The precious metals market is back in vogue with prices for both gold and silver running at full speed.<\/p>\n
But while attention is pinned mostly on gold hitting record highs, ANZ analysts believe silver will outperform gold and regain its lustre after remaining flat for most of 2023.<\/p>\n
So far this year, the silver price has gained more than 20%, hitting US$27.9\/oz since early March with fresh expectations it may rise above $31 per ounce in the second half of the year.<\/p>\n
ANZ\u2019s senior commodity strategist Damien Hynes says investment demand for gold and silver will pick up amid heightened geopolitical tensions and prospects of an easing monetary cycle.<\/p>\n
\u201cThis can lead to silver outperforming gold in 2024,\u201d he says.<\/p>\n
\u201cNormally, silver outperforms gold in a rising gold price environment, but this didn\u2019t happen last year due to lacklustre investment flows for both metals.<\/p>\n
\u201cSlower mine production growth and strong industrial demand also suggests supply is lagging demand, which will keep the market in a structural deficit.\u201d<\/p>\n
With key market drivers like easing rate cuts yet to materialise, Hynes lifts his gold and silver price forecasts through 2024 and 2025 with the anticipation that gold will trade around US$2,500\/oz and silver to move above US$31\/oz by the end of 2024.<\/p>\n
For ASX-listed silver companies, the lift in prices means that any mine development with the precious metal in economic quantities will ultimately return more bang for their buck.<\/p>\n
Whether silver is the mainstay or a valuable by-product, potential returns will be higher, which in turn translates into a project that\u2019s more likely to receive the final green light.<\/p>\n
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And it\u2019s not just prices that have been growing at a steady pace.<\/p>\n
Silver is a metal of two heads with half of its demand from investment-like categories such as silverware, jewellery, and bar and coin investment, while the other half serves industrial needs.<\/p>\n
For the first time ever, silver\u2019s industrial demand now represents more than half of the total demand for the metal with its use in solar photovoltaics growing 16% per year over the last 9 to 10 years.<\/p>\n
Sprott\u2019s senior portfolio manager Maria Smirnova<\/a> says nearly 190Moz of silver was used for solar panel production in 2023, up from 140Moz in 2022.<\/p>\n \u201cWe think that silver\u2019s use in solar alone could easily reach 300 million ounces \u2013 that\u2019s 30% of silver supply, including mine and scrap supply,\u201d she says.<\/p>\n That translates to an incremental 100Moz of silver just for solar production, which means another five to 10 big mines.<\/p>\n Silver\u2019s electrical and thermal conductivity \u2013 the highest among all the metals \u2013 also makes it an ideal component of electric vehicles with nearly <\/em>every electrical connection in an EV requiring silver.<\/p>\n Depending on the model, EVs contains up to 50g of the stuff, and as the world continues to switch from ICEs to EVs and hybrids, this number per vehicle will continue to rise.<\/p>\n While green-related applications played a huge part in lifting silver\u2019s industrial demand to a record high of 654.4Moz, its use in emerging growth areas like the nuclear industry are also beginning to take shape.<\/p>\n According to the Silver Institute\u2019s \u2018World Silver Survey 2024\u2019, <\/em>the nuclear industry uses the metal for control rods, which are embedded within reactors and contain around 80% silver.<\/p>\n Another potential source of offtake is its use in AI, with wearable devices such as electronic skin patches likely to become a vital healthcare tool.<\/p>\n \u201cSilver nanoparticles are used in such patches for both their excellent deformability and high conductivity,\u201d the World Silver Survey says.<\/p>\n \u201cAnother potential end-use is from developments in biotechnology, where the use of silver nanowires in neuromorphic engineering may come to surpass current hardware technology.\u201d<\/p>\n \u00a0<\/p>\n Yet strong demand and higher prices don\u2019t always correlate to an increase in supply.<\/p>\n In silver\u2019s case, Smirnova says mine supply has been stagnant for the last 10 years with mine production in 2013 hitting 845Moz.<\/p>\n \u201cIf we look back at last year, projections are for about 820 million ounces \u2013 that\u2019s a decline of 25 million ounces,\u201d she says.<\/p>\n \u201cEven in 2022, it was 837 million ounces. The takeaway is mine supply has not changed in 10 years.\u201d<\/p>\n The supply outlook isn\u2019t looking much better, with a marginal decline forecast for 2024, pushing the mark deficit up by 17% to 215.3Moz for the year.<\/p>\n Maronan Metals (ASX:MMA)<\/a> managing director Richard Carlton says a key part in seeing significant additional production will depend on new base metal deposits being discovered and developed.<\/p>\n \u201cOnly 17% of silver production comes from silver, or purely precious metal mines,\u201d he tells Stockhead.<\/em><\/p>\n \u201cSilver is a co-product of either copper, lead or zinc so many of the world\u2019s biggest silver mines are base metal mines with strong silver credits.<\/p>\n \u201cIn Australia, silver supply mainly comes from the Carpentaria Zinc Province with the giant Broken Hill, Cannington, Mount Isa and McArthur River deposits being some of the world\u2019s best.\u201d<\/p>\n South 32\u2019s (ASX:S32)<\/a> Cannington mine, 200km southeast of Mount Isa, was first discovered as an anomaly 30 years ago and is now Australia\u2019s largest silver producer.<\/p>\n MMA\u2019s silver-rich deposit of the same name, only 90km from Cannington, is one of Australia\u2019s largest, undeveloped silver projects with an inferred and indicated 30Mt silver-lead resource that is open at depth.<\/p>\n Carlton reckons Maronan could transition from explorer to miner with limited financial and technical risk given the project\u2019s shallow, high value mineralisation.<\/p>\n \u201cA\u00a0good example of a shallow high-grade project turning an explorer into a miner would be the discovery and development of the DeGrussa copper deposit by Sandfire back in 2009,\u201d he says.<\/p>\n \u201cAlthough not copper, the inground value of the silver with lead at Maronan compares favourably with that of DeGrussa at the time of discovery and gives us confidence that we could develop this project on our own without a JV partner.\u201d<\/p>\n The Maronan deposit was previously held under the watch of Red Metal (ASX:RDM)<\/strong><\/a>, until the company spun the deposit out into Maronan Metals so it could focuse on its Sybella rare earths project near Mt Isa in Queensland. Red Metal retains nearly 53% in Maronan at the time of writing.<\/p>\n \u00a0<\/p>\n Supply will undoubtedly grow as the investment case for silver continues to build, putting a handful of ASX explorers in the box seat.<\/p>\n Iltanti (ASX:ILT)<\/a> is exploring for the precious metal at its Orient project, 100km inland from Cairns in the historical mining area of Herberton.<\/p>\n An 11-hole drilling campaign for 2,300m aims to infill some adjacent areas to previous holes, particularly in the northeast where no drilling has been done before.<\/p>\n The program will cover a 1800m strike extent and, dependent on results, will form the basis of eventual infill drilling to a 100m x 50m grid which will go towards an inferred resource estimate.<\/p>\n ILT managing director Donald Garner says the company hopes to deliver an initial resource by the end of the season.<\/p>\n Over in South Australia, Investigator Resources (ASX:IVR)<\/a> is progressing its Paris project through the definitive feasibility study (DFS) phase, due for completion later this year. <\/p>\n The project boasts a 24Mt resource at 73g\/t silver and 0.41% lead for 57Moz of silver and 99,000t of lead with an additional 76 holes \u2013 drilled since the 2021 resource update \u2013 included in that resource estimate.<\/p>\n IVR has appointed consultancy group JBS&G to undertake environmental field work including a comprehensive flora and fauna survey while Mincore has been appointed to complete design and cost estimation for the project\u2019s processing plant and infrastructure.<\/p>\n Argent Minerals (ASX:ARD)<\/a> is another stock on the ASX with decent exposure via its advanced Kempfield gold-silver base metal project in NSW.<\/p>\n Its share price is up ~90% since the start of the month with various sampling programs set to bolster the already substantial 127.5Moz equivalent silver bounty.<\/p>\n Highlights from the newest rock chip sampling program include gold assays up to 23g\/t gold (Au), 25g\/t, silver (Ag), 0.26% copper (Cu), 0.88% lead (Pb) and 0.12% zinc (Zn).<\/p>\n According to ARD managing director Pedro Kastellorizos the\u00a0results confirm that the mineralised footprint at Kempfield continues to expand with these zones hosting the same geology and geochemical signatures as the main mineralisation over the Kempfield deposit.<\/p>\n \u00a0<\/p>\n But pure play silver companies are a rarity on the ASX, making one of the newest listees a unique opportunity.<\/p>\n Sun Silver, set to list under the code \u2018SS1\u2019, owns the Maverick Springs project in Elko County, Nevada<\/a> boasting an inferred resource of 125.4Mt grading 72.4g\/t silver equivalent for a contained 292Moz silver equivalent.<\/p>\n The company plans to begin mine and processing studies for Maverick Springs along with early-stage studies to assess the potential feasibility of silver paste and solar energy opportunities.<\/p>\n Along the way, the company will progress US Department of Energy, Department of Defence and Inflation Reduction Act grant applications.<\/p>\n Sun Silver also expects the growth potential at Maverick Springs to draw attention.<\/p>\n While the existing resource is certainly sizeable enough, the current mineralisation model covers less than a quarter of the project\u2019s area.<\/p>\n \u00a0<\/p>\n\n \ufeff<\/span><\/span><\/span>\u00a0<\/p>\n At Stockhead<\/em> we tell it like it is. While Maronan Metals, Argent Minerals and Iltani Resources are Stockhead<\/em> advertisers, they did not sponsor this article.<\/p>\n <\/span><\/p>\n The post Riding the tech express: Tomorrow\u2019s industries that are driving industrial demand for silver<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"A decade of standstill as future supply remains grim <\/strong><\/h2>\n
Other emerging silver players on the ASX <\/strong><\/h2>\n
Silver stock to watch <\/strong><\/h2>\n