all are for the better,” Michael Ballanger of GGM Advisory Inc. wrote in a recent report.

The mining company intends to use the proceeds of a recent $1M private placement on exploration work at two projects.

Slated for its Taquetren gold project in Argentina is trenching, geophysics, and regional mapping in H1/24 and mapping and logistics in H2/24. At the Caballos copper project in Chile, on which the company has an earn-in option, mapping, and logistics are to be done in H1/24, and 3,000m worth of drilling is to be done in H2/24.

According to Reuters, about 15% of the company is owned by strategic investors. The rest is retail.

Top shareholders include CloudBreak Discovery Corp. with 6.93%, Chairman Smyth owns 6.24%, and company President, Chief Executive Officer, and Director Sean Hurd owns 1.76%, Reuters reported.

Norseman has a market cap of CA$8.85 million, with 68.12 million shares outstanding. It trades in a 52-week range of CA$0.18 and CA$0.035.

Western Exploration Inc.

Western Exploration Inc. (WEX:TSX.V;WEXPF:OTC) [OWNERSHIP_CHART-10631]

Western Exploration Inc. (WEX:TSX.V;WEXPF:OTC) is a U.S.-based mining explorer currently advancing its Aura gold-silver project in Northern Nevada toward a prefeasibility study.

“We believe WEX’s primary strengths are its high-grade Doby George project with near-term production potential, a strong management/board, and Agnico Eagle’s backing,” wrote Sid Rajeev, Fundamental Research Corp. analyst.

Western Exploration’s 2024 plans for Aura, listed in its November 2023 investor presentation, call for resource updates on the Gravel Creek and Doby George deposits in H1/24, followed by drilling of both in H2/24.

According to Reuters, 2.81% of the company is held by management and insiders. Chairman Marceau Nicolas Jean Schlumberger owns 1.91%, with 0.66 million shares. CEO and President Darcy E. Marud owns 0.56%, with 0.19 million shares. Director Gerard Emmanuel Munera owns 0.24%, with 0.08 million shares, and Director Nicolas J.R. Schlumberger owns 0.10%, with 0.04 million shares.

74.79% is owned by institutions. Golkonda, LLC, owns 57.97%, with 19.97 million shares. Agnico Eagle Mines Ltd. (a CA$32 billion market cap major mining company) owns 15.80%, with 5.44 million shares, and US Global Investors, Inc., owns 1.02%, with 0.35 million shares.

The rest is with retail investors.

Reuters reports that there are 34.45 million shares outstanding and 8.07 million free float traded shares, while the company has a CA$16.23 million market cap and trades in the 52-week period between CA$0.65 and CA$2.40. Fabled Silver Gold Corp. (FCO:TSX.V; FBSGF:OTCQB; 7NQ:FSE)

Fabled Silver Gold Corp.

[OWNERSHIP_CHART-10241]

Vancouver, B.C.-based Fabled Silver Gold Corp. (FCO:TSX.V; FBSGF:OTCQB; 7NQ:FSE) acquires and explores silver properties in Mexico. The company said it is presently securing funding to close its acquisition of the 2,857-hectare Mecatona property in Chihuahua’s Parral silver mining district from Kootenay Silver.

At Mecatona, according to management, “Other than surface sampling, no modern exploration tools [were] ever used, including drilling.”

As such, upcoming catalysts for Fabled and Mecatona, outlined in an investor presentation, include the systematic sampling of all old workings, completion of a resource estimate, release of historical exploration results, and announcement of an exploration program.

Reuters provided a breakdown of the company’s ownership and share structure, where management and insiders own approximately 5.37% of the company. According to Reuters, President and CEO Peter J. Hawley owns 2.60% of the company with 1.12 million shares, and Director Luc Pelchat owns 0.14% of the company with 0.06 million shares.

Reuters reports that institutions, in the form of Palos Management Inc., owns 3.48% of the company with 1.50 million shares.

Fabled has a market cap of CA$3.02M. Trading of the stock remains on hold until the acquisition closes.

Again, experts predict the price of silver will rise significantly in 2024, and this would help support silver companies in their endeavors and their share price. The mining entities mentioned have numerous activities planned for the new year, any of which could catalyze their stock.

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Important Disclosures:

  1. [Dolly Varden Silver Corp., Mag Silver Corp., Western Exploration Inc., and Fabled Silver Corp.] are billboard sponsors of Streetwise Reports and pay SWR a monthly sponsorship fee between US$4,000 and US$5,000. In addition, [Western Exploration Inc.] has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
  2. 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., Western Exploration Inc., Fabled Silver Gold Corp., and Norseman Silver Inc.].
  3. [Doresa Banning] wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
  4. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for 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. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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( Companies Mentioned: DV:TSX.V; DOLLF:OTCQX,
FCO:TSX.V; FBSGF:OTCQB; 7NQ:FSE,
MAG:TSX; MAG:NYSE American,
NOC:TSX.V; NOCSF:OTCQB,
WEX:TSX.V;WEXPF:OTC,
)

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