What Experts Predict for the New Silver Bull Market

By the reckoning of market watchers, the silver bull has arrived. The Gold Report takes a look at what some of the experts predict for the silver price going forward and for companies poised to benefit from the upswing.

Stack of Silver Coins

The Outlook
Like gold, the price of silver has surged following Britain's vote to leave the European Union, with investors purchasing the "safe haven" metals to protect wealth in the event other markets falter. According to an article published on July 19 on INN Daily, the silver price has gone up more than 43% year-to-date, "leap-frogging ahead of gold post-Brexit."

"Southern Silver Exploration Corp. will be a big winner."

Frank Holmes of U.S. Global Investors, in a July 11 post, notes that silver tops his "Periodic Table of Commodity Returns" for the first half of 2016. "Silver demand had a phenomenal 2015, with retail investment and jewelry fabrication both reaching all-time highs," Holmes wrote. Add to that an increase in demand for silver for photovoltaics, and now Brexit, and the first half of the year has "has been highly constructive. . ." Holmes notes that some experts believe the silver price will reach between $25 and $32 per ounce by year-end. The metal currently trades for ~$19.90/ounce.

Though optimism is prevalent, investors can expect some volatility. Because silver is both "currency and commodity," used in a variety of industrial and other uses, its value is "more highly correlated with stocks" than the value of gold, INN Daily reports.

"Great Panther Silver Ltd. is focused on maintaining low operating costs across its existing asset base."

The potential for volatility is also reflected in the comments of technical analyst Clive Maund, who declared the silver bull market underway in a Gold Report article on July 11. While his optimism was clear, Maund did note that a correction could come into play. "If you are a long-term investor, you may simply decide to ride out any correction," the analyst wrote. But short-term investors might want to "take some money off the table here if [they] are long the sector, taking advantage of the comparatively high prices now prevailing."

The Companies
A number of companies are positioned to benefit as the silver bull continues. As expert David Kranzler explains in the Mining Stock Journal, ". . .mining stocks are a 'derivative' of gold/silver, meaning their intrinsic value as companies is derived from the price of gold/silver. They are leveraged plays on the price of the metals."

As such, any silver company is positioned to benefit from a rise in silver price. Kranzler's case-in-point is Southern Silver Exploration Corp. (SSV:TSX.V; SSVFF:OTCQB; SEG1:FSE), which he believes is "significantly undervalued relative to the size of its silver reserve. It will be a big winner." Southern Silver Exploration is a Canada-based explorer with two major projects, one in New Mexico and the other in the Mexican state of Durango.

"Golden Arrow Resources Corp.'s Chinchillas may contain half a billion silver-equivalent ounces."

Southern Silver has also captured the attention of Vicarage Capital, which noted in a June report that the company has "an experienced board of directors and strong management team with a good track record in project exploration, discovery and development."

In the wake of Great Panther Silver Ltd.'s (GPR:TSX; GPL:NYSE.MKT) Q2/16 production results, Heiko Ihle of Rodman Renshaw released a report that outlined the reasons behind a target price increase to $2.25/share, among them a "fully stocked" treasury following a recent bought-deal equity financing, stable production at San Ignacio and the company's focus on maintaining "low operating costs across its existing asset base while continuing to evaluate strategic external growth opportunities." Ihle noted that Rodman Renshaw has not increased its "silver price deck from $17.50. . .any such changes should benefit companies with meaningful silver production such as Great Panther."

"We view MAG Silver Corp.'s Juanicipio project as, without doubt, the best undeveloped silver asset globally."

Raymond James resumed coverage of MAG Silver Corp. (MAG:TSX; MAG:NYSE) as of July 11. "We view the Juanicipio project (MAG: 44%) as, without doubt, the best undeveloped silver asset globally. Our thesis for MAG is reinforced, quite simply, by the exploration upside offered at Juanicipio and elsewhere (Cinco de Mayo) and a lack of broader high-quality silver-focused investible opportunities," analyst Chris Thompson noted in the report. "We see MAG trading at a developer discount to producers, and [primed] to rerate catalyzed by development progress and/or exploration success. Raymond James also included MAG on its list of preferred silver equities in its July 21 Q2/16 Precious Metals Preview.

Raymond James also covers Endeavour Silver Corp. (EDR:TSX; EXK:NYSE; EJD:FSE); a July 11 report by analyst Chris Thompson noted that Endeavour Silver delivered better-than-expected production results for Q2/16, surpassing Raymond James' estimates by 13%. The stronger metal price environment is changing investment decisions, leading to increased capital spending. "Capital spending across EDR's producing assets is budgeted to increase to $17.4 mln (from $11.3 mln) with a focus on development access to new ore sources," noted Thompson, adding, "At Guanacevi, EDR has made a production decision to develop a new mine at the Santa Cruz Sur orebody for total capital budget of $8.4 mln over 3 years."

The stronger price environment also led Endeavour Silver to reverse a planned production reduction. "Given the improved metal price environment, management has elected to sustain production levels at 1,500 tpd and no longer ramp down to care and maintenance [at El Cubo] by year-end," Thompson commented.

Another company positioned to benefit from an uptick in silver price is Golden Arrow Resources Corp. (GRG:TSX.V; GAC:FSE; GARWF:OTCPK), which recently released an updated resource estimate for its Chinchillas project in Argentina. "The updated resource estimate now also contains a maiden measured resource estimate of 17 million silver-equivalent ounces, bringing the total MI resources to 155 million [silver-equivalent ounces]," expert Thibaut Lepouttre noted in Caesars Report in June. Lepouttre expects Chinchillas may contain "half a billion silver-equivalent ounces."

"Credit Suisse upgraded Silver Wheaton Corp. to Outperform."

Silver Wheaton Corp. (SLW:TSX; SLW:NYSE) is also levered to the silver price. In Raymond James' July 21 Q2/16 Precious Metals Preview report, the firm named Silver Wheaton a top pick both as a silver equity and a streamer. Credit Suisse upgraded Silver Wheaton at the end of June from Neutral to Outperform. Analyst Ralph Profit noted, "While CRA tax risk likely continues as an overhang, SLW's business model still provides investors with a highly levered play on precious metals prices and SLW should still command a multiple in-line with royalty valuations and a premium to precious metals miners based on its leverage to underlying prices, free cash flow, and strong balance sheet."

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Disclosure:
1) Tracy Salcedo and Patrice Fusillo compiled this article for Streetwise Reports LLC. Tracy Salcedo provides services to Streetwise Reports as an independent contractor. She owns, or her family owns, shares of the following companies mentioned in this article: None. Patrice Fusillo provides services to Streetwise Reports as an employee. She owns, or her family owns, shares of the following companies mentioned in this article: None.

2) The following companies mentioned in the article are sponsors of Streetwise Reports: Southern Silver Exploration Corp., Great Panther Ltd., MAG Silver Corp., Golden Arrow Resources Corp. and Silver Wheaton Corp. The companies mentioned in this article were not involved in any aspect of the article preparation. Streetwise Reports does not accept stock in exchange for its services. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

3) Comments and opinions expressed are those of the specific analysts and not of Streetwise Reports or its officers.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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One thought on “What Experts Predict for the New Silver Bull Market

  1. I`m sure these mining stocks are good, but what do you get in return? paper ? lol
    So many years I`ve been hearing silver bugs crying, but these are the same guys that never held an ounce in their hand. One investor I know trades 25,000 oz at a time, but the amazing thing ? He has never held a single oz of silver in his hand and this guy has been in the silver market 20 years, lol.
    Many years ago, silver bugs would ask me"how high will silver go?" and without hesitation, I`d say $1,000,000 an ounce.Today, I change my figure to 300 trillion an ounce or you could just say "infinity"
    but my 300 T call is solid because I remember getting 12 trillion dollars for 1 dollar AND silver was $30 spot at the time.I`ll just cut this short, I`m the best economist in the world, it has been confirmed by the russians and chinese, that I`m the best , lol. So, here`s the deal silver bugs...The last thing you want is to be giving miners dollars,lol...You don`t want them mining...Mining silver= depressed prices. Who needs that ? when you got the PPT,FFI,COMEX,CFTC,FED Rev( or illuminatti or aliens for you conspiracy fans,lol) keeping job #1, hammering silver...MESSAGE TO SILVER BUGS : sell your mining stocks and buy PHYSICAL, you are running out of TIME. No one knows metals better than me...Analyists? lol , chartists? lol , sure you do get a lot of dollars, but all I hear is how gold and silver is worthless, lol . but yet they could not facebook , cell phone , drive a car , etc, without gold and silver. Heck, you can`t even make PVC plastic pipe without gold and silver, as a matter of fact no plastics , lol , and nothing petroleum...There is only one petroleum product that doesn`t work with silver and that`s called a lantern , they used before the automobile, lol and you WOULD NOT HAVE a car, computer, cell phone without silver, and you would not be able to write about ANTI-SILVER online without silver...I`ve been laughing for many years, And back to the lantern, good luck making the lantern to burn oil without silver....SURE, yeah it can be done, but is this 1 lantern for prepper survival puposes , or did you make that aluminum can yourself, lol. that`s right , you can`t make and alumin can without silver , lol.The reason silver is not $15,000 oz and gold $10,000 oz right now ( yeah you heard me , silver`s worth more than gold) is because the gov has done a good job at creating a retarded populace...And why wouldn`t they ? to make you think "dollars" is money and buy mining stock so you can GAIN dollars , lol...Genuine silver bugs get rid of dollars as fast as they can and get the real money , SILVER. What`s silver`s future worth ? well how many acres of land will it buy , not how many dollars will it get , lol. As little as a 100 years ago, an oz of silver would get you 15 acres in the USA and back then there was a lot more silver.So , when you ask me , my conservative estimate would be atleast 10 acres for 1 oz of silver.Forget how many dollars you`ll get , lol. Cause when the dust settles, the dollar holders will be dead.And for Christian fans , the worthless gold and silver thrown in the streets is mining stock certificates , all stocks, " for their silver and gold is rusted , corroded and turned to nothing" So , don`t quote a Bible verse without completing it. Gold and silver don`t rust.Bible also says " take gold REFINED IN THE FIRE and ye shall not suffer any of the plagues which are starvation and death'"... key word "refined" gold certificates are not refined , well perhaps refined paper, lol, plastic bills , for the tard comments that will come my way."Oh man , it`s not paper you tard, dollars are poly" lol. give me a break , lol , "can`t eat gold" , but with 1 ounce of gold you could buy soo many beans your truck couldn`t carry it, and I know, cause people who make such comments against gold are poor people and brag about their 1 can of beans VS. 1 oz of gold , lol.
    I haven`t spoke to the PM (precious metals) community in 9 months...This, I feel, will be my last message , attack away gold haters , lol , yeah I can`t eat my silver, but I can eat on my 2 tons of beans , and 40 tons of beef...My question to all the gold and silver haters out there : I have EVERYTHING, so why not ADD physical silver ? Where should I put my money ? Should I give it to the elections or to you ? lol Cause as soon as I get dollars I get rid of them as fast as I can and cans of beans (though good stocks to have) is not a good way to SELL a bunch of dollars fast... Now a 100 oz gold bar in my front pocket is a way to sell dollars fast ! AND it`s light , imagine how many acres of future land I got in my front pocket....Hate all you want, but I don`t see the haters making it, you`ll die before the dollars does and if you make it that long , you might make it 3 days after the dollar dies AND " you`ll be praying for death , that includes you athiests too...
    Welp that`s the silver report....Someone has to do it , cause they media wont , lol.
    And, this is your last chance.

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