Persistence is omnipotent, but it sure is nice to be in the right place at the right time. Luck plays a big part in success. Right now is the right time to get lucky investing in silver, and silver miners.

The Commodity Supercycle of 2011

Do you remember what you were doing at the peak of the commodity supercycle?

Silver was the top-performing commodity of 2011, up 80% to almost $50/ounce, while gold rallied from $1,400 to an all-time high of $1,900/ounce.

The Big Score

In May of 2011, I found myself being shaken awake by mining billionaire Jean-Raymond (JR) Boulle as we descended on his Global Express private jet into the sweaty tropical jungles of Madagascar, lying to the east of Mozambique and mainland Africa.

Boulle made his 'big score' when he founded Diamond Fields Inc. in 1989, initially to search for diamonds in Africa. However, his exploration soon shifted to the frozen wilderness of Labrador, Canada. It was there that two Canadian geologists, Al Chislett and Chris Verbiski, stumbled upon the massive Voisey’s Bay deposit — a rich discovery of nickel, copper, and cobalt — while they were still on the hunt for diamonds. It's always good to have lucky geologists on your team.

Boulle then partnered with the legendary Robert Friedland, ultimately selling Voisey’s Bay to Inco (now part of Vale Base Metals) for a staggering $4.3 billion in 1996. Right place, right time, right guy.

Voisey Bay, 2000km from Montreal, Canada

Jolly With JR

In 2011, Boulle controlled the high-grade Toliara mineral sands asset in Madagascar, home to various natural resource endowments. Boulle wanted my support and my clients’ cash to develop Toliara. We were going for a jolly in JR’s jet, curious to see Madagascar’s native lemurs with their distinctive stripy tails up close, as well as a stranded old beach that might one day turn into $$$.

Champagne and caviar were served at 40,000 feet by the beautiful hostess, as the bell rang at the top of the commodity supercycle.

Precious Metals Lead in 2024

In October 2024, gold and silver led other commodities with over 30% annual gains, as a new cycle emerged. China’s industrial policy played the biggest role for copper, iron ore, and lithium, while their strategy to build a new monetary world order had the greatest impact on gold. As both an industrial and monetary metal, silver benefited from both forces.

Silver The Industrial Metal

More than at any time in the last century, silver is required to make industrial goods like solar panels and electronic gadgets. A century ago, silver was mainly used as money and for jewellery and silverware, with industrial demand only 10-15% of the total.

In 2023, industrial demand for silver, led by solar panels, electronics, and electric vehicles, was 54% of total demand, according to The Silver Institute.

$100 Silver? A Solar-Powered Debate

We recently hosted a lively and insightful webinar exploring whether the rapid expansion of solar power could drive the silver price to $100 — an ambitious tripling from its current level of around $32 per ounce. The discussion centered around the newly dominant “TopCon” solar module technology and whether it will lead to significantly higher silver usage per watt of energy produced.

Silver use per/watt of solar energy produced is falling

The panel featured some of the most respected experts in the field, including Jenny Chase, a 20-year veteran of Bloomberg New Energy Finance; Philip Newman, Managing Director at Metals Focus and advisor to The Silver Institute; Elvis Chou, Head of Research, Asia at Metals Focus; and Daniel Woodbridge, Portfolio Manager at Volta Energy Transition Fund. I had the privilege of hosting the conversation, which highlighted the rapid advancements in the solar industry and the increasingly important role of silver.

One of the key takeaways from the discussion was how the cost of solar energy has plummeted, fuelling exponential growth in capacity. However, that growth is expected to slow from 76% in 2023 to around 30% in 2024. Even with this slowdown, solar manufacturers are projected to consume over 200 million ounces of silver—roughly 25% of the primary silver supply—by next year. The competition in this sector is fierce, with Chinese manufacturers dominating the market. This aggressive competition has driven innovation at an incredible pace.

The webinar also delved into the rise of TOPCon technology, which became the leading solar module technology in 2024. This technology is particularly notable because it requires approximately 50% more silver per watt than its predecessor, PERC, which was the industry standard just a year earlier in 2023’

Silver And Electric Vehicle possibilities

Samsung’s new EV solid-state battery, due for large-scale commercial deployment in 2027, is said to use 1 kilo of silver per battery. Assuming 40 million electric vehicles are produced by 2030 and Samsung maintains a constant 5% market share, this implies 2,000 tonnes (or 70 million ounces) of potential silver demand for Samsung solid-state batteries. This is a possibility, not a forecast. Technology changes quickly.

Silver As A Monetary Metal

But is silver still a monetary metal 5,400 years after the Sumerians invented silver ‘shekels’? One way to measure silver’s monetary use is versus gold, which is enjoying a monetary renaissance thanks to China, Russia, and their fellow BRICS.

Silver’s ratio to gold, over 50 years, has varied from 16:1 to 120:1, and is currently 80:1

When silver reached its all-time high of $49.50/ounce in April 2011, gold was about $1,500 per ounce, or thirty times the value of silver. Today, with gold around $2,720 and silver at $33/ounce, gold is worth ~80 times the value of silver. Said another way, gold has outperformed silver by 2.7 times since silver’s 2011 high.

Silver: Less Liquid = More Volatility

Silver is a relatively small market with approximately $33 billion of annual demand versus $425 billion for gold. If China were to divert 10% of gold demand to silver, that would equal one quarter of the entire annual silver demand.

Think of silver in a bull market like a bunch of football fans trying to get into the stadium at match time through a small opening.

Silver is Better For Bulls

Over the long term, silver and gold show strong positive correlation, meaning they move in the same direction—except silver is more volatile. In bull markets like 2010-2011, silver and gold are most tightly correlated, with a correlation of 0.9. A correlation of 1.0 would mean silver and gold were identical twins moving in lockstep. In bear markets, like 2013 or during the 2020 pandemic shakeout, silver’s correlation with gold falls to around 0.7.

Gold is ‘safer,’ silver is ‘riskier.’

This is No Fear Finance. Gold is for Grandma.

Silver And The Energy Transition

We buy the argument that the energy transition creates structural growth in silver demand for solar power, electric vehicles, and any gadgets that utilise the best-known electrical conductor to man: silver!

Global Silver Demand Trends

In the 2020s, India led global silver demand with 200 to 300 million ounces of demand annually. In July this year, India dropped its gold and silver import tax from 15% to 6%, spurring a tripling of gold imports in August.

Silver In Asia

Philip Newman from Metals Focus, advisor to the Silver Institute, explained during our $100 Silver: Solar Powered webinar that some younger Asian consumers were switching to cheaper silver versus gold for investment and jewellery.

Chinese silver demand has approximately doubled to 200 million ounces since 2020, mainly for solar module manufacturing. Recent premiums on the Shanghai Futures Exchange of 3-5% also suggest significant Chinese retail investment demand for silver.

US Silver Investment

US investment demand for silver is primarily reflected through the iShares Silver Trust (SLV on Nasdaq), which accounts for roughly three-quarters of all silver held in ETFs globally. After declining since 2021, silver inflows to ETFs have only just begun to pick up in recent weeks.

Silver ETF Flows: What Happens Next?

Note how the silver price in BLUE leads the ETF flows with a lag. In February of 2010, the silver price was as low as $15/ounce. Fourteen months later, in April 2011, silver had more than TRIPLED to just under $50/ounce.

Silver Future: EXPLOSIVE

Despite a ~50% rally from $22 to $33 per ounce in 2024, silver has only just begun to attract investment demand as measured by ETF flows (illustrated by the WHITE line on the above chart). What happens next will be EXPLOSIVE.

We believe silver IS GOING TO $100/ounce—a triple from current levels around $33/ounce. Now for the first time this cycle financial flows are merging with industrial demand for silver.

BRICS Gold

In just a few days, the BRICS nations, led by China and Russia, will meet in Kazan, Russia, to update us on their plans for a BRICS gold-backed currency. We are witnessing the creation of a new monetary world order.

Throughout history, new currencies have always required a connection to real assets to gain acceptance. The Roman Republic, under Julius Caesar, introduced the Aureus gold coin, containing 8 grams of gold. The British Pound, formally emerged with the Coinage Act of 1696, was defined by 12 troy ounces of 92.5% sterling silver. The United States Dollar, created by the Coinage Act of 1792, was equal to 24 grams of pure silver and 1.6 grams of pure gold, establishing a silver-to-gold ratio of 15:1. Just as the Pound and Dollar were originally convertible into gold and silver, the BRICS currency will have precious metal convertibility.

The fall of the Roman, British, and United States empires all shared a common thread: the debasement of their money, leading to inflation, societal upheaval, and eventual decline. The history of money teaches us that wealth gravitates towards ‘hard money.’

Silver Is Hard Money

Would you rather own REAL money backed by gold or silver, or a promise from a politician? Ask your friends at a dinner party whether they own shares, gold, silver or bitcoin. I notice 20-30 year olds prefer bitcoin, old dudes like shares, really old dudes like gold and silver. My parents once kept physical gold and silver at home in a safe away from meddling governments.

In 2024 more than ever before silver is both an industrial and a monetary metal. Think how clever you might look at Christmas drinks explaining to your amazed confidant that your extremely profitable silver investment portfolio is saving the planet by providing unlimited solar power!!???

*That’s right darling, I’m saving the planet and making money from my silver portfolio.*

I own three silver companies previously described in ‘Silver Eggs and Red Squirrels’, Coeur Mining (CDE:NYSE), Discovery Silver (DSV:TSX), Mithril Silver & Gold (MTH:ASX)

At the Arlington Rapallo, I recorded interviews with two silver companies: Mithril Silver & Gold and Vizsla Silver.

$100 Silver