Silver Market Update – Catching Up With Multiple Junior Silver Stocks - Part 1
Excelsior Prosperity w/ Shad Marquitz (09/01/2024)
Thinking about what to write this weekend, it seemed we were overdue for a review of silver pricing and the junior silver stocks. There have been a number of articles here over the last few months that each featured just one junior silver company at a time, and there have been some newer KER interview updates with those companies piling up to share with readers here. In addition, there are a couple of interview updates on junior silver explorers that I’ve not written up before, but that really just need to get out there while the information is still timely and relevant to investors here. Also, there have been a few good conversations we’ve had over at the KE Report with different guests looking at the opportunities in silver stocks, and so it’s all just been building up in my thoughts to where it is time to put together a nice summary of everything into a consolidated update.
So, let’s get into it…
Let’s briefly kick things off with a technical look at both silver and the silver stocks, to get a sense of the pricing trends in the market.
Here is a 2-year daily chart of Silver futures, which shows the 88% rise in price from the intermediate low in September of 2022 at $17.40 up to the recent May 2024 peak at $32.75. As discussed in previous commodity updates, we can say that while silver has a messy whipsaw chart, it has generally been in an uptrend for the last couple of years, and actually outperformed the percentage move in gold over that same time period. Silver is still hanging out near the top-end of that price spectrum.
Looking at the silver chart, we can also see the significance of the 50-day Exponential Moving Average (EMA) in offering support a few times. It became more germane after the breakout above that level heading into March, when gold also took off to the upside to kick off that month. The 50-day EMA held as support in early May, and then again for most of June. Then this support was lost in July, setting up a bearish short-term posture where it cascaded down to test the 200-day EMA instead in early August. That support held at the 200-day EMA, and silver pricing did climb back above the 50-day EMA, once again establishing a bullish posture the last couple weeks of August. Pricing has been retesting the 50-day EMA a couple times recently, but silver did close at $29.14 on Friday to end the week, just slightly above the 50-day EMA (currently at $29.10).
So, silver has a mildly bullish position at present, but with RSI in neutral territory (currently with a reading of 50.29). Silver bears will be watching to see if the 50-day EMA will give way and then see prices head back down to retest the 200-day EMA. Silver bulls will want to see silver pricing hold above that 50-day EMA as we move forward, and then see pricing regain the recent peak at $32.01, and more importantly the May peak at $32.75.
Let’s have a look at the silver miners by way of the Amplify Junior Silver Miners ETF (SILJ).
(SILJ) has a really messy chart, and it had been whipsawing investors back and forth, drifting lower last year and early this year, until that turnaround to kick off March of 2024, where it springboarded up by nearly 72% from the low of $7.80 to the July high of $13.408. (SILJ) spent most of June oscillating on either side of the 50-day EMA, then retested it in July, to see that level fail, moving it into a short-term bearish posture, where initially even the 200-day EMA failed briefly. Pricing consolidated around that 200-day EMA level in early August, then shot back above the 50-day EMA moving it into a short-term bullish posture, and now it is back to resting that level once again. (SILJ) closed the week at $11.98, just 6 pennies above the 50-day EMA (currently at $11.92). Bulls will want to see that level hold, and for pricing to go back up and clear the most recent peak at $12.72, and then that July peak at $13.408.
So what we can takeaway from the pricing action in the silver junior mining stocks via (SILJ) is that pricing has remained very volatile the last 2 years, and has been an absolute rollercoaster of ups and downs, sudden ascents and gut wrenching drops, but it has mostly been consolidating at a higher level in the $11s, $12s, and $13s since April. Most individual silver equities had big moves in March, April and May, then they dropped hard but held onto some of the progress made, and have turned back around over the course August, consolidating at higher levels. While this has been mildly bullish progress in silver equities, it sure doesn’t feel like that with regards to investors sentiment and mood. Many expected a bit more leverage to the move silver made, and considering even the smaller and mid-tier producers are now in the money almost across the board as it relates to AISC and margins.
Over at the KE Report we’ve asked a lot of generalist fund managers, technical analysts, and precious metals focused thought leaders about the underperformance of the silver stocks to silver, and that these markets are still nowhere close to making all-time highs, while meanwhile gold keeps ratcheting up to new all-time highs over and over again. Of all the recent discussions, there were 2 really solid conversations that revolved around investing in silver and the silver equities that I’d like to share with readers here.
Sean Brodrick – Opportunities Presenting Resource Investors In Silver And The Quality Silver Stocks -Aug 20, 2024
Peter Krauth – Pro Tips On Investing In Junior Silver Stocks – Outcrop, Southern Silver, Guanajuato, Sierra Madre, Viscount, Dolly Varden, Vizsla, AbraSilver, and Kootenay - August 21, 2024
Peter and I really covered a lot of ground in that interview above, discussing why he is animated by a number of individual junior silver stocks; many of which have been covered previously in articles here in this channel, and synchronistically that we had back on the KE Report for recent interviews.
One of the companies Peter flagged was Outcrop Silver, which I wanted to save for a deep dive article where we explore the company fundamentals in more detail; and that is still going to happen down the road. In the interim, Ian Harris, President and CEO of Outcrop Silver & Gold Corporation (TSXV: OCG) (OTCQX: OCGSF), joined us over at the KE Report on July 30th to introduce the company, project, team, and financial metrics for this exploration company focused on expanding resources and derisking its flagship Santa Ana high-grade silver project in Colombia.
Outcrop Silver – Introduction To This High-Grade Silver And Gold Explorer Growing Resources In Colombia
We start off discussing the Santa Ana Project and the 37 million high-grade silver equivalent ounces in place, and that the majority of metals endowment is primary silver with a gold co-credit, as opposed to many silver projects that are really more base-metals dominant. Ian also outlines the derisking work through metallurgical testing that has shown fantastic recovery rates, and points out that they have the trifecta of high metals grades, good recovery rates, and good payables (without many smelter penalties). The key focus this year and into next will be showing meaningful growth of the resources at Santa Ana, with the goal to double, and eventually triple the resources in place, before moving into economic studies. The company will be averaging 2,000 meters in drilling per month through the end of the year, which is a consistent amount of ongoing exploration to follow along with.
Another silver exploration company that Peter highlighted was Kootenay Silver. Again, I was saving this company for a one-off article on opportunities in silver exploration stocks, and that will also happen in the not-too-distant future. In the interim, here is a KE Report interview with Jim McDonald, President and CEO of Kootenay Silver (TSX.V:KTN – OTC:KOOYF), where he recapped their August 14th news release reporting assay results from 11 holes focused on expanding the D-Vein at the Columba Project, in Mexico.
Key takeaways include the expansion of the D-Vein’s strike length to over a kilometer from an initial 450 meters, at the start of this year’s drill program. These results are part of the 20,000-meter fully funded drill program. Jim explains the strategic importance of these results, their implications for future resource estimates, and the aggressive, step-out drilling approach for this year’s program. Finally, comparisons are drawn to similar successes at projects like Silvercrest’s Las Chispas Mine and Vizsla Silver’s Panuco Project, emphasizing the potential for high-grade, wide intercepts to substantially increase resource volumes.
Another company Peter Krauth brought up in his interview was Dolly Varden Silver (TSXV:DV) (OTCQX: DOLLF). Readers of this channel know we’ve discussed this company a couple of times in prior articles, and also did a deep dive on the company in this article:
Opportunities in Silver Explorers and Developers – Part 2
https://excelsiorprosperity.substack.com/p/opportunities-in-silver-explorers-8d7
On August 13, 2024 we also interviewed Shawn Khunkhun, President and CEO of Dolly Varden Silver, to review more high-grade silver assays returned from the 2024 exploration program at the Wolf Vein, with step-out drilling returning 1,091 g/t Silver over 9.38 Meters at the Kitsault Valley Project; located in the Golden Triangle of British Columbia, Canada.
Yet another company Peter Krauth profiled in our conversation was AbraSilver Resource Corp (TSX.V:ABRA – OTCQX:ABBRF). Again, readers here will know we’ve done a deep dive into this advanced explorer and early-stage developer as well in this article:
Opportunities in Silver Explorers and Developers – Part 1
https://excelsiorprosperity.substack.com/p/opportunities-in-silver-explorers
On August 19, 2024 we also interviewed John Miniotis, President and CEO of AbraSilver Resource Corp, and reviewed more drill holes that have been released from the ongoing 20,000 meter Phase 4 diamond drill campaign expanding the JAC Zone to the SouthEast, and the Occulto Zone to the NorthEast on their wholly-owned Diablillos property in Salta Province, Argentina. We also discuss the mapping and targeting for upcoming drilling of some porphyry targets at Cerro Blanco and Cerro Viejo.
Peter Krauth also brought up Vizsla Silver (TSX.V:VZLA – NYSE:VZLA), which readers here will know we also covered in a prior deep dive article here in this channel.
Opportunities in Silver Explorers and Developers – Part 4
https://excelsiorprosperity.substack.com/p/opportunities-in-silver-explorers-93b
Additionally, on July 25th, my partner at the KE Report, Cory Fleck, interviewed Mike Konnert, President and CEO of Vizsla Silver, and they unpacked the Panuco Project Preliminary Economic Assessment.
Vizsla Silver – Panuco PEA Overview; After-Tax NPV(5%) US$1,137 Million, 85.7% IRR, 15.2 Million oz AgEq Average Annual Production
There was even one more company that Peter Krauth outlined as a company he thought may be setting up for a turn-around, and he postulated that they could even be acquired by a larger producer down the road… that being Guanajuato Silver (TSX.V:GSVR – OTCQX:GSVRF). Once again, we’ve done a deep dive into this company in a prior article here on this channel.
Opportunities In Growth-Oriented Silver Producers – Part 2
https://excelsiorprosperity.substack.com/p/opportunities-in-growth-oriented-235
Just last week on August 28th, I connected once again for a discussion with James Anderson, CEO of Guanajuato Silver, where he provided a comprehensive operational update from their 4 producing silver-gold mines and 3 processing facilities in central Mexico. He outlined some of the equipment the company has invested in and is installing to optimize future production, and mentioned they are actually producing from stockpiled ore at mines #5 and #6. We also get into the political landscape in relation to mining in Mexico, and how James sees that evolving over time.
Additionally, (for those readers that find this after 09/05/2024), we just had James back on for an update on the record revenues from the Q2 2024 financials. We got into their investment into equipment and personnel, how they are going to reduce costs, improve efficiencies, and focus on growth initiatives.
People that regularly follow the KE Report interviews will know we also recently conducted interviews with 3 other silver companies, Impact Silver, Silvercrest, and Silver Tiger; that we just don’t have room to fit into this update, but those interviews can be found on our website or YouTube channel.
That’s it for this update on silver and investing in the junior silver stocks.
Thanks for reading (and listening) and may you have prosperity in trading and in life.
Shad