Here’s Why Silver Is Not Poor Man’s Gold
Source: Kitco News
(Kitco News) - Low silver prices don't make sense given that the metal is in a deficit, said Keith Neumeyer, president & CEO of First Majestic Silver (TSX:FR).
In mid-November Neumeyer spoke to Kitco at the Deutsche Goldmesse fall 2023 show.
Global silver mine production is due to fall 2% this year to about 820 million ounces, compared to forecasted demand of 1.2 billion ounces. Miners produced about 830 Moz in 2021 against a billion ounces of consumption.
"We''ve got now two industries: the solar panel industry and the electric car industry. That's consuming 30% of the mined supply of silver,” he said. A big primary silver mine produces roughly 10 million ounces a year, so the deficit represents several silver mines worth of production.
"One mine coming on stream with 10 million ounces of production has zero impact, and there's no big mines out there that are coming into production anyways,” said Neumeyer, adding that output is dropping at all the major silver producers.
He is surprised silver hasn''t been listed as a critical metal, given its use in electric vehicles and solar cells. First Majestic is lobbying the Canadian and American governments to put the metal on the list.
"A lot of people look at silver as the poor man''s gold,” said Neumeyer, "which is completely a nonsensical way to look at it. All these lights, this computer that you're working on, everything that we do as the human race requires silver, and it's just not understood. I think it''s the most misunderstood metal there is on the planet.”
Neumeyer commented on the decision earlier this year to shut down the Jerritt Canyon mine in Nevada, saying "it was just burning too much cash.” He said substantial investments will be made over the next two years on exploration and mill improvement, with a plan to have the operation back up and running in 2026.
The company''s remaining mines are all in Mexico.
Coverage of Deutsche Goldmesse fall 2023 show is sponsored by Victoria Gold (TSX:VGCX).
Originally published by: Andrew Topf on Kitco News
