Has Silver Entered Its Next Bull Market…

Has Silver Entered Its Next Bull Market…

I see a lot of similarities with 20012
2002 when I got into the business and
that was the beginning of a 10-year bull
market you know that went until
[Music]
2011 well hello there my friends Chris
Marcus here with you for arcade
economics and we are going to be digging
into the silver side of things today as
been an interesting uh couple months
here we’ve had quite a rally
and then we are recording on Monday
morning where as by the time you’re
watching this you’ll have known quite a
selloff I would suggest not the most
unexpected thing in the world especially
given the rate and speed at which prices
have been rising in silver and gold as
well uh but to dig into some of those
Dynamics someone who is running a
company that will be going into
production in a couple of months uh
later this year so be great to get his
insight into what he’s seeing and
hearing on the silver market and that is
of course David Stein of kuya silver
David it’s a pleasure to have you back
on here today and dig into all the
things we’ve seen in the past couple
months so most importantly how are you
doing today my
friend um well thanks Chris for having
me and I’m doing well how are you doing
good and I’ll I’ll start with as we
mentioned right before we hit
recording interesting to see gold down
$65 on a Monday yet still Trading at23
350 so I’m curious how people are
reacting out there I mean obviously
price is down silver having a hard
Monday as well down a157 although still
above $27 so if you went back to the
beginning of the year I think most
people would have signed up for this of
course uh always can be a a little bit
unnerving when you see some of these
declines we also did see something like
this about a week and a half ago on that
Friday where silver touched close to $30
then there was that big reversal in both
gold and silver but perhaps to begin
would love to hear your thoughts of
anything that you’ve seen or been
thinking about as we’ve seen the rally
uh you can talk about the selloff as
well but certainly in the conversations
you have at the conferences or with some
of the investing funds as well just love
to get any feedback or observations
you’ve had on what we’ve seen so
far sure well um so to kind of take a
step back I mean
I I obviously look at the silver price
very very closely and and the gold price
along with it because they are you know
they’re uh tied together um I I look
even more at the equity prices um
because you know I do run a silver
mining company and
um and so uh I care a lot about how the
equities are doing uh not just the metal
price and sometimes often they are tied
together and they move in the same
direction but sometimes they don’t so so
those that that can be interesting um
either way uh now if you go back to
February um the low on the bag um
indexes uh for gold and silver uh GDX
gdxj s
SJ uh was February 28th so if you go
back to February 28th that’s when the m
hit a low price uh at least in the
recent trading last few years and uh and
then we’ve had this big rally since then
so basically the whole month of March
and then we got about through about half
of April before you know before we’re
seeing this now uh pretty significant
correction at least in terms of the
volatility um and so you know this is
definitely going to scare some investors
uh out of their position I here um in in
the precious metals whether it be the
metal itself or whether it be the
miners uh and and that you know we’re
definitely we’re seeing that um you know
we’re seeing that with our stock we’re
seeing that with the the sector in
general uh as well now you know some of
the you know other industry
observations that we’re seeing in the
last few months
um
uh big uptick I think uh interest in m&a
activity and um you know m&a deals it’s
it’s very you know they they take a long
time so it’s hard to pinpoint them to
the last month and a half of the the
rally and and and that’s causing them so
it’s possible these are were in the
works before um but what I find in you
know and I’ve been in minding Capital
markets now for more than 20 years is
that when you do get into these rally
periods it sort of greases the wheels so
things that were in progress start
happening faster because there’s a lot
more incentive on both sides to get a
deal done to get the announcement out to
you know to to show something to
investors uh before they forget about
you and go to something else the next
shiny new object that’s out there so we
we are seeing a big you know uptick in
m&a activity in the last few weeks and I
think that’s a really positive thing
that you know that that whole you know
subject has been dead for a long time
time and you know we saw there’s a big
gold merger today that’s going to create
you know a new almost $2 billion gold
you know kind of mid-tier gold company
um there’s been some smaller deals as
well bigger companies picking off
smaller companies uh in the last few
weeks so I think that’s kind of
interesting as well and and speaks to um
you know uh what should be a stronger
longer term rally here yeah and it’s it
seems like we’re starting to see the
beginnings of some of the investment
funds coming back to Silver whereas
for g i I still often think back to that
silver simposium we were at back in
September of 2022 where actually ended
up being the bottom of the cycle silver
going down below $18 and since then
there’s been about year and a half of we
see retail to some degree involved yet
wondering when the money is going to
come back in several of the executives
I’ve talked to have said they’ve started
to see signs of that I know you’re
mentioned that on the m&a side but uh
does does that match uh what you’ve been
seeing in the individual stocks as well
where funds are coming back in a little
bit maybe a little bit cautiously but
still starting to participate
again yeah um I definitely have been
seeing that especially the last month
and a half
um you know uh I think a good a good
thing to look at is is trading volume um
and uh and you know certainly ours has
been a lot higher and I’m sure a lot of
our peers uh the trading volume’s been a
lot higher um really most of this year
now uh and uh you know that that’s
attribute you got to attribute some of
that to new uh investors coming back in
and funds that are maybe moving down cap
as well that’s a really important factor
as well is that when um you know when
investors do sort of make that first
call into uh the mining sector gold or
silver mining sector they’ll typically
buy the biggest ones because they’re
they’re not really convinced themselves
yet um and so they want something that
they can sell really easily if they
change their mind and of course the the
the the ones that are the most liquid
would be things like baric and neumont
Franco
Nevada um and then as they get more
comfortable and they you know are are
more convinced of the thesis they’ll
start to move down to um and take more
and more risk with their
portfolios and uh you know there there’s
no question that if you can buy a good
Junior in a bull market you’re gonna you
know you’re going to outperform a senior
by many many fold um like hundreds of
percent that you know is you’re going to
do way way better so it becomes
definitely a bit of a a crowding into
the Juniors of eventually um especially
silver because there’s so few silver
companies out there that are you know
that legitimately you know mine and have
you know silver resources so um so that
that is something that we can look
forward to I don’t think we’re there yet
it’s just it’s very very light the
investment right now um but definitely
moving in a positive
direction yeah and I would imagine that
won’t necessarily be something that
happens overnight although reminds me of
a few things you and I have talked about
in the past couple weeks offline where
on one hand we now have Costco selling
out silver which I wonder if there’s
some impact there where you start to get
something in a mainstream Consciousness
uh although the other thing you and I
have discussed a bit that I was hoping
you could just walk through again as
we’re recording here where we talked
about the difference obviously silver
has reached these levels a couple times
in the past few years and will pull up
the S index chart here and we’re still
quite a ways away there it was at 48
bucks back in
2021 so on one hand I think you could
say that the silver stocks have lagged
on the other hand to be fair there are
some differences in the economic
conditions and uh if you remember what
we talked about perhaps you could just
give a recap of that for people who are
watching at home and some of the things
that you factor in as I know you are
also active in investing in the stocks
of course in addition to running in Kua
but perhaps you could walk through that
and give people a few things to think
about there sure well look I think I
think what you’re alluding to is is the
risk- free rates um which have
definitely gone up since 2020 uh 2021
you know we were we were at uh basically
zero uh 0% interest rates which is you
know kind of the risk-free rate that
goes into the calculation when you’re
valuing future cash flows
um and you know so that can be a big
factor it’s not the only factor that you
look at when you’re you know when you’re
investing in the mining company but um
you know if you’re trying to put a value
on um production that’s five or 10 years
away um then the lower the interest rate
the better frankly and of course with
interest rates you know up uh that you
know that that that hurts that
calculation um and so that’s probably a
factor um you know the the other the
other thing though
um is uh here just to keep in mind is
that this particular index it’s it’s
kind of packed with some very large
companies as well and some very large
companies that actually don’t produce a
lot of silver in terms of percentage of
Revenue um so you know it’s it’s almost
more like uh a mid-tier gold
index um but and nevertheless we there’s
no there’s no like perfect way to you
know to index uh silver mining stocks
unfortunately it’s probably you know
this and the sij are probably the best
tools we have but
um um but that’s just another another
thing to keep in mind um however with
metal prices higher there’s you know
there’s there’s no reason why these uh
prices can’t go back up to to where they
were before and and Beyond you know 50
$50 on this particular index and this
particular
ETF
um and uh you know in fact I’m sure if
we you know if or when we get into a
longer term uh bull market which is I
think really the story that investors
should focus on is is the is you know
are we are we in the next 10e bull
market for precious metals um and you
can make your own decision but if you
are then you know then anything you buy
right now pretty much is going to be up
a lot
um you know in the next few years and
that’s where I honestly think we are I I
I see a lot of similarities with 20012
2002 when I got into the business and um
you know that was the beginning of a
10year bll market you know that went
until 2011 to 2012 depending on what you
know sort of index you look at but um
you had a good 10 years there you know
and it included the credit crisis sort
of crashing and recovering very quickly
but you know uh but but but within that
um blip uh you had a good 10 years of a
bull market where you know good quality
companies in in gold or silver um
especially ones that actually survived
the whole time without getting taken
over uh they they went up hundreds and
hundreds of percent in fact you know you
know some of them thousands of percent
uh return uh if you go from you know
kind of 012 to to the to the end of that
rally so there’s just some extraordinary
returns possible obviously this is not
investment advice and you you have to
pick the right companies but that’s you
know to me that that was my you know
that was my job you know back then and
it’s still my job now even though I’m
running a company now but um that to me
that’s that’s an extraordinary almost
you know generational opportunity that
you know that we made in the very early
days
are yeah and I think well said where
especially with silver i g if there’s
ever been an asset class where there’s
benefit to being able to take a step
away from the day-to-day movement in
prices I think that would be it and
especially David I’ll mention that at
the same time that we’ve seen this rally
again we we still have the higher
interest rates here’s a look at the
pricing where now we see one rate cut
priced in for the rest of the year we
were looking at estimates of five to six
rate cuts um earlier when we began the
year although inflation has not come
down quite to the targets had hoped for
and I would suggest maybe the US
government not making that any easier
here we see over the weekend uh voted to
borrow another 100 billion to send to
Ukraine which a lot of things fueling
inflation and um
any thoughts in General on what you’re
expecting out of the Federal Reserve
this year where now again we have
forecast pricing in just one rate cut at
this point well it’s interesting because
I think when when the when the five or
six rate Cuts were expected the the gold
and silver prices were actually quite a
bit lower than they are
today um which which is not which is
counterintuitive you would expect the
opposite so we have very strong you know
precious metals Market um
despite this this longer for higher for
longer
narrative and uh you know it is it is
sort of very difficult to see what the
Catalyst will be for the FED to start
cutting interest rates right now um I I
think the the what may happen is is
eventually the you know there’ll be some
maybe impetus to to to try
and boost uh economic activity a little
bit starts to languish um and and maybe
maybe you know drop by you know quarter
basis points kind of thing but I don’t
see any I don’t expect anything dramatic
unless we have a black one event so um
so I I I think really the interest rate
story is almost not a story for this
year um and uh you know and we’ll we’ll
have to look at other other you know uh
macro factors
um currencies
uh the election um you know geopolitical
risk other things like that I think
we’ll probably have a bigger bearing on
the gold price and therefore andless the
silver price than uh than interest rates
well yeah and interesting you mentioned
the election in there especially since
last week or two there’s been a handful
of stories Judy Shelton comment who was
uh part of Trump’s team commenting on
the possibility of a gold standard and
few other articles saying suggesting
that
Trump’s overall team at least
considering that so would be quite uh
quite a day if we woke up going back to
a gold standard one day yet either case
uh sure a lot uh will depend on the
election coming up in just a couple
months one other thing I wanted to
mention here before we took a quick look
at kuya we did have the silver Institute
put out their world silver survey
last week uh yeah and as we see here a
deficit in 2023 of 184 million ounces
interesting they’re calculating or
forecasting rather an even bigger
deficit for
2024 and the one thing I wanted to ask
you about is we see the mine production
peaked back in
2016 obviously you and I as well as
other people have been on the show have
talked about what kind of production
comes online at higher prices but just
in a more General sense in the next 5 to
10
years what do you see happening with the
Mine Supply do you think it’s realistic
that we’re substantially higher is that
feasible to get back to that $900
million Mark or when you look at let’s
say we had a silver price stay around
here at least for the next couple of
years what do you see with the Mine
Supply in the next half or full decade
or so so you know so basically you need
another 880 million ounces um roughly of
of annual
production and that’s got to be net of
all the losses that you know that that
typically happen just from uh uh you
know M mind
depletion so um so that I mean that’s
that’s a that’s not going to happen in
any one year or close to that that
that’ll probably take another decade to
get back back up to that level would be
my my suggestion um
uh we’re just we’re not really seeing
the clues that would suggest we’re even
going in on an ready to go on an uptrend
in mind
production um you know there there was a
there is a lot of money or there was
more money being raised in the last
month I mean that is one thing to look
at
um for for for uh for juniors um but by
and large the money is all going into
exploration which does not translate
into new production for a very very long
time so you know so that’s not really
helping uh the Mind Supply at least go
up um and the other thing is I think the
the larger sort of the leaders of the of
the of the silver mining industry there
are some of them that are doing doing
well but but there’s quite a few that
are still even at these prices you know
languishing in terms of their cash flow
and their
profitability and and so and you’re you
know and so I I I’m not sensing that
there’s a lot of expansion uh going on
there with with those bigger companies
you know that can be a source of new
production is if you know let’s say
first Majestic takes one of their and
I’m not an expert on first Majestic but
say they take one of their Silver Mines
they say well we’re making so much money
over here let’s sync a 100 million into
this mine and you know increase
production that stuff is not happening
right now uh whatsoever and um and and
so uh so that’s so I just I don’t see
any signs right now anecdotally or
otherwise that the that the M Supply is
going to grow uh in the next few years
and of course you know you you know I
guess Metals Focus agrees with me there
they’re forecasting a small reduction I
think it was 8:30 to
8:23 um but uh but yeah you know it’s
it’s
[Music]
um uh I think we’ve got a long way to go
before before M mind Supply sort of
catches back up to where it was yeah I’d
certainly agree with that although one
area you said there’s no signs of new
production coming out maybe you didn’t
say that exactly but I will point to one
sign of some new production coming out
that I know you’re quite happy about
which is your Bethania mine down in Peru
and uh perhaps you could give people an
update on where it stands in the
timeline of going into
production perhaps also the full amount
once production is ramped up and a
little bit on the cost structure as well
so people can be up to date on what you
have going on there sure yeah we we we
won’t contribute a whole lot to the
global Supply this calendar year um you
know uh maybe a few hundred thousand
ounces but uh we um we are uh we’re in
the sort of the latter stages of of uh
you know the underground development
that we need to do to prepare the mine
for production and we are looking to you
know sort of start production and and a
rampup process uh later this
quarter and uh and then continue that uh
ramp up over about another 12 months so
we’d be looking at full production or
maybe full as the wrong word but our
initial Target production from the
bethan mine we we’d hit that around mid
2025 and at that rate we’ll be producing
you know over a million ounces of of
silver equivalent um so maybe about a
million ounces a year of pure silver and
you know that’s intended to be just sort
of phase one and we you know we’ve all
said all along that we think the p is
going to get a lot bigger and but we
want to we want to get some production
going first and start you know we you
know we believe our our costs are going
to be very low especially once we get up
to that full production rate next year
um and so we can make quite a bit of
cash flow you know even at a million
ounces a year and that you know and and
you know if we can put some of that back
into exploration or uh you know look at
using that to expand or both um you know
that kind of organic growth I think is
is going to be very very lucrative and
as a large shareholder myself of kuya
that’s really what we’re what we’re
looking for is you know to to maximize
the growth of the company uh minimize
delution and you know we can do that by
generating some of our own cash
flow okay and what what are you
expecting as an Allin sustaining cost uh
once that is ramped up well I I don’t
think we’ve ever given you know sort of
formal guidance based on our new new
plan but I I guess what I can say is
that um in our paa uh that you know
that’s a couple years old now we we had
kind of a range of 102 an ounce uh all
in Su sustaining now that was if we
build our own Mill and we’re not doing
that right now we’re doing toll Mill for
the first you know year or so and then
build our our Mill later um so the toll
Mill will we’ll add a few dollars two
maybe $3 an ounce to our costs and uh on
on all and sustaining basis but again
it’s it’s worth it for us because we
save so much Capital up front um that’s
very difficult to to raise right now uh
without you know without just kind of
you know
deluding uh the shareholders to Smither
so we’re able to do that and at least
you know uh get some production going
some cash flow going uh and uh we’ll be
in a much stronger position to build
that Mill when we decide to do so in
next two years okay that makes sense and
at the same time you’re doing that you
also did have an announcement about two
months ago that you were involved in the
um Hadid silver project interesting over
in Saudi Arabia and curious if you could
give us a quick update there and also
curious if that’s helped to exp expose
you guys to a new group of investors
that uh a little bit different than as
you phrased it in one of your mailings
just the typical gold and silver crowd
that is going to the show so anything
you could touch on on that one yeah I
mean interesting you point to that one
um that that’s um you know definitely an
unusual um you know deal for us but um
the background there is that we were
already in the region um and we have
been for for quite a while we have some
big shareholders in the Middle East and
we’re you know uh we’ got us strong
presence there we’ve been attending the
future minerals Forum which is a fairly
new conference that they they hold in
Riyad Saudi Arabia I think this year
2024 was the third year they do it in
January and um couple years ago you know
we were um you know and we’ve we’ve been
a speaker there and and uh had you know
had a very very different presences over
the years and uh this year uh 2023 the
the Saudi government um uh released a
portfolio of properties uh to be bid on
to kind of an auction process um but
you’re not actually paying them what
you’re doing is your your bid is how
much you want to you’re going to spend
on on the project they because they they
want they want money to be going in the
ground there uh to raise the the the the
mining industry up to boost the mining
industry and um you know also uh social
you know CSR environmental that all that
goes into the bid and um and so we
partnered with a Saudi company uh they
were really leaning on us for the
expertise the mining expertise and the
exploration expertise um and so we were
able to partner with them they provided
um the funding for it for the bid and uh
and we’ll and you know together we were
able to win it so that was just
announced in January and um
uh and and again you know as you alluded
to really are you know you know I don’t
see us you know uh as kuya at least
going and starting a mine in Saudi
Arabia um first of all this is a very
early stage project and it would be many
years before it would be in production
even if it’s even if everything works
out but with that being said um you know
it is a it is a region that has uh you
know definitely an appetite for
investment into the mining industry
they’re looking at ways to do that both
domestically and foreign and outside of
Saudi Arabia and I think um by
developing these Partnerships it gives
Kia an advantage you know to tap into
that that that Universe uh when we
needed in the future uh and certainly um
for bigger opportunities um it is a
great place to to go uh and you know get
get partners get get financing
Etc um and and with that
with that being said the the Saudi
government is very very serious about
developing a a mining industry you know
I would say about between 2third and 40%
of Saudi Arabia is um you know kind of
exposed rock at surface and and
favorable to Mineral exploration um but
despite that very little has been done
because of the focus on oil and gas in
that country and so uh they they do see
an opportunity to to have a you know a
new
kind of wave of mineral exploration
going through the country that should
lead to some new mines in the next 10
years um and uh yeah and so uh so it’s
it’ll be great if we can be a part of
that yeah especially like you said
earlier if we are at the beginning of a
10year bull market then certainly seems
to be good to have a investment partner
there and seen a lot of plans for them
to increase their mining access and of
course the Saudis were one of the
investment groups that
does have some history with their
involvement back in what we saw on the
spike in 1980s so glad to see that you
have some new partners out there and
also taking bethana forward so seems
like good times and good things are
happening and David perhaps just
wrapping up you could let people know if
they have any questions about what
you’re doing at kuya or would like to
get in touch what’s the best way to do
so um well I would say go to our website
and um we’ve got a contact tab there and
uh we have you know a number of ways for
for people to contact us but they can
you know um they can contact us there um
it’ll go to our info at silver.com
email um can book a meeting uh with uh
with us and um and then we’ve also got
all of our social media on there you can
follow us um on LinkedIn acts Facebook
Instagram Etc and we’re we’re uh we’re
happy to to stay in contact with our our
fans our many fans and shareholders on
on those platforms as well well I
appreciate that and that’s at kuas
silver.com link also in the description
field below and David great as always to
catch up with you and really nice uh I
guess that’s one of the things that
happens when you’re doing something for
Years or or decades but at least uh you
and I talking about silver for years and
thinking back especially to that 2022
silver Symposium and nice to see when
things turn around a bit and also
projects get moved forward so I say
congratulations to you on everything
you’ve been doing and great to catch up
with you as always we’ll have to do this
again soon thank you very much Chris it
was my pleasure
[Music]

Has #Silver Entered Its Next Bull Market…

With gold and silver rallying over the past 2 months, while the threat of additional financial sanctions continues to grow seemingly by the day, precious metals investors are wondering whether the next bull market has finally begun.

So in today’s show, I talk with David Stein of Kuya Silver about the current rally, and whether this is the beginning of the bigger move so many have expected following a decade of 0% interest rates along with years of de-dollarization.

David talks about some of the similarities between what we’re seeing now and the rally in the metals between the turn of the century and 2011, the subdued response by the mining stocks, and how likely he sees a significant increase in the mine supply of silver in the years ahead.

To find out more about the latest in the silver market, click to watch this video now!

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