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The silver market is 15-20% under-supplied, and there is a strong possibility of interest rate cuts and a lower dollar pushing precious metals prices higher within a year, said Craig Parry, founder and chair of Vizsla Silver (TSXV:VZLA).
Parry spoke to Kitco mid-November at the 2023 Precious Metals Summit Zurich event.
“We saw this precedent in 2008, 2009 where the dollar came off during the GFC [Global Financial Crisis] and metal prices performed extraordinarily well,” Parry said. “We’ve got the same setup coming here, I think. I wouldn’t be surprised if we see $3,000 per ounce gold by the back end of next year, but silver of course, in those markets always outperforms [gold]….so I think we’re going to have an extraordinary silver market. I wouldn’t be surprised if we see $100 silver in the next 18 months.”
While there has been some pickup in copper production leading to by-product silver supply entering the market, he said the challenge on the supply side is not enough exploration work has been done over the past 10 years. “That’s led into a lack of permitting and a lack of development so there’s not much out there to come on stream.”
One project that could make a difference is Vizsla Silver’s Panuco silver-gold property in Sinaloa state, Mexico. The project hosts an indicated mineral resource of 104.8 million ounces silver-equivalent and 114.1 Moz AgEq inferred.
The company has raised about $65 million over the past year and still has over $30 million in the treasury. It is conserving cash by halving the number of drill rigs on site. The six remaining rigs are drilling to provide a resource update due out in the first quarter of next year.
Parry said Vizsla Silver is comparable to MAG Silver, whose Juanicipio project in next-door Zacatecas state is owned 44% by MAG Silver and 56% by Fresnillo. However, MAG Silver’s market capitalization is five times greater than Vizsla Silver’s $300 million.
Parry said Mexico mining veterans have commented that the land package owned by Vizsla could be the world’s 10th billion-ounce silver district (five are in Mexico), and he noted the resource base is based on only 15% of the known veins, “a tiny fraction of the property.”
“Watch this space. I’ve never been more confident of something in my life that this is a true district,” he said.
Special coverage of the 2023 Precious Metals Summit Zurich is brought to you by Vizsla Copper Corp. (TSXV:VCU).
0:00 – Silver prices have been moving sideways
2:10 – Why can’t silver break out?
3:35 – Secondary supplies dampening silver market?
6:26 – Incentive prices for new silver supplies
7:20 – Is Vizsla funded?
9:00 – Milestones at Vizsla over the next 12 months
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