The Gold/Silver Ratio Begins To Trend Lower

May 29, 2020 – Andrew Hecht

https://seekingalpha.com/article/4350796-gold-silver-ratio-begins-to-trend-lower

Gold, silver and platinum flex their muscles

Todd ‘Bubba’ Horwitz – Friday May 29, 2020

https://www.kitco.com/commentaries/2020-05-29/Gold-silver-and-platinum-flex-their-muscles.html

Mark O’Byrne: Silver Should be 10x Higher

Palisade Radio – May 29, 2020 #AudioInterview

“Mark discusses the overall world economy and how it will only take a tiny trickle of the hundreds of trillions in world assets to shift direction to have a dramatic effect on precious metal prices.”

https://youtu.be/NGKpiplqa-c

Ex, The Banks erred this time, they will loose that halo they love, and will be seen as the notorious rascals they really are. Anybody and everybody involved in their World must know how to look at white and turn it black. That is how the World of Wall Street and Banking works. DT

Agreed about the bankster halos coming off as they “will be seen as the notorious rascals they really are.”

Hi David good points on Discovery Metals, and while their Silver grades are not the highest like Silvercrest, or some of the Canadian companies (like Alexco or Metallic Minerals), they also have really long intercepts of 68 meters, 168 meters, etc.. Some of their hits last year were over 200 meters. In addition, they have Gold, Zinc, & Lead mineralization as co-credits, so their Silver Equivalent ounces are quite respectable and just perfect for a large open pit operation in Mexico.

As Doug Ramshaw from Minera Alamos always says, “I’ll take high margin resources over high grade resources any day.”

Too many investors are fixated on only only high grade, but neglect to realize that if the intercepts are 0.5 – 2 meters wide, they still might not be as economic as lower grade that is 50 – 200 meters wide. For open pit mining it is size & continuity that is king, and finding some high grade pockets, like what DSV has done is just the icing on the cake.

As for Vizsla, I’m still quite encouraged with the work they’ve been doing, and their option to buy that mill in 2 years if they want to fast-track things into production. I like mining companies with a clear plan and strategy and VZLA definitely has that in spades.

While investors have been a bit fussy the last 2 weeks that they raised capital after saying it wouldn’t be needed, I think the raise was reasonable and gives them a longer runway to keep doing work for the balance of this year into next year. They also mentioned wanting to escalate the time-frame on evaluating their project and if they want to buy the mill, which I’m a fan of.

Let’s get the show on the road while metals prices are rising.

Sure thing David. Yeah, that presser on the 28th was a nice summation of the different milestones DSV has hit in 2020, and there aren’t many companies in their snack bracket that have had such consistent positive newsflow, and I love a team that can execute a plan. Ever Upward!

My sentiments exactly David. Your comment is exactly why I am so involved with and love this site so much. Please stick around and comment.

Thomas:
I got to Discovery through Levon also. I had shares of Levon and at the time if announcement going with Discovery, there was an arbitrage opportunity in favor of Levon. Then after uniting, I added. Overall, it appears to be heading in the right direction for a good response to a silver rally.

They addressed that in the video above. When the asset was with Levon (a poorly managed company) the silver prices needed were $25-$27, but based on the new drilling success the DSV team has executed, they’ve brought the All-In costs down to $17-$18 now, so it is economic at current prices.

Based on what they’ve been hitting lately, the massive size of their deposit, and their improved economics g(ood at around $17-$18 per Silver equivalent ounce), I could see a larger company making a move on them and having access to that kind of Capex requirements. I’m sure the big boys are watching their drilling form Phase 1, and want to see how the 2nd half of the exploration campaign goes as Mexico comes back online in June.

Yes I’m certainly considering adding discovery to my silver portfolio of stocks. Have Alexco Impact and Kootenay which are nicely green. Might have to consider Viszla too since they’ve come back down to a more reasonable entry point

Those are all good choices Wolfster and I’m in Alexco, Impact, Kootenay, and Vizsla as well.

I too have Alexco, Impact Kootenay, Vizsla. Other silver miners held are Bayhorse, Brixton, Silvercrest, Dolly, GR Silver, Metallic, Minaurum, Minera Alamos, Santacruz, Southern Silver, Silver Bull and Silver Bear. My data is not up to date as USAA has transferred to Schwab and still pending some refinement. But,…
Silver Bear is located in the Republic of Sakha in Russia. Some great grades but it hasn’t responded to much of anything and I am down. Silvercrest way up. Bayhorse, Brixton and Minaurum down and sideways quite awhile. Discovery, Dolly, GR, Impact and Kootenay finally green. Minera Alamos, Metallic and Alexco all showing positive before the recent recovery. Silver Bull is working on local political issues but could fly if resolved favorably. When Bayhorse, Brixton and particularly Silver Bear (Russian Connection) go green, I know it is time to take some profits in the silver area. Just some thoughts. My thinking is that if they get the foot off silver and let it go and/or the TPTB actually lose control of the fraudulent paper silver derivative markets, it may not matter what silver miner you own. But, I don’t think that is a prudent approach …yet. Always be aware that they can smash any market at any time as they own the printing press…not the people. And that is always a problem.

I guess some of those like Brixton, Minera and GR are not silver per se. Brixton started out that way. GR started out Gold and switch to silver, but then found both. Minera I guess I through that in because they are Mexico. Three areas concentrating on gold.

Here is are my Silver holdings:

> Silver Producers:

Silvercorp Metals
Americas Silver Corp
Coeur Mining
Endeavour Silver
Avino Silver & Gold Mines
Excellon Resources
Impact Silver Corp
Santacruz Silver

> Silver Developers

Alexco Resource Corp
Bayhorse Silver
Aurcana Corp
Kootenay Silver Inc
Discovery Metals Corp
Southern Silver
Dolly Varden Silver
Vizsla Resources Corp

> Silver Explorers

Metallic Minerals
Brixton Metals
Orex Minerals Inc
Defiance Silver

I also have positions in gold and base metals companies like Sierra Metals, Sabina Gold & Silver, Trevali, Tinka, etc… that have some exposure to Silver as well.

David – It is interesting that you brought up Silver Bear in Russia. I was following it closely when they were a developer, but they seemed to struggle getting into production, just like most new producers, but I’ll have to keep an eye on them.

I sold out of Abraplata for a win, but see them starting to focus more on the Copper component as much as the Silver, and just needed to lighten the load some.

I have looked at GR silver and Minaurum some, but haven’t done a deep dive on either but have been meaning to. As for Silver Bull, I see them as more a Zinc company as mentioned last weekend with a nice silver co-credit, but they do have a very large deposit like Abraplata, Southern Silver, Bear Creek, and Discovery Metals.

As for Minera Alamos, I mostly consider them a Gold company but do really like their company, and they’ve been intertwined with Argonaut Gold for so many years. Their team previously sold Castle Gold to Argonaut to form Minera Alamos, and they got their first project from Argonaut Gold, before acquiring Corex Gold for their other properties. Good stuff!

Ex:
Great portfolio of silver stocks. I would offer to trade with you but then someone would break my thumbs, and send me for reprogramming in the Everglades. Thanks for another printout for my wish list.

I also was back in Silvercrest in March and April a few times, but ended up just making them swing trades and sold back out of it, as it has already run so far and is valued quite high already. It will likely keep running with higher silver, but I don’t want to buy it back until I lighten the Silver mining load in other areas, and I opted for a few more speculative companies where I believe they can run more on percentage basis. Still, one has to respect the great work that SILV has been doing for years.

For a period in March I had raised my First Majestic position to the highest it ever was, and it was my #1 largest Silver position, even ahead of Silvercorp and Impact, but then I sold it all during that big bounce to rotate into other stocks and opted for Coeur since it was so beaten down (even before the Feb-Mar selloff). I may eventually rotate my CDE back into AG, and rotate my Brixton out during their drill results this summer over into GR Silver, Aftermath, or Silver Spruce, but for now I feel fully loaded on Silver stocks. [bordering on overloaded] 🙂

My goal is to get my Silver miners down to just a dirty dozen, but I have such a hard time getting rid of companies once I start following them and building positions. It was hard for me to liquidate First Majestic, Silvercrest, and Abraplata, and I usually get sellers remorse if I see them keep performing well, but I went a bit more speculative to see about capturing some Beta on some of higher torque more thinly traded Jrs for the next leg of this cycle.

There are a few stocks on that list that I’ll likely unload into future strength or key milestone liquidity events, and will take those wins to beef up the remaining positions until I finally get down to 12.

Ex:
Over the years I have had PAAS, Endeavor, Goro, CDE, USAS,AG, Avino, Excellon, Hecla, silvercorp and probably others. Out of all those I probably had the least success with Endeavor and Excellon. I think Endeavor was cost of production issues and Excellon was a mine flooding or something like that. All the others did fairly well, particularly during the 2016 run up. Rather than recognized a top, I rode most of them down or started liquidating for other options more speculative like Silvercrest, Great Bear, Alexco, Southern Silver, Metallic, Irving, Novo, Lion One etc. Looking back, it is apparent the longer I invest in miners the more impatient I have gotten. I started in miners in 2001 having lost confidence in the general markets because of the irrational debt conditions of the country. What I didn’t expect having grown up in a world that did not use computers in the markets, was an expectation that fundamentals and technical controlled. But, then severe de-regulation occurred across the board in the Federal Government, driven by our leaders violation of their elected trusts, changing how I felt about the “risks” involved in markets.

When discussing miners and PMs with brokers, I found they had no interest in either selling anything related to them or any desire to learn anything about them. Rather, they seem to write them off as part of an unregulated and protected fraudulent market and are to be avoided at all cost. Of course as debt continued to grow, the corruption in more areas than just penny stocks or PMs began to expand until we have reached the point today when nothing associated with the equity markets or physical commodity markets can be relied on as being protected as “level playing fields”.

I think this has had a lot to do with going from a long term investor to almost a day trader, flipping from point A to point B attempting to find those investments that can protect what I have, much less make a profit. I have hit the lowest level in 50 years at least 5 to 10 times since 2008. I have regained most but never fully recovered what I had in 2011. I have had to change the way I think from an investment strategy to a survival strategy. Real Estate is not safe as proven by the sub prime crisis. Saving are not safe in cash/savings accounts as demonstrated destruction of interest rates and value of currencies. Also, savers are no longer safe after our Leaders in Congress passed bail-in provisions similar to what was done in Cypress. The bond market has been on a tear for 30 years or so with every day being a possible of that market collapsing due to fiscal mismanagement. The dollar ever depreciating along with possible negative interest rates also punishes savers on fixed incomes or long term “secure” investments. On top of all that, the Banks have taken the debt crisis international putting the very sovereignty of all the countries in the free world at jeopardy.

So where does one invest and go for advice when the “official” financial world is full of corruption and policies that result in the transfer of wealth? Where does one invest when there is massive unemployment, altered accounting principles and other forms of false data that distort the understanding to average investor of the true value of equities in corrupt markets.

We are in “no man’s land” as it applies to how to survive in todays markets. We are no longer protected by law, by regulation or by individuals with a fiduciary duty. We are now in opposition and must continue to call attention to the injustices and criminal activity of our “entire financial system”. I have come to the conclusion that Jim Sinclair was right all along in that the Financial System is run by sociopaths that have no sense of fiduciary duty or sense of ethics and their sole objective is to transfer the wealth of nations to a few, with no loyalty to any other redeemable principles. The way we save ourselves is to invest in tangible things of value and “WAIT” for the Criminal System to fail.

Failure has come slowly and had not the system been given to the criminals, it would have been a faster failure. If the law had not been undermined and/or massive deregulation not occurred, failure would have come faster. If money interest, special interest, Citizens United not have been allowed to control, failure would have come faster. If bad actors such as politicians, appointed officials, Federal Reserve executives and other corporate officials would not have been given authority to control the economy of the US and actual criminal investigations, indictments and prosecution had been allowed to proceed rather than blocked, failure would have come quicker.

None of those things have happened that would alter, save or change the corrupt path of the markets.

I think that is why I look for the new good thing in the mining space, get rid of a good one that is not moving, take a chance in a mine in a bad country, avoided US mines for years and other almost “irrational” investment actions. That is why I am always skeptical about almost everything coming from an official source. That is why I believe that at any moment everything I have accumulated during my life can be taken away in an instance at the whim of a dysfunctional group of “citizens” without recourse. And the “real citizens” best response will be “what happened”?

It only leaves Precious Metals to hold outside the system. In that regard, it seems logical that mining companies that produce precious metals will have value and at some point have to recognized by the “Laws Of Economics” that exist outside the forced imposition of corrupt practices of the fabricated and manipulated system sponsored by the Federal Government and the Private Federal Reserve System that works for what is in the best interest of the Member Banks.

David – Wow. Great thoughts and a lot to respond to there.

You wrote: “I have come to the conclusion that Jim Sinclair was right all along in that the Financial System is run by sociopaths that have no sense of fiduciary duty or sense of ethics and their sole objective is to transfer the wealth of nations to a few, with no loyalty to any other redeemable principles.”

>> Agreed!

Your points about the Real Estate markets not being as safe as people once assumed, the Bond markets 30+ year rally getting long in the tooth, and the depreciating purchasing power of the US Dollar & low to negative interest rates punishing Savers is spot on. There really are few places to hide from all the economic chaos, and with all the 40 Million unemployed Americans lifestyle and finances changing drastically in a 3 month period, there are still many economic shocks still to hit the system.

I agree that the Precious Metals sector offers one area for asset diversification, and yes the miners of Gold and Silver will be seen as more valuable the more focus that gets put on the metals themselves, as miners have ounces locked in the vault of the Earth.

________________________

With regards to some of the PM Miners you wrote:

“Over the years I have had PAAS, Endeavor, Goro, CDE, USAS,AG, Avino, Excellon, Hecla, silvercorp and probably others. Out of all those I probably had the least success with Endeavor and Excellon. I think Endeavor was cost of production issues and Excellon was a mine flooding or something like that. All the others did fairly well, particularly during the 2016 run up. Rather than recognized a top, I rode most of them down or started liquidating for other options more speculative like Silvercrest, Great Bear, Alexco, Southern Silver, Metallic, Irving, Novo, Lion One etc. ”

>> David, that is a quality list of companies that you just mentioned and I own or have owned all of those except Pan American Silver and Great Bear. (lol!)

As for (EXN) Excellon, yes they had issues in years past due to their flooded mine conditions, but they pumped them dry from 2016-2017 and as a few years ago have had dry mining conditions where they are mining and as they continue to pump they use the water to irrigate farmers crops on the surface. I did very well with Excellon in 2016’s surge as they were like a 8-9 bagger for me, and as Mexico’s highest grade producer, I’ve held onto a core position adding/trimming and trading around that position for years. I’m not sure I follow their move in Germany for that Silver asset there, but liked that they just scooped up Otis Gold on the cheap and will have their Gold development project to turn into a mine. Most of the Silver miners have diversified into Gold (Hecla, SSR Mining, Coeur, First Majestic, America, Great Panther, and now Silvercorp).

As for (EXK) Endeavour Silver, they have been one of the highest cost producers for the last few years and really had a rough 2018 & 2019, and they closed one of their mines down that never quite worked out, however, I believe in Brad Cooke, like their assets, and feel the market has really gone overboard on punishing them when their pipeline of projects is so robust and they’ve just overhauled their active mines.

– Guanacevi Mine has been optimized
– Bolanitos Mine has been optimized
– El Compass is smaller but ramping up in their production profile (and I like that Sailfish has a NSR on it for FISH)

However their game changer is their massive Terronerra development project. That is what gets me excited about the future for Endeavour Silver.

They also have their Parral development project and 5 other exploration assets after that so a very robust pipeline of assets to keep growing into the future.

Check out pages (16-21) of the EXK Corporate Presentation for the info on Terronera:

https://s22.q4cdn.com/579360173/files/doc_presentations/2020/05/May-20-2020-website.pdf

Ex:
Endeavor was the first miner I ever bought. I held onto a long time. It was only when they shut down the mine that I decided to walk away for awhile. I also thought their CEO Brad Cooke was a straight shooter. I held First Majestic a long time and held many shares that eventually financed others along with Kirkland Lake. I hope to become more conservative as a result of massive gains in the near future and be able to buy 10,000 shares of Franco Nevada and a Lake House on Lake Como. If not, maybe just pay my electric bill.

Hi David,

Well I’m rooting for you to have big gains in your stocks and go with option A – “10,000 shares of Franco Nevada and a Lake House on Lake Como.” 😉

Cheers!

🙂

I like Group Ten also. Glad to see they are being noticed. Timing is great.

I just got in Impact for about the fourth time and been adding to Kootenay. Both green, so I will see if this run holds for awhile. Other favorites having a good day are Alexco, Disco ery, Metallic, Minaurum, Northern Shield, Orex, Precipitate, Silver Bull, Silvercrest, Vizsla, West Kirkland and a bunch of others. Hope it holds up through close.

+1 Fun times!

Wolfster, IPT hit important speed line resistance today before pulling back:
https://stockcharts.com/h-sc/ui?s=IPT.V&p=W&yr=9&mn=7&dy=0&id=p08271758055&a=642296042

Another resistance (notice the speed line support around .64):
https://stockcharts.com/h-sc/ui?s=IPT.V&p=D&yr=1&mn=7&dy=0&id=p59531299207&a=677100419

This big breakout adds to the support around .64…
https://stockcharts.com/h-sc/ui?s=IPT.V&p=D&yr=1&mn=1&dy=0&id=p40043549182&a=762542740

Symmetry:
https://stockcharts.com/h-sc/ui?s=IPT.V&p=D&yr=1&mn=7&dy=0&id=p64019932805&a=724668826

Thanks Matthew. Always looks better on your charts. You nailed it. Just glad I got back in when I did. Was flipping in and out of impact for a while almost daytrading it back in February and March. Then got a position that has an average around .40 as I bought on the way up. Cheers

Good discussion and IPT charts. I decided to trim back my IPT position today a little bit as well as a few other Silver positions that were surging like AXU, AUN, and DSV as they been growing like crazy in the portfolio, and things are moving into overbought territory and resistance in many stocks. I’m fine if they decide to keep on charging higher this week, but just wanted to move a few chips off the table and into cash as David mentioned. If they pull back 15-20% then I’ll buy those positions back.

Has anybody looked into Melkior Resources. KIrkland Lake Has bought in and they have had some interesting drill results. They have backed off from a run up and are down today. Relatively small share count around 20 mil. Just wondering. Thanks

Can never go wrong taking profits. Holding tough for my .40’s for Kootenay before I sell any. The Alexco I’m still holding cuz I’m waiting for some positive news flow to get high $3’s or low $4’s before I start taking some off the table

Hi David – I’ve not really looked at Melkior Resources before but thanks for the heads up.

Wolfster – Agreed that no shame in pulling profits periodically, but it could mean leaving money on the table. I didn’t trim any of the positions too much, but some of them have been running a bit hot and I’m starting to build back up my cash position as the miners keep surging higher. I haven’t trimmed my Kootenay position yet, but I’ve been tempted today but Morris Hubbart’s KTN chart has me hanging on for the breakout higher.

Check out the 2 minute mark.

https://youtu.be/-_dy93xlOL0?t=125

Yeah caught that one on the weekend….appreciate his TA point of view but he still no Matthew. 😎…..almost got my .40 close…someone sold a 1,000 at .395 to ruin it.

Somebody send the message to Santacruz telling the silver miners about the rally. Must be no one checking their emails there.

It’s always good to have a few laggards so you can rotate profits from the winners into them.

Nobody mentioning International Tower Hills again, up another 18% today.

David – I agree regarding (SCZ) Santacruz. They are up about 4% today but really need to get moving with their buddies here. They extended their time to file their financial statements until June 1st, which is today, and I was hoping to get an update on how things were going in Q1. I know they had to shut down for Covid-19 right as they were really getting things moving with Zimapan, but the Silver prices did take a nose dive down to $12 in March, so this probably didn’t help them lower their costs.

Santacruz is one of the higher cost Junior Silver producers like Impact, Excellon, and Endeavour Mining, but they really need prices like what we are seeing now in the $18-$19 range. Unfortunately that wasn’t how things rolled in Q1 and they were down operationally for April & part of May due to Covid 19.

However, if Silver pushes back above $19+ like it did in Q3 of 2019, then I’d expect the optionality factor of SCZ to push it back up. They were the best performing Silver producer last year during the 2019 surge, and they are the smallest market cap Silver producer available, so when they move, they really move….

Until then…. I’ll enjoy the gains in my other Silver miners, and may rotate a bit over to SCZ if they stay stagnant as it is just a matter of time. Ever Upward!

There are also companies like Coral Gold or Frontline Gold that have limited royalties in their portfolio that one of the mid-size royalty companies could acquire.