PHYSICAL SILVER DELIVERY FROM LBMA UP 73% IN NOVEMBER
but this newsletter recognizes that paper contracts are a nuisance at best
The unprecedented draining of silver vaults and soaring demand for physical silver are signaling a potential paradigm shift in the precious metals market. Recent data reveals staggering outflows from London Bullion Market Association (LBMA) vaults, with November deliveries on track to eclipse October's already massive withdrawals. This surge in physical demand, driven by industrial needs and investor appetite, is rapidly depleting above-ground silver stocks.
The root causes are multifaceted: exploding use in green technologies, especially solar panels, aerospace and military ( and growing industrial applications in electronics; and increased investment demand as a hedge against economic uncertainty. )
This perfect storm of factors is creating a structural deficit in the silver market, with demand consistently outpacing supply.
As inventories dwindle, the disconnect between paper and physical silver markets becomes more apparent. Our pending silver supply crunch looms large, with implications for both industrial users and investors. If this trend continues, we will witness a significant repricing of silver as the market grapples with physical scarcity.
This situation underscores the importance of understanding the dynamics of physical metal markets in an era of rapid technological change and economic transformation. The silver squeeze could be a harbinger of broader shifts in commodity markets as the world transitions to an electrified economy.
The stark contrast between paper and physical silver markets continues to widen, highlighting potential vulnerabilities in the current system.
photo from Twitter handle @Thedudesetx00
Yesterday, a staggering 448 million paper ounces of silver were traded, dwarfing the mere 4 deliveries on COMEX and 1,950 on LBMA. This disparity underscores the massive leverage in paper markets, with hundreds of paper claims existing for each ounce of physical silver
Meanwhile, India is capitalizing on the recent price drop, aggressively purchasing physical silver. This surge in demand for tangible metal contrasts sharply with the paper-dominated trading landscape. As the U.S. national debt surpasses $36 trillion, investors may increasingly turn to precious metals as a hedge, potentially exacerbating the disconnect between paper and physical markets
This situation highlights that current silver prices may not accurately reflect fundamental supply and demand dynamics.
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Silver Academy endorses only 5 Silver miners that are pure silver mines (not silver as by product mines)
We have selected our picks based on the strength of:
Their balance sheets
Their Ore grades
Their Metallurgy
Their Management talent
Their Jurisdiction.
and most importantly their volume of ounces in the ground
Silver Academy’s top 5 picks
Andean Precious Metals: TSXV: APM, OTCQX: ANPMF
The company operates the largest commercial silver oxide processing plant in Bolivia's Cerro Rico region - the San Bartolomé facility. This strategic asset has produced over 65 million ounces of silver equivalents since 2009, demonstrating Andean's significant production capabilities.
Their robust balance sheet provides the company with financial flexibility and stability in a volatile industry.
The company follows a two-pronged growth strategy, focusing on organic growth in Bolivia and expansion through mergers and acquisitions in the wider Americas. This approach positions Andean for sustainable long-term growth and diversification.
Andean has successfully extended the life of the San Bartolomé mine from eight months to potentially 10 years or more, showcasing the company's operational expertise and ability to maximize asset value.
The company is committed to sustainable mining practices and community engagement, contributing approximately $75 million annually to the local economy through wages, royalties, and taxes. This dedication to social responsibility strengthens Andean's social license to operate.
By acquiring Golden Queen Mining Company (USA), Andean Precious Metals has taken a significant step towards achieving its vision of becoming a multi-jurisdictional mid-tier producer in the Americas, while positioning itself for sustainable long-term growth
Aya Gold & Silver: TSX: AYA, OTCQX: AYASF
Latest news from Aya Gold & Silver
Aya Gold & Silver Pops 12% on spectacular Q3 Earnings Call
Aya Gold & Silver Inc. is a leading silver producer, uniquely positioned as the only pure silver mining company listed on the TSX, with a strong operational base in Morocco. The company has recently reported record revenues of $13.7 million in Q2 2024, reflecting a remarkable 42% increase from the previous year, showcasing its robust growth trajectory and commitment to maximizing shareholder value. With ongoing expansions at the high-grade Zgounder Silver Mine, Aya is set to increase its processing capacity to 2,700 tonnes per day in 2024, further solidifying its market presence. Additionally, Aya's strategic exploration efforts have led to significant mineral resource estimates, including a recent discovery at the Boumadine project, which highlights the company's potential for future growth and profitability. Committed to sustainability, Aya Gold & Silver integrates responsible mining practices into its operations, ensuring long-term value creation for its stakeholders
*Dolly Varden Silver: TSXV: DV, OTCQX: DOLLF
Dolly Varden Silver Corporation is a leading mineral exploration company making significant strides in the heart of British Columbia's Golden Triangle, focusing on its 100% held Kitsault Valley Project. This project boasts an impressive resource estimate of 64 million ounces of silver and 1 million ounces of gold, positioning Dolly Varden as a key player in the precious metals sector. The company is committed to sustainable mining practices while leveraging its rich history, including the past-producing Dolly Varden and Torbrit silver mines, to unlock further potential in the region. With a strong management team and recent discoveries enhancing its growth prospects, Dolly Varden Silver is poised for a bright future in the booming silver market. Investors can look forward to exciting developments as Dolly Varden continues to advance its projects and expand its resource base.
*Outcrop Silver: TSXV: OCG, OTCQX: OCGSF
Outcrop Silver is advancing its flagship Santa Ana project in Colombia, one of the highest-grade primary silver deposits globally. The maiden resource estimate defines 24.2 million ounces of indicated silver equivalent at a grade of 614 grams per tonne and 13.5 million ounces of inferred silver equivalent at 435 grams per tonne. Recent metallurgical testing has yielded outstanding recoveries of 96.3% for silver and 98.5% for gold through a combination of gravimetric and flotation methods, significantly enhancing the project's economic potential.
With two active drill rigs, 2024 is a pivotal year for Outcrop Silver as the team explores new high-priority targets along the 17-kilometre permitted corridor, part of the project's extensive 30-kilometre strike mineralized trend. Looking ahead to 2025, Outcrop Silver remains focused on substantial resource growth and unlocking the full potential of this silver-rich region. The company’s success is underpinned by both impressive drilling results and strong community relationships, which are key to driving sustainable growth.
Outcrop Silver is uniquely positioned to capitalize on silver market dynamics, reinforced by Eric Sprott's increased investment to 19%, a clear vote of confidence in the project's potential and strategic direction.
Kuya Silver: CSE: KUYA, OTCQB: KUYAF
Kuya Silver is at the forefront of silver mining with its dual-track strategy, actively mining the high potential Bethania Silver Mine in Peru and developing the historic Silver Kings Project in Ontario. With robust mining and exploration programs underway, Kuya is poised to unlock significant value from its assets. Kuya Silver's experienced management team, led by industry veterans, is dedicated to maximizing shareholder value through strategic growth and operational excellence. As the demand for silver continues to rise, Kuya Silver stands ready to capitalize on emerging opportunities in the market.
Note * denotes a discovery project vs an operating mine.
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Crypto: The Emperor's New Digital Clothes
In the dazzling world of cryptocurrency, enthusiasts tout a financial revolution. Yet, this digital gold rush is built on shaky ground. Crypto has never weathered a true economic storm, leaving its resilience untested.
Unlike tangible assets with intrinsic value and real-world applications, cryptocurrencies exist in a vulnerable digital realm, susceptible to hacking, seizure, and obsolescence.
As traditional markets teeter on the brink of recession, crypto's true nature may be exposed. The current market resembles a treacherous obstacle course, overvalued and primed for a spectacular fall.
This digital house of cards could easily collapse, washing away the excess liquidity pumped in during recent years.
Investors beware: when the economic tide recedes, we may discover who's been swimming naked in the crypto pool.
Pro Tip
Don’t get sucked in