Gold Is In A Powerful Bull Market With Silver And Copper Joining The Party
In this report I discussed my top silver stock picks SilverCrest Metals and Kootenay Silver.
My reporting is often on gold because I’m extremely bullish due to the Death Spiral of Debt causing a return to the Gold Standard. In addition, the supply and demand fundamentals for gold are very bullish, as they are for silver and copper.
Gold, silver and copper have suffered from too many years of underinvestment in their respective supply chains. Not enough exploration success, that leads to projects advancing to development, not enough new mines, and miners relying for too long on old mines that are being depleted at a faster rate than they can be replaced.
My bullishness toward gold is based on its attractiveness as a sound money asset that central bankers are aggressively buying. Silver has monetary attributes and is also being gobbled up for solar panels, which collectively are moving it toward a serious supply crunch.
When it comes to gold stocks, I am able to find a strong group to cover in majors, mid-tiers, small miners and explorers. But, I have a challenging task to find a lot of great silver stories. In fact, at the moment only two of my picks are involved in silver.
My top pick for silver miners is SilverCrest Metals. I’m a big fan of the company and have featured them many times in the reports due to their remarkable Las Chispas silver and gold mine in Mexico.
Las Chispas is an exceptional new mine in its early days of full commercial production. In its first few quarters of full commercial mining it paid down its debt, paid off $23 million in taxes, bought back stock and built up a war chest of cash plus silver and gold. When it comes to new precious metals mines, it is one the best in the world.
I’m a big fan of the mine and also the business acumen of their management. Instead of selling all their production of silver and gold for fiat currency, they keep what cash they need for operating the company, then sit on silver and gold. Of their overall war chest, over 20% of it is in silver and gold.
This is a fantastic strategy for three key reasons. One, is that it sends the message that they eat their own cooking, while gold and silver miners promote precious metals as a good place to store wealth and to fight inflation, few do it.
Secondly, they set themselves apart from their peers, and are an example to other silver and gold miners. More gold and silver miners should follow their lead.
Thirdly, they are bullish on gold and silver, and holding onto it has been a lucrative move, especially over the past two quarters.
Finally, and most importantly, they do it because they can, the reason they can is they have a mine that is a free cash flow machine.
Kootenay Silver reminds me of SilverCrest when they were in the early days of exploring the Las Chispas mine. Kootenay Silver’s Columba project has the same geological hallmarks as Las Chispas and it is one the very best high-grade silver discovery stories in the exploration space and yet still has a modest valuation. Which makes it my highest conviction silver discovery pick.
Earlier this year, Kootenay Silver got cashed up with a $10 million financing that allows them to do an aggressive drilling campaign at Columba. Recently, they added their second drill rig to the project. They will have strong news flow for the rest of 2024 and into 2025.
Their timing to do a big drill program is very good because silver has broken out lately, and for those that want to look for silver explorers with outstanding high-grade silver discoveries, there is only a small menu to choose from.
In Closing
In this report, I wanted to remind folks that I am extremely bullish on gold, and think silver and copper are also very compelling. I do have a harder time finding good silver and copper stocks.
I highlighted my top silver picks in this report. I have a few more on my radar screen, I’m looking for the right timing to make them current picks. Without a doubt, SilverCrest Metals and Kootenay Silver are strong picks that are well positioned to gain attention as silver gains strength, which I am convinced it will.
In my next report, I will talk more about copper and highlight my top copper stock picks.
All the best,
Allan Barry Laboucan
Disclosure
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