Silver: Declining Mine Supplies, Declining Ore Grades, Depleting Supplies

We have been on record for the since mid / lat 2017 stating the silver was going to begin rising in the second half of 2019 and 2020 would be a great year. We have also stated that beyond 2020 silver would begin ascending the charts while the supplies begin to feel the real heat of declining mining activity. The mines are drying up and new mines coming online are far behind their development timelines due to a lack of capital inflows. Why do you think Barrick gold is making a “desperate move” to acquire Newmont? Why do you think Barrick purchased Randgold late in 2018 and used $300 million in Chinese stock options to make the purchase?

The fundamentals have been beat down, made to be completely irrelevant since the massive beat down in 2012, almost 7 seven years ago. This is going to change and the economic laws are going to show the world why they are called laws and not called suggestions.

Mining supplies are dwindling at an ever increasing pace. This is going to change – for the worse. Ore grades are declining as the high producing mines all high graded their mines, in order to stay alive, when the silver “price” was bottom bouncing in 2015. High grading, for those new to the term, is when a mining company focuses on their highest grades of ore to maximum profits and cash flow. This is not sustainable over the long run. Those days are long past and we are now on the decline.

The volume of capital inflows into the resource sector over the past decade has been minimal which means the mining companies can not do the research and development of new mines. They can not do the exploration to find new mines and the smaller companies, the few that are left, are struggling to remain afloat. The “junior mining companies”, the high quality companies, will be bought up as they move closer to proven mineralization. This will only carry the ball so far. It will take another decade to recover from where we stand today IF, and it’s a big IF, these junior companies sell now and then reinvest in another project – presuming another potentially profitable project exist in which to invest.

If you’ve not seen this incredible presentation you need to clear your calendar and give it the 20 minutes that it deserves. If you are concerned about taking care of your family, protecting your wealth and getting a glimpse around the corner then grab a beverage and prepare to be amazed. The next 20 minutes confirms everything that I have been saying since 2017. We are in for one helluva ride. You do what’s best for your situation, we are going to stay strong, stack ’em high and stack ’em while we can. Got physical, close at hand?

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