Gold And Silver Stocks Are On The Cusp Of Getting Very Bullish

There is tremendous potential for impressive moves in the stocks of companies mining, developing new mines and exploring for gold, silver and copper. Part of the reason is that the metals are primed to go much higher in 2025, and due to the fact that the valuations of the stocks are so undervalued.

Gold stocks are particularly underappreciated considering the powerful bull market during 2024. Despite the gold bull market having such a strong 2024, and getting off to a great start in 2025, the value of gold in the ground is at historically low valuations, often trading for pennies on the dollar.

The last time I saw gold in the ground being so undervalued was back in the early days of the 2001 to 2011 gold bull market. When they got going it was a magical time that saw many go up by multiples from their depressed prices.

We are at the cusp of a tremendous move for best in breed gold miners, new mine developers with high-quality projects and explorers with the potential to make impressive discoveries and those advancing impressive discoveries.

During my 30 plus years working in the mining business, it has been rare to see a metal so well positioned for an explosive move to the upside as silver. During the past four years, the supply of silver has been in a deficit that is pretty much equal to one year's worth of physical production.

Above ground silver has been able to cover the deficit. But there are limits to that and with supply from mining not growing, while demand is strong, silver is perfectly set up for a remarkable move in 2025.

Copper also has an impressive supply and demand story. New discoveries have been in decline for the past two decades. Current mines are nearing the end of their lives while copper miners need to go deeper into the ground to make less money mining copper.

Meanwhile demand for copper just keeps growing in our electrified world. Power grids in developed countries are ancient and in need of rebuilding. Power grids in developing countries need a lot of copper as well. As do alternative energy sources. Plus, electric vehicles built by Tesla and carmakers in China use massive amounts of copper. The same can be said for technology companies on the internet, cloud computing, cryptocurrencies and Artificial Intelligence.

We all hear about these various needs for copper today and for decades into the future, what is less well understood is where all the copper is going to come from. The old mines can’t meet the demand, and there aren’t enough projects in development to replace the old mines and the new discoveries are woefully unable to get enough new projects into development either.

Common themes for gold, silver and copper is strong demand while the supply chains are broken from the miners to new mine developers and explorers with important discoveries. If the miners are struggling to feed the demand, and there aren’t enough new mine developers or explorers with important discoveries, then the supply chains will stay broken for many years, likely to be measured in decades.

With the backdrop of strong demand and broken supply chains for gold, silver and copper, while the stocks in companies in those metals are dramatically undervalued, it is shaping up for the stocks to get much more bullish. They are coiled springs that can go up in ways that will shock even ardent metals bulls.

What really needs to happen is that generalist investors and younger investors to find the metals stocks. We saw a little of that a few years ago when the Reddit crowd got bullish on silver with visions of a big short squeeze.

The long-term bulls on metals stocks are getting pretty old, the average is probably well over 50-years old. What the sector needs is new blood. That new blood is online, consuming content on social media websites and Youtube.

In order for gold, silver and copper, as well as the stocks in companies involved in those metals to attract the new blood, they need to embrace digital marketing. In addition, I think the industry needs to do a much better job at how they tell the bullish stories for the metals, mining and their own companies.

One of the ways to get new blood excited about the metals and mining sector comes down to how the industry tells its stories. For much too long, the industry has been stuck doing things the same old ways as the past.

An example of that is how companies present their stories. All too often, I see news releases and corporate presentations that are written by geologists trying to impress other geologists or lawyers and accountants that write for their peers. They use a lot of jargon based on their education and professional backgrounds without focusing on writing for investors.

Drilling is the lifeblood of the mining sector. It is how miners increase their production and find new deposits near their current mines. It is how new mine developers advance their projects toward production and extend the lives of mines when in production. And it is how explorers find new deposits and advance important discoveries.

What drilling is at the heart is hunting for buried treasures. People love treasure hunting, but the industry doesn’t really present the process of exploration that way. Instead it gets bogged down in geospeak without a lot of flair.

Storytelling is at the heart of every industry. To get the masses excited, every industry needs impressive salespeople that are talented storytellers.

In addition, they need to go where the people are. Traditional media is dead. New media on social media websites, podcasts and Youtube are where everybody is these days. So to really get the story across to the masses needs a commitment to digital marketing.

The mining sector is somewhat stuck in its old ways. Writing news releases and corporate presentations that are geared for geologists, lawyers and accountants. It has to change in a big way to market to new blood. That means talking about the industry in a way that tells the treasure hunting story.

I also believe that the industry could do a much better job at bringing investors into the process of treasure hunting with the drill rig. One of the tools used to vector on where to drill is geophysics. Which can be presented in a highly scientific way, or for investors it can also be explained as basically a high powered sensitive metal detector.

Everybody has seen folks walking around with metal detectors, that resonates more than discussing the physical properties of rocks and describing it in a highly scientific fashion. One impresses geoscientists, while the other gets the story across to investors.

Another tool to narrow the search of where to drill is geochemistry. Which is also presented for the most part in a highly scientific fashion. When I look at it as geochemistry being like breadcrumbs leading an explorer to the prize.

When I look at geology, the way rocks have been laid down over time reminds me a lot of rings on a tree. The layers of rocks are much like the rings on a tree. One can describe the layers of rocks in a complex geological way, or present it in a way that resonates with everybody that has ever looked at the rings on a tree.

Rocks themselves can paint a terrific picture. Some rocks are what deposits of gold, silver, copper and other metals are found in, some aren’t. The drill rig pokes holes into the rocks and can tell the story of when close to a metals deposit or in it. I don’t understand why the industry doesn’t show the rocks in the drill holes in a bigger way. This is a wonderful way to bring investors into the treasure hunting process.

Sure it would take explaining what the different kinds of rocks mean. But that can be enhanced by showing images of rocks, which are available online, from similar deposits to what a company is drilling to find.

The bottom line is that the mining industry can do a much better job of describing what they are doing with enhanced storytelling skills. Used to explain how they are drilling for buried treasures. And the various tools they use in treasure hunting.

We need more new blood investing into the mining sector, but the industry can’t bore them with highly scientific, legalese and accounting jargon. Most importantly, the focus has to be on storytelling that resonates with investors and using digital marketing to spread the word far and wide.

All the best,

Allan Barry Laboucan