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Silver Prices Will Be “Explosive”

The Daniela Cambone Show Mar 22, 2024

In this captivating discussion with Daniela Cambone at this year’s PDAC conference, Phil Baker, CEO of Helca Mining, highlights the glaring disparity between silver’s market price and its underlying fundamentals. With a keen focus on the energy transition, he unveils the pivotal role of photovoltaics in propelling silver demand to unprecedented heights, fueled by the exponential growth of solar installations in recent years. “When I think about the silver price, what I’m looking for is what is happening to create this fundamental demand. And really it’s all about the energy transition,” Phil emphasizes, shedding light on the core drivers shaping silver’s market trajectory. Join us as we navigate through the intricacies of the silver market and uncover Hecla’s ambitious goals for the future!

CHAPTERS:

00:00 Silver market

1:12 Energy transition

2:09 Silver price

2:49 Triple digit silver

3:20 Gold

3:51 Silver over gold

4L16 Bitcoin

4:47 Goal

TRANSCRIPT FROM VIDEO:

Hi, this is Daniela Cambone for ITM Trading, continuing with our coverage here at the Ripley’s Aquarium for arguably the best event during the PDAC, the world’s largest mining conference, the Silver and Gold Reception, which is hosted by various miners, including Hecla. And I’m with the CEO now, Phil Baker. Good to be back with you. It’s been too long.

Yep. Great to be here. What a time to be chatting. I mean, I don’t think I could have picked a better day with the… with the price action that we’re seeing in gold, silver, and Bitcoin, I should say. But first, let’s get your thoughts on what you’re seeing on the silver market here. Well, look, when I look at the silver market, I look at it sort of long term. Right. Hekla’s 100 plus year old company, and we’ve got mines that are gonna operate for clearly 15 years and probably more like 20 or 30 years. And so when I think about the silver price, what I’m looking for is what is happening? to create this fundamental demand. And really it’s all about the energy transition. The energy transition. So talk to me about that. Like you mean like electric vehicles and how much solar will be used there or? It’s really more the photovoltaics, solar energy. You know, just a few years ago, the amount of solar that was being installed was a fraction of where it is today. This past year, it was probably 380 gigawatts worldwide. It takes half a million ounces to put in one gigawatt of solar. So that means we consumed, I don’t know, call it 180, 190 million ounces. The year before it was 140 million ounces. And a year, two years from now it will be well over 250 million ounces. So it’s a huge, huge difference in that silver market, which is only about 1.2 billion ounces. So. almost 15% is just solar now, and it didn’t even really exist before. How much of that is behind the price action that we’re seeing though? Or do you think it has to do more with what we’re seeing in the economy? You know, when you look at where the price is, the price does not match up with what the underlying fundamentals are. And the reason I say that is because you’ve had now three years of deficits. where we’re having to use above ground stock to meet the need. And it’s probably been about half a billion ounces that we’ve had to consume in order to meet the demands, not just for photovoltaics, but for all of the applications. I had Keith Neumeyer on before of First Majestic. Obviously, he’s a big believer. and triple digits over. I don’t know if he’s the first to ever coin that. I mean, do you focus on that? Is that obviously a goal? I mean, you’d love to see that. Yeah, yeah. Look, I’d love to see it. We’ve got these long lived assets and, you know, we will experience whatever the price cycle is. And, you know, our stock, when the prices move, we have historically always been the best performing stock on the New York Stock Exchange. So, so that day is going to come. Yeah, I have to ask you, though. Because I even spoke about this with Pierre Lassonde in terms of gold stocks and why, you know, there’s price action in gold, but it’s not being reflected in the miners yet. I mean, when’s the catch up going to happen here? Nobody knows, you know, and so you need to have assets that can go through the cycle. So is it going to take a month? Is it going to take three years? Who knows? But we have assets that can do well, no matter what the price environment. As a metal, is it always silver over gold for you? And it always has been. Well, Hekla is a 130-year-old silver company. And we have done gold for about 50 years. And gold is very important for us because it stabilizes this very volatile silver price. But there’s a fundamental underlying demand for silver. And it’s growing. I want to ask you about, obviously, the price action in Bitcoin. And we see. how there was money flowing out of gold ETFs into the Bitcoin ETFs. I mean, do you focus? I don’t focus on Bitcoin. How do you not get caught up in that? I think it’s because of the nature of our shareholders. We have 77,000 shareholders and they are focused on silver for the most part. You’ll have small groups that maybe are involved in Bitcoin, but for the most part, they understand the value of silver. Phil, finally, what do you want the folks at home to know about? the goals for Hecla this year, what’s your focus? Well look, Hecla is probably the fastest growing silver company in the world. Just in 2018, we produced 10 million ounces of silver. And by the way, I don’t talk about equivalents. You can’t use an equivalent ounce in a solar cell. So 10 million ounces this past year was 14. This year we should be about 16, almost 17. In two years, we should be 20 million ounces of silver.

Phil, I’ll let you get to this incredible event. Over 2,000 people expected tonight. Hopefully you’ll have some fun. Thank you for stopping by and thank you for watching. We’ll have more great content coming your way, so be sure to stay tuned to the Daniela Cambone show here on ITM Trading and don’t forget to sign up at danielacambone.com to stay on top of it all. Thanks for watching.

Sources & References In This Article

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