5 Critical Factors That Will Impact Silver

The fundamentals for silver today are even better than they were last year when its price and sentiment were higher. Nevertheless, consumer affinity for precious metals has turned rather pessimistic presently. This may be indicated by those who see a rise in the COMEX silver inventories as well as a drop-off in Silver Eagle purchases. Furthermore, our favorite so-called precious metals analysts (more like Bears in a Bull’s skin) have come out of the woodwork to rub it in that the “GOLD BULL MARKET IS NOW OVER.”

For instance, one of these so-called bullion specialists never seems to put in a good word for gold when the price is heading higher. However, when the tide has turned, there is no shortage of negative rhetoric in this analyst’s articles. Another interesting member in this camp of so-called precious metals analysts believes gold stocks are a GOOD BUY at prices 30-50% less than where they are currently – isn’t that nice? I gather this analyst doesn’t play much golf with CEO’s of gold mining companies.

Some believe that when things are down, it’s nice to have friends to lift up one’s spirits. I say, with precious metals friends like this… who needs enemas? Yes, enemas.

And lastly, if you can’t get enough bearish information and data from their articles, some of these fine so-called precious metals analysts offer a subscription service to fill the void. For a fee you will be able to tap in to more detailed information on just how LOUSY gold and silver really are as investments.
With the formalities now aside, we can focus on critical factors that will impact silver in the future. Before we discuss these factors, let’s take a look at some interesting information that took place in the silver industry in 2011.

Northern Vertex drills 50.29 Meter Mineralized Intersection that includes 20 Meters of 1.67 gpt Gold Eqv on Western Extension of Moss Gold-Silver Project

April 30, 2012

Vancouver, B.C. - Northern Vertex Mining Corp. (TSX.V:NEE) (OTCQX:NHVCF) is pleased to announce results from core holes 11 through 17 as part of its Phase II, 20,000 foot (6500 meter) in-fill drill and resource expansion program to test the western extension of the Moss Gold-Silver Project’s stockwork vein system in Mohave County, Northwestern Arizona.

States Northern Vertex Chief Geologist Dr. Bob Thompson, “We are very pleased with current drill results that demonstrate the gold and silver-bearing epithermal system continues to broaden westward, extending an additional 1000 feet from our existing NI 43-101 gold resource. Equally encouraging, the higher-grade zones encountered, occur within a series of thick mineralized intersections that continue to average above internal cut-off grades, remaining open to the west and at depth. Importantly, as we continue our resource expansion to the west, we are encountering the same type of higher-grade zones and consistent internal gold distribution that was instrumental in developing our initial NI 43-101 gold resource.”

Kootenay Hits 18 Meters of 254 gpt Silver Eqv Within 89 Meters of 84 gpt Silver Eqv (*Includes 120 gpt Silver and 3.1% Pb+Zn and 41 gpt Silver and 1.01%Pb+Zn)

Vancouver, British Columbia: Kootenay Silver Inc. (TSX VENTURE: KTN.V) is pleased to announce results from an additional 10 holes from its current 25,000 meter drill program on its Promontorio Silver Project in Sonora, Mexico. The Company reports the two-phase 35,000 meter in-fill drill and resource definition program, comprised of 25,000 meters of core drilling and 10,000 meters of RC drilling is now complete. Work on an independent NI 43-101 resource update to incorporate results from drilling is underway.

States Kootenay CEO James McDonald “The high-grade results achieved from step-out drilling in the Northeast Zone is further testimony to the success of our multi-phase drill program. Since confirming our initial NI 43-101 silver resource in 2010, we established one continuous zone of silver mineralization from the Pit (Discovery) Zone through the Southwest Zone. This zone remains open to the east, west and to depth. We continue to encounter high-grade silver intercepts over widespread areas of silver mineralization in the Northeast Zone, some 700 meters outside of the current NI 43-101 resource. We expect these developments will play a critical factor in sharply boosting the size of our existing silver resource as we prepare for our updated independent NI 43-101 resource study.”

Silver and tin: 2 new critical electric metals, says Byron Capital

Silver and tin are two new critical electric metals that are garnering attention, according to Dr. Jon Hykawy, head of global research, clean technologies at Byron Capital Markets, who kicked off a talk on battery materials at the third annual electric metals conference in Toronto on Thursday.

These two metals are expected to see a sharp boost in demand, leading to a predicted shortage in materials for electronics like iPads and Kindles starting in 2017, and an anticipated increase in prices.
Demand for both silver and tin is driven by the fact that both metals are key components in solder alloys that meet the Restriction of Hazardous Substances (RoHS) directive implemented in the EU in 2006.

The directive, which took effect in July of 2006, recognizes that a large proportion of electronic waste will never be recycled, and therefore the materials within devices will dissipate into the environment. For example, when lead is used in substances such as the solder that connects components to a circuit board in an electronic device, there is no way the lead can be collected.

As a result, the EU said that substances like solder, at least within devices intended for sale in the region, must not contain any of the hazardous materials the directive is concerned with, including lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls and diphenyl ether.

Because of this new law, the search for a new standard solder in the electronics industry began, resulting in a mixture of tin and silver - putting pressure on supplies for both of these metals.

No bubble here — At PDAC, the talk was of high gold prices and sustainability

Resource Clips  Mar 8, 2012 – 10:27 AM ET

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By Ted Niles

At this week’s Prospectors and Developers Association of Canada (PDAC) conference in Toronto, opinions ranged as to what gold’s continuing strength means for the market, but one thing was clear. This ain’t no bubble.

Jeff Berwick of the Dollar Vigilante argues that, adjusted for inflation, “It looks like [the gold price] hasn’t even broken out from its 1980 peak,” adding that the real bubble is in government debt. Goldbears might take issue with Berwick’s math, but John Kaiser, ofKaiser Research Online, notes a glaring divergence from bull runs of the past. “Historically gold and copper are seen as inversely related,” he says. “Gold goes up, and the economy goes down — and, of course, copper goes down with the economy. When the economy is strong, the price of copper goes up, and the price of gold goes down. But we’re in an all or nothing scenario now.” So, if gold and copper are both trending upwards now, if one goes down, the other will follow.

The cause of this scenario is attributed to the decline of American economic supremacy — due to astronomical debt compounded by quantitative easing — and the simultaneous rise of the Asian markets, China’s in particular. “The world is adapting to a very profound change,” Kaiser says. “Which is the end of American empire, the end of the 20th century. Not the demise of America, but [its] relative decline on a global stage. What if what we’re dealing with is structural anxiety related to this idea of relative long-term decline? What if gold is being bought not because of fears of hyperbolic inflation but because of long-term uncertainty about what the world is going to look like?”

Resource Opportunities’ Lawrence Roulston stresses the disparity between Western attitudes of economic “doom and gloom” as compared to the global picture. “When you get out into the rest of the world, it’s a totally different feeling,” he says. “In the Middle East and Asia, they’re asking ‘Where the hell are we going to find enough metal to keep all this going?’ Whether the European economy grows by a couple percent a year or shrinks by a couple percent, it’s absolutely inconsequential to the global mining industry. China right now is a bigger economy than Europe, and it’s developing at a fast pace. The net result is that China is using half the world’s iron ore, a third of its copper and aluminum and a range of other metals. If you want to know what’s going on in the metals markets, don’t look at Europe or North America, look at China and Asia. So growth in metals is going strong, and there’s no question that we’re going to see growth in demand.”

Given the “structural anxiety” accompanying the transition from American supremacy, Kaiser predicts gold will remain between $1,400 and $1,600 for the next five years. This is good news for the gold mining sector, but it raises questions. One, why isn’t a strong gold price reflected in junior mining equities? Two, why has there only been a small increase in gold production since the metal’s historic price lows in 1999 and 2000?

Roulston explains that the “flight to quality and away from risk” by investors over the last year hasn’t yet caught up to the juniors. He argues that it will and that signs point to that process having begun. As regards production, he says, “A decade ago the media dismissed mining as a sunset industry, but things have turned around dramatically. The mining industry is now worth $1 trillion. It’s back on the radar of investment firms. More important, the mining industry is sitting on $100 billion in cash, and they’re looking for a home for it. So, why aren’t we seeing growth in production? It’s not that the mining industry doesn’t want to increase production; they’re simply not able to. There are a lot of new mines being built, but they are barely able to keep up with depletion of the old mines. So, on that basis, production is increasing only slowly. And it’s getting harder to build new mines — it can take a decade. Consider permitting, financing, construction. It’s also getting harder to find big new deposits.”

The average grade in the 1960s was 12 grams per tonne gold; now it is roughly 1.3 g/t.Exploration Insights’ Brent Cook adds that the equivalent of a Carlin Trend is being mined annually worldwide. He says, “There are about 10,000 properties being explored globally right now. The straight-line probability of finding an economic gold deposit of any size is about 1 in 1,000. Finding anything of significance, like 4 million ounces, you’re talking a 1 in 10,000 probability.”

Cook and Global Resource Investments founder Rick Rule are quick to urge caution to investors on this point. While there’s real value in the sector this year, it must be remembered that there are few barriers to entry and that 100% of the juniors’ returns are generated by the top 5%. On the upside, “The gold industry is going to generate almost $3 billion this year.” On the downside, “Every year this industry consumes $4 billion or $5 billion more than [that].”

Investors are encouraged to have an exit strategy. “It doesn’t take much due diligence to throw half of these [companies] out,” Cook says. “Look for the fatal flaw. We know 95% are going to crash. If you can identify that ahead of the crowd, you can make money on a company that does not even have a discovery.”

According to Rule, “You’re not looking for companies to buy; you’re looking for companies to throw away.” He concludes, “My last piece of good news is: I think we’re in discovery cycle. We haven’t been in a discovery cycle for a long time. If you walk around out there, there are some really smart guys in some of those booths. And they have been really well funded for six to 10 years; that’s how long it takes to go into a discovery cycle. We’ve given these guys $4 billion a year — most of it went to fast women and slow horses — but some of it got spent well. And it’s going to come back in spades.”

Read more articles like this at resourceclips.com.

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Posted in: Small Cap News  Tags: Gold, Mining, PDAC 2012, Resource Clips, Ted Niles, Toronto

Philip Ker, analyst with Union Securities talks Kootenay Silver, sees 12 month target of $2.50

Philip Ker, an analyst with Toronto-based Union Securities, expects the junior mining sector to witness an increase in M&A activity throughout the remainder of 2012, which could funnel more capital into the space. Philip’s coverage universe includes several gold juniors with near-term growth catalysts and lofty 12-month target prices. He sat down with SmallCapPower.com to discuss some of the companies Union Securities is covering.


SmallCapPower.com: So you’re saying that virtually everything in the junior resource sector is underperforming, especially those companies working in high-risk jurisdictions. Nonetheless, you have some companies that you believe will eventually perform. What are some of those names?

Philip Ker: Kootenay Silver Inc. (TSX.V: KTN). It’s a unique brecciaed epithermal silver deposit in Sonora State, Mexico. Kootenay is currently wrapping up a 25,000-metre drill program on its Promontorio deposit and plans to publish an initial resource estimate later this quarter. There’s a historical resource estimate of about 25 Moz silver-equivalents, which takes into account some substantial lead and zinc credits. I toured the property in February, and was impressed with the location, as well as the drill core. My target for the resource estimate going forward is 100 Mozsilver-equivalent, which would be a substantial uplift from the previous estimate. Kootenay recently hit some great intersections at Promontorio, particularly in the Northeastern zone where some grades exceeded 800 grams per tonne silver-equivalent.

SmallCapPower.com: Kootenay is trading at about C$0.95. Is there a
warrant outstanding?

Philip Ker: There is and some of those expire this year. It should bring in some capital for the company for future exploration, which is expected to start later this year. The property has numerous untested targets and some may be followed up on in conjunction with delineation drilling at Promontorio.

SmallCapPower.com: What’s your 12-month target on Kootenay?

Philip Ker: My 12-month target is $2.50 based on a conservative in-situ valuation of only $1.25/oz silver.


SmallCapPower.com: That’s great.



Read the full discussion here: 

Northern Vertex builds precious metals portfolio, with 3 projects advancing in 2012

In the last nine months alone, Northern Vertex (CVE:NEE) has managed to acquire two advanced mineral projects with historic reserves and initiate drill campaigns, setting the company on path for a productive year.

The Canadian exploration and mining company’s strategy is to acquire, develop and advance precious metal projects in Canada and the US, targeting the conversion of historical resource estimates to NI 43-101 compliant standards.

In March of last year, Northern Vertex acquired the rights to 70 percent of the Moss gold-silver project in Mohave County, northwestern Arizona, where the company has since completed a 27,000 foot drill program, resulting in the delineation of a substantial NI 43-101 compliant gold-silver resource.

CEO Ken Berry says the company drilled off a current resource of 590,000 ounces of gold equivalent, 90 percent of which is in the measured and indicated category.