Silver prices currently sit near 5-year lows, despite stronger-thanever fundamentals.
With more claims on silver in existence than could possibly be delivered, an upside price explosion is setting up.
Position yourself to profit from the coming silver mania – it’s never been easier!
This Presentations focuses on Factors affecting the Gold Prices.
It also includes various data charts showing price trends.
It also Explains the expected Trend and Measure to Nullify the Risk.
Silver prices currently sit near 5-year lows, despite stronger-thanever fundamentals.
With more claims on silver in existence than could possibly be delivered, an upside price explosion is setting up.
Position yourself to profit from the coming silver mania – it’s never been easier!
This Presentations focuses on Factors affecting the Gold Prices.
It also includes various data charts showing price trends.
It also Explains the expected Trend and Measure to Nullify the Risk.
Discover why gold & silver will never be worthless like other investments. Learn why gold & silver is a financial safe-house for investors. Uncover how metals can diversify your portfolio in times of inflation & market stress. Learn why gold & silver is undervalued and how to take advantage of it. Features: supply & demand charts, precious metals trends, long & short term price projections and more!
Silver Recycling Volumes Forecast to Stagnate Over The Next Three Years — Eve...Chris Helweg
Silver Recycling Volumes Forecast to Stagnate Over The Next Three Years Even If Prices Rally Significantly.
Silver recycling is projected to decline to 178.0 Moz (5,536t) by 2017. This is 14% lower than the 2011 peak, as growth is only expected to average 3% a year, even if prices rally to over $20.
Gold is Every Once Dream , make your Golden Dreams Come True with GRM GOLD INDIA LIMITED. Just Pay Rs.260/- pm and Lock your Gold rate.Pure Certified 999.9 Gold & Silver Coins , Flexible easy Installments , Agreement Transfer Facility , Any Time Exit ,Agreement Buy Back with 12% p.a., Free Accidental Insurance up to 10 Lakhs.ESC facility.Track your account online. Life Time career plan to earn monthly 1 lakh and above. www.grmgoldindia.com . Email: grmgold@gmail.com . Mobile No : 09346827933 / 08867584041 / 09177443123
Key Views
What will diamond supply look like ten years from now?
Mother Earth decides what types of diamonds are going to be available for consumption. Thus, supply of diamonds generally precedes demand.
Diamond miners produced more diamonds in the last twenty years than in all of history.
At current mining rates, it is possible that we will run out of accessible diamonds within fifty years.
There is large surplus supply of diamonds because of many years of excessive production of polished diamonds. Thus, future supply shortfalls will be specific to a particular type, size and quality of diamond.
New projects in Canada and Russia are positive for the world's supply of gem quality diamonds over the next five to twenty years.
Silver mining
production appears to
be reaching its peak.
There may be 18 billion
ounces of extractable
silver left according
to the according to
the U.S. Geological
Survey. If this is
indeed the case, there
won’t be enough
supply left due to the
steady increase in demand. Just last year,
the demand for silver rose to a record
1,081 million ounces according to The
Silver Institute’s World Silver Survey
2014.
Discover why gold & silver will never be worthless like other investments. Learn why gold & silver is a financial safe-house for investors. Uncover how metals can diversify your portfolio in times of inflation & market stress. Learn why gold & silver is undervalued and how to take advantage of it. Features: supply & demand charts, precious metals trends, long & short term price projections and more!
Silver Recycling Volumes Forecast to Stagnate Over The Next Three Years — Eve...Chris Helweg
Silver Recycling Volumes Forecast to Stagnate Over The Next Three Years Even If Prices Rally Significantly.
Silver recycling is projected to decline to 178.0 Moz (5,536t) by 2017. This is 14% lower than the 2011 peak, as growth is only expected to average 3% a year, even if prices rally to over $20.
Gold is Every Once Dream , make your Golden Dreams Come True with GRM GOLD INDIA LIMITED. Just Pay Rs.260/- pm and Lock your Gold rate.Pure Certified 999.9 Gold & Silver Coins , Flexible easy Installments , Agreement Transfer Facility , Any Time Exit ,Agreement Buy Back with 12% p.a., Free Accidental Insurance up to 10 Lakhs.ESC facility.Track your account online. Life Time career plan to earn monthly 1 lakh and above. www.grmgoldindia.com . Email: grmgold@gmail.com . Mobile No : 09346827933 / 08867584041 / 09177443123
Key Views
What will diamond supply look like ten years from now?
Mother Earth decides what types of diamonds are going to be available for consumption. Thus, supply of diamonds generally precedes demand.
Diamond miners produced more diamonds in the last twenty years than in all of history.
At current mining rates, it is possible that we will run out of accessible diamonds within fifty years.
There is large surplus supply of diamonds because of many years of excessive production of polished diamonds. Thus, future supply shortfalls will be specific to a particular type, size and quality of diamond.
New projects in Canada and Russia are positive for the world's supply of gem quality diamonds over the next five to twenty years.
Silver mining
production appears to
be reaching its peak.
There may be 18 billion
ounces of extractable
silver left according
to the according to
the U.S. Geological
Survey. If this is
indeed the case, there
won’t be enough
supply left due to the
steady increase in demand. Just last year,
the demand for silver rose to a record
1,081 million ounces according to The
Silver Institute’s World Silver Survey
2014.
Objective Capital Precious Metals, Diamonds and Gemstones Investment Summit
A Fund Manager's View of Precious Metals
20 May 2010
by Ned Naylor-Leyland - Cheviot Asset Management
Objective Capital Precious Metals, Diamonds and Gemstones Investment Summit
A Fund Manager's View of Precious Metals
20 May 2010
by Ned Naylor-Leyland - Cheviot Asset Management
Tap into the biggest transfer of wealth the planet has ever seen. This is a once in a lifetime chance to prosper, as in the longrun paper money has always returned to its intrinsic value zero. Find out why it is imperative to shift assets into physical gold and silver and how to purchase it.
Burger King represents a unique opportunity to own equity of the second largest QSR branded franchise in the world's fastest going market India.
Learn how Burger King is ramping up to emerge as the fastest-growing food chain. given its fiery pace, global brand, and strong execution we believe that it presents an opportunity for multi-bagger value creation.
In this webinar, we explore how any business should be analyzed to evaluate its true value. And this is the exact process taught in the Mastercourse in Equity Research and Valuation https://wa.me/message/6ALEXA634QLGK1
For the webinar replay https://youtu.be/_WX7t5fRdrM
The Mastercourse is conducted bu Vinit Bolinjkar who has 29 years of experience investing and trading
This presentation was done by Yash Bhansali & Varun Bisen both students of the School of Market Studies' Mastercourse in Equity Research & Valuation. It is a realtime demonstration of the skills that you will acquire once you finish the course.
The Mastercourse in Equity Research & Valuation has enabled both Yash and Varun to prepare and present a financial model on Varun Beverages Ltd with forecasting and calculation of intrinsic value using DCF Valuation methodology absolutely independently.
Normally a research analyst takes two years to "officially" be termed as a sector specialist. However, under the able guidance of Vinit Bolinjkar who has 28 years of market experience your process of learning the ropes of equity research, financial modeling, and forecasting goes much faster.
In fact, he virtually guarantees that after 4 months of the internship (following the two months of online learning) you will be able t easily forecast 80% of the market and be as good as any analyst on Dalal Street with two years of work experience.
This presentation was done by Stuti Dang & Kirti Gumber both students of the School of Market Studies' Mastercourse in Equity Research & Valuation.
The Mastercourse in Equity Research & Valuation has enabled both Stuti and Kirti to prepare and present a financial model on Voltas Ltd with forecasting and calculation of intrinsic value using DCF Valuation methodology absolutely independently.
Normally a research analyst takes two years to "officially" be termed as a sector specialist. However, under the able guidance of Vinit Bolinjkar who has 28 years of market experience your process of learning the ropes of equity research, financial modeling, and forecasting goes much faster.
In fact, he virtually guarantees that after 4 months of the internship (following the two months of online learning) you will be able t easily forecast 80% of the market and be as good as any analyst on Dalal Street with two years of work experience.
So what are you waiting for? JOIN NOW https://wa.me/919730836363
This is the outcome of what a student learns in the Mastercourse in Equity Research & Valuation that is organized by the School of Market Studies.
After two months of intense training, we have a 4-month internship. During the first month of internship Varsha Bezzam, a student made this absolutely detailed presentation on HUL.
This include
leadership analysis,
industry study
MOATS for HUL
Business outlook & strategy
Financial modeling
Equity Valuation using price earning method and DCF valuation
Peer comparison
Get LinkedIn₹ : LinkedIn Mastery for Job Search, Lead Gen & Sales, and Personal Branding online course is set to be launched on June 8.
Helping you master LinkedIn for your job search, personal branding & zero cost leads 4 B2B sales
Get Linkedin Podcast: Srinivasan Iyengar, COO Nippon Life on using LinkedIn for Job Search, Sales & Personal Branding https://bit.ly/3cn1e2a
#CoronaVirus update:
#AskVinit
The only solution for preventing its spread is ISOLATION.
Work from home should be encouraged.
All public places of congregation for social & cultural activities must be stopped
Infected areas must be locked down
Government & corporate leaders should act decisively to promote best practices for the same
For every death, there are potential 800 people infected.
The fatality is higher than that of H1N1, SARS & MERS
We should adopt the Taiwan model which despite being so close to China is not impacted.
The concept of economic moats was first made popular by Warren Buffett. In actuality, a moat is a water body around a wonderful castle that helps prevent being raided by enemies. The attractiveness of the castle would have lured enemies to attack. In a similar way, the superior returns of a business venture would invariably attract competition.
To protect your business you would have to build significant competitive advantages that would help secure it.
Branding
Superior product offering
Great distribution
Size of operation
Scalability
Management quality
Technology adoption
IPR / patents / copyrights
are some of the factors which help to build a moat. And several of these together help to broaden and deepen the moat.
Businesses without moats are waiting to get raided. And we must watch the economic moats with a hawks eye to ensure that they are not being eroded. Especially in today’s times, when disruptive forces erode competitive advantages, we must ensure that it is enduring.
However, it is not easy to understand whether the moat is eroding or not. Cause the effect of no moat or an eroding moat will show up much later in the deteriorating financial performance of the business. Hence the time to engage in a “moat checkup and review” is when the business is at its peak.
Quick & easy system for finding stocks with multibagger potential
If you were asked to find a multibagger from the listed universe of stocks you would obviously get bogged down. The sheer effort of having to go through each of the 5000 stocks and deciding on its multibagger potential would be, to put it mildly, overwhelming! And I guarantee that you would reach nowhere!
Yet there has to be a better way of doing this. So why not invert the whole process and de-select stocks that that do meet the requirements of being investment grade. What you are left with is purely stocks that you would invest in. Next, we apply the proprietary tools to understand whether a stock can be a multibagger. At India Investors Club we refer to this process as the Criteria of Elimination in Stock Picking
Please find attached, the Initiating Coverage Report on OCL India Ltd.
OCL India Ltd (OCL) is well poised to benefit from the focused emphasis of the newly elected government on infrastructural development in East India. In line with this emphasis, OCLs timing of hiking cement grinding capacity to 6.7 MTPA in March 2014 could not have been better. With the expanded capacity, we expect OCL to report healthy revenue 2 year CAGR of 26% to Rs.3067 crore and PAT growth of 65% to Rs.292 crore by FY16E.
We initiate coverage on OCL as a BUY with a Price Objective of Rs.536 representing a potential upside of ~91% over a period of 18 months. At the CMP of Rs.280, the stock is trading at an EV/EBITDA multiple of 2.7x FY16E and at an EV/Tonne of cement sold in FY16 of $60 ($42 EV/Tonne of capacity). The replacement cost currently is in the range of US$120-140 per tonne.
At the CMP of Rs 33, the stock is trading at an Adj P/BV of 1.3x and 1.1x for FY15E and FY16E, respectively. With the new government stepping-up reforms and making efforts to remove the bottlenecks in the economy, we expect the economic growth to pick up going forward. Consequently, we expect the strong growth momentum seen in SIB over past few years to continue. We expect advances and deposits to grow at a CAGR of ~19% each over the forecasted period of FY14-16E.
With business further expected to grow at CAGR of 19.5% over FY14-16E; NIMs remaining stable at ~3.0% and cost-to-income ratio improving to ~45% (currently ~50%), we expect a robust PAT growth of 22.6% CAGR over FY14-16E to Rs 763 crore.
Asset quality of SIB has improved in FY14 with GNPA and Net NPA standing at 1.2% and 0.8% in FY14 against 1.4% and 0.8% in FY13, respectively (which compares favourably with peers).
On the capital adequacy front, SIB is comfortably placed to support the future business needs of the bank over the period FY14-16E. The management has stated that it does not require any Tier-I capital funding during the current year. However, it plans to raise Tier-II capital of Rs 200 crore in FY15 to fund future growth.
In comparison to the less than ordinary and unimaginative budgetary proposals of yester years, Modi’s maiden budget comes as a welcome change from the norm. The proposals and reforms suggested in the Union Budget 2014-15 are ground breaking, specific with a good measure of thought & common sense and vastly catered for holistic growth of the economy.
The challenging circumstances of a slowing economy, soaring energy prices, inflation, fiscal and current account deficits do not provide adequate leeway to maneuver and hit the path of high growth. Yet the Budget provides a comprehensive plan and directional footprint towards overcoming these hurdles to sustainable growth of 7-8% over the next few years along with providing macro economic stability, lowered inflation, realistic fiscal health targeting and a manageable current account deficit.
The Finance Minister while presenting the budget takes cognizance of the fact that decisive action to fuel growth without populism is the need of the hour. And that resources for developmental expenditure cannot be raised at the cost of burdening the future generations with the legacy of debt. He goes on to emphasize the need to mobilize resources through both tax and non-tax revenues to feed the aspirational developmental expenditure.
In order to achieve this objective the Modi Government has taken head on the various issues plaguing the Indian economy and come out with imaginative and yet very practical and implementable reforms and measures.
Most commodities futures have been in a narrow trading range for quite a while now. However with volatility returning many have started to show signs of movement In this blog post we look at the commodities which hold promise. Corn, copper and soyabean are clear shorts while silver is on the verge of a break down. Gold though in a sideways consolidation could be a short term sell. Meanwhile crude oil and natural gas are hitting strong overhead resistances and could over the next few days put in some pullback. Platinum is still undecisive, sugar is a stock to watch for a buying opportunity and palladium is one lone metal which seems headed higher.
The Indian Pharmaceutical sector has been on a roll ever since the global economy picked itself up post the 2007 mayhem. Given the strong fundamentals of the Indian Pharmaceutical industry and the global opportunity due to the patent cliff in the western world, listed pharmaceutical stocks have responded well and rallied substantially. While the international opportunities have been good for the bottom line, pharmaceutical stocks with a larger or significant share of the domestic pharma market have come in for a rude shock as the implementation of the new pricing policy outline of the NPPA can sharply erode profitability. As the policy elements are still not clear, it would be premature to judge how individual companies would be affected.
With a view to having a mid journey outlook on expected price performance of pharmaceutical stocks, we decided to conduct a study of the major pharmaceutical stocks using technical analysis and analyse which stocks offer the best opportunity both from a long and short point of view. The exhaustive analysis was done on 29 of the major stocks, the details of which one can obtained from the slideshow.
The analysis was done using weekly chart data to get a more longer term picture and some of the results we found were quite contrary to general market expectation; yet others were quite revealing of exciting investment opportunities. We could have easily summed up our analysis and provided an instant listing of our analysis and recommendations for the benefit of our blog readers, but we thought it more appropriate that the reader “visualize” our analysis as “one picture is worth more than a thousand words.”
Technical analysis is a great science for stock price forecasting, but the overall investment decision can be more solid if backed by hard core fundamental study. In part 2 of the Indian Pharmaceutical Outlook, we would be providing extremely high quality fundamental evaluation on the fortunes of these very 29 stocks so that our faithful blog readers can make investment decisions based on comprehensive analysis.
As with all the content on this blog, the report will be provided FREE. However in order to make a point of the exclusivity of the content, we request blog readers to send us an email so that we could deliver it directly in your email inbox. This we request so that we could obtain your feedback on the same report so that we can improve on the content. We would also like to solicit your opinion on the type of content that readers find interesting so that future blog posts could be based more on reader interest rather than just what we think you should read.
We initiate coverage on Petronet LNG Limited(Petronet) as a BUY with a Price Objective of Rs 151 (target PE of 11x
FY2013) over a period of 15-18 months. At CMP of Rs 132.1, the stock is trading at 13.6x and 9.6x its estimated earnings
for FY2012E & FY2013E representing a potential upside of ~13.6%. Petronet LNG is majorly engaged in the business of
LNG procurement, transportation and regasification. Burgeoning natural gas demand supply mismatch in the country
makes it inevitable that the additional demand would be met by imported LNG. Petronet LNG, with its Kochi terminal set
to commission in Q4FY12 and expansion at its Dahej terminal, is all set to benefit from the current scenario. In addition,
diversification plans into the power segment add further value to the company. We expect revenue & earnings growth of
26.1% & 36.5% CAGR respectively over the next three years.
Favourable natural gas demand and supply to augur well for PLNG
On the back of growing consumption, demand for natural gas is expected to
grow at a faster rate of 16.3% (5 year CAGR) to 381 mmscmd compared to
supply which is expected to grow at a 5 year CAGR of 6.8% to 202.9 mmscmd.
This burgeoning demand supply gap is expected to be met through LNG
imports and Petronet LNG with its expanded capacity is well placed to garner a
major portion of this incremental demand. We expect the revenues of Petronet
LNG to grow at a CAGR of 26.1% to Rs 21343.7 crore over the forecast
period.
Kochi terminal & Dahej expansion to drive volume growth
The USD 850 mn Kochi LNG terminal of 2.5 MMTPA capacity is expected to
commission in Q4FY12 which would be later expanded to 5.0 MMTPA by the
end of FY13. Kochi terminal can help serve the Southern market where the
landed cost of domestic gas is higher. The Dahej expansion to 12.5 MMTPA is
expected to commence by FY13 with an additional jetty at Dahej at a cost of
~USD 980 million. Both these projects are to funded in a 70:30 Debt to Equity
ratio. We expect the LNG volumes to grow from the 7.6 MMTPA in FY10 to
10.4 MMTPA in FY13.
LNG pricing not a major concern
Although the LNG pricing is linked to JCC, over the forecast period we do not
expect significant cost increases as there is a fixed formula for pricing the
sourced LNG. Also, with the company having back to back off-take
agreements, we do not foresee any risk in passing on any of the increased
costs. While the recent nuclear
More from Vinit Bolinjkar LION bolinjkar.vinit@gmail.com (20)
2. President Lyndon Johnson on Silver
Excerpts of his speech: 23rd July 1965
"Now, all of you know these changes are necessary for a very simple reason--silver
is a scarce material. Our uses of silver are growing as our population and our
economy grows.
The hard fact is that silver consumption is now more than double new silver
production each year. So, in the face of this worldwide shortage of silver, and our
rapidly growing need for coins, the only really prudent course was to reduce our
dependence upon silver for making our coins.
If we had not done so, we would have risked chronic coin shortages in the very
near future.”
3. Silver
Once in a CENTURY investment opportunity.
Asymmetrically skewed Risk to Rewards Ratio,
favoring value.
More of an industrial metal than being a Precious.
Modern Warfare - A Huge Guzzler Of Silver.
4. Silver- Shortest reserve life amongst all mineral resources.
Only 14 boz of silver reserves remain at the end of 2008, we are already
hitting “end silver’.
The underground reserves will not last for more than 10-12 years at the
present rate of mining and consumption.
Profile of the reserves base is only good for another 26-27 years.
World Metal (Under Ground Reserves)
in billion ounce2005 Production Reserves Reserve Base Reserve Life Reserve Base Life
Aluminium 0.03 Large Large >100 years >100 years
Iron 0.04 2.3 5.3 52.2 >100 years
Copper 482.3 13824.9 27328.4 28.70 56.70
Zinc 321.5 6430.2 13503.4 20 42
Lead 106.1 1961.2 4179.6 18.5 39.4
Nickel 45.0 1800.5 4179.6 40 92.9
Molybdenum 5.8 250.8 546.6 43.3 94.4
Tin 9.6 176.8 321.5 18.3 33.3
Silver 0.6 7.9 16.7 12.3 26.1
Platinum & Palladium 0.0 2.1 2.3 >100 years >100 years
Gold 0.1 1.2 2.6 15.1 32.6
*Silver Reserves in 2011 are ~4.9 bn ounce
5. Country wise break up of silver world reserves
&
Reserve Base along with market share
30% World Silver Reserves
25%
25%
21%
19% 19%
20%
% share
14% 14% 14%
15% 13%
10% 10%
9%
10% 7% 7% 6% 6%
6%
5%
0%
Poland Rest of Mexico Peru Australia China United Canada
World States
Reserves Reserve Base
7. World Silver holdings reduced to a mere 72 million ounces over the period.
India & China reportedly had largest silver holdings which started getting
depleted from 2001 with China selling in excess of 50 million ounces in 2001.
9. Above Ground Silver Reserve under severe strain
Mined for over 500 years, but lost its status of being a store of
monetary value subsequent to demonetization and now is
increasingly used as an industrial metal.
Has become an indispensable metal with its superior qualities
of electrical and thermal conductivity, superior strength,
malleability and ductility.
Over a period of 65 years, since 1942, the demand for silver
has been so strong that it has always out paced mining supply.
The exception being the mini recession of the early 80’s.
10. Silver Scarcity: A Growing Reality
Demand outstripping Supply: Deficit prevailing for 60+
years
Demand in the range of 750 - 900 moz and the deficit
supply of 150-200 moz has been financed by the sale of
national silver and above ground stocks.
As per US geologist only 9 billion ounces are remaining & At
the present mining rate (500- 600 mn ounces p.a.), these
reserves won’t last us for more than 12-13 years.
Silver market : Too small for today’s billion dollar
funds
Market inventories thins while investment demand
explodes
11. Usage to rise exponentially as world embraces
technology
Silver: Rediscovered as a monetary store of value
Till 2007 the silver investment demand was not more than 7%
of total demand.
Growth in the silver ETF and the coin demand issued by the
State mints increases demand to the range of 12-25%.
Currently, the ETFs are expected to add 150-180 moz
representing a growth of over 50% yoy.
Gold Silver Price Ratio : Upside down in consideration to
the future silver shortages
Historically, the silver gold ratio has been 1:15, due to the volume
of mining. Demonetization has moved the ratio in favor of gold
(price wise) to 1:73. In future the ratio will get more skewed in
favor of silver as more gold mined increases the above
ground reserves and silver being a wasting asset, becomes rarer.
Over the next 6 to 7 years volume wise this ratio can be expected to come
down to 1:2 and eventually equalize in 12 -13 years.
14. Cumulative Deficit
12000
10000
8000
moz
6000
4000
2000
0
43
48
53
58
63
68
73
78
83
88
93
98
03
08
E
E
13
18
19
19
19
19
19
19
19
19
19
19
19
19
20
20
20
20
years
Cumulative Deficit of 65 years at 8.18 boz has reduced the
over ground accumulated silver reserve (of over 5000 years)
by 36.8% to a mere 13.93 boz.
15.
16. We FORECAST that this DEFICIT IS ONLY GOING TO GET
ACUTE. Availability of silver from the above ground resources
of silver is facing competition from the investment demand for
bullion and coinage and diminishing silver scrap recycling.
Silver Deficit mainly funded by –
Government Sales
Scrap Sales
Almost 65% of silver produced is mined as a by product of
base metal mining like copper (28%), zinc and lead (30%).
Both Lead and Zinc reserves are in a terminal stage like silver
and their reserves are estimated to last not more than 20 – 22
years
17. Silver Demand
Grew at a robust clip of 6% CAGR from 370 moz in 1984 to
904 moz in 2000. Since 2000, the demand has been
stagnant in a range of 850-950 moz.
Since 1999, the photography segment (demand of 228 moz
or 26% of total demand) has fallen by almost half to 113
moz in 2008.
As digital photography becomes ubiquitous, we forecast
that the demand from this segment (which has been
subjected to a de-growth of 6.7% CAGR during the last
decade) is further expected to implode to 10 moz by 2013,
at a de-growth of 17% -19% CAGR.
23. We FORECAST that total silver demand will grow at a CAGR
of 5% till 2013.
The overall demand contraction is expected to be balanced
out by the growth in newer initiatives in the industrial
segments (which should reach 150 moz by 2013) and
surge in demand for coins (which is expected to grow from
65 moz in 2008 to 169 moz by 2013, CAGR of 16%).
24. Silver Usage
Moved from being an investment commodity to an industrial metal.
Traditionally silver usage was more than 54% in photography.
With the advent of digital technology, the usage has diminished
sharply & this demand is further expected to crash sharply as
traditional photography becomes obsolete.
Silver Dem and vs World GDP ex US
30% 7%
25%
6%
20%
15% 5%
10%
% growth
5% 4%
0% 3%
-5%
70
72
74
76
78
80
82
84
86
88
90
92
94
96
98
00
02
04
06
08
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
20
20
20
20
20
-10% 2%
-15%
1%
-20%
-25% 0%
years
World Silver Demand World GDP ex US
26. Supply
Silver limited; demand unlimited
Total Supply 2010
4%
6%
20%
70%
Mine Production Scrap Hedging Government Sales
27.
28. Primary Sources-
1. Pure Silver Mining
2. Copper Mining
3. Zinc-Lead Mining
4. Gold Mining
Pure silver mines contribute only 28% of the total supply
while the majority of the silver (59%) is mined as a by
product of polymetallic mining (lead, zinc and copper). 11%
comes from gold mines and the balance is from other
sources like producer hedging, etc.
Mining production : Grown from 542 moz in 1998 to 681 moz
in 2008 ,a CAGR of 2.3%.
31. Silver scrap recycling has shown flat to negative growth since 1998. D
Digital photography is killing photo films. The recycling from
photography has been averaging 80 moz (or 50%) of total scrap supply
of 184 moz over the last 10 years.
We FORECAST that post
2013, the total old silver
scrap sales will fall to 100
moz of his source, with
incremental availability
ranging from 10 – 30 moz at
the outside.
32. Above Ground sources – Providing
Sanity to the unbalances
Over ground silver reserves of 14 boz is a source of
potential supply. But, only 11 boz (comprising of silver
jewelry, silver ware, sculpted silver and artwork) can be
counted upon.
Of this 11 billion, we ESTIMATE that 45% (4.95 boz) is
owned by Indians. We do not expect more than 10 moz
sales per annum from India (which represents 15% of total
India holdings and that too over a period of 10 years).
We ESTIMATE that balance 55% (6.05 boz) of overhead
reserves has a run rate of approximately 120 moz p.a.
considering current pricing of silver.
We estimate that this could go up by another 40% if prices
were to appreciate considerably. Since silver scrap already
constitutes 100 -110 moz from this source, the
incremental availability varies between 15-65 moz
and depends very highly on the market price of
silver.
33.
34. Summing up we forecast that cumulatively the over ground
reserves of silver can add only between 25 - 65 moz per
annum incrementally.
The seemingly endless supply of 14 boz is but a giant
mirage in the desert.
36. Factors affecting Supply
Top 20 Silver Producing Countries in 2010
(millions of ounces) 1. Geographic Spread
1 Mexico 128.6 18%
2 Peru 116.1 16%
3 China 99.2 14% Political stability and
4 Australia 59.9 8% government interventions
5 Chile 41 6% remain the key concerns.
6 Bolivia 41 6%
7 United States 38.6 5%
8 Poland 37.7 5% World government stocks
9 Russia 36.8 5% are almost depleted. The US
10 Argentina 20.6 3% government reserves are
11 Canada 18 3% near zero.
12 Kazakhstan 17.6 2%
13 Turkey 12.3 2%
14 Morocco 9.7 1% Silver is a vital constituent
15 India 9.7 1% of modern warfare and
16 Sweden 9.2 1% industrialization, which
17 Indonesia 6.9 1% would force countries to buy
18 Guatemala 6.3 1% in bulk leading to skewed
19 Iran 3.4 0% demand and higher prices.
20 South Africa 2.8 0%
Total 715.4 100%
37. World's Leading Primary Silver Mines in 2010
(millions of ounces)
Rank Mine/Country Operating Company Prod.
1 Cannington, Australia BHP Billiton 38.6 22%
2 Fresnillo, Mexico Fresnillo plc. 35.91 21%
3 Gümüsköy, Turkey Eti Gümüş A.Ş. 11.46 7%
4 Dukat, Russia JSC Polymetal 11.1 6%
5 Pallancata, Peru Hochschild Mining / International Minerals 10.14 6%
6 Uchucchacua, Peru Compañia de Minas Buenaventura 9.27 5%
7 Arcata, Peru Hochschild Mining 8.1 5%
8 Greens Creek, U.S. Hecla Mining 7.21 4%
9 Imiter, Morocco Société Métallurgique d'Imiter 7.2 4%
10 San Bartolomé, Bolivia Coeur d'Alene Mines 6.71 4%
11 Alamo Dorado, Mexico Pan American Silver Corp. 6.68 4%
12 Pirquitas, Argentina Silver Standard 6.3 4%
13 Palmarejo, Mexico Coeur d'Alene Mines 5.89 3%
14 San José, Argentina Hochschild Mining / Minera Andes 5.32 3%
15 Ying, China Silvercorp Metals 4.32 2%
Total 174.21 100%
38. 2. Stagnant Prices
Prices of Silver kept lower by way of Government
pumping silver coins in the market.
40
35
30
25
20
15
10
5
0
1945
1951
1957
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
1942
1948
1954
1960
Average Silver Price World Silver Price
39. 3. Mining Issues
Mining: Subject to under investment for over 20
years.
M&A curtailed the money available for new exploration
effecting the availability of “specialized” manpower and
modern machinery for cost efficient mining.
Economies of scale may not work in favor of Silver
miners, till the prices rise, as the volume of silver being
mined and sold is reasonably less as compared to other
base metals.
60-70% of Silver comes from Base metal mines
A threat of Silver hoarding by miners to artificially increase the
prices.
With rising power costs, labor issues and lower ore grades the
mining business is only going to get difficult going ahead.
Further large minors have been indulging in
“forward sales” and arranging finances against
the same. This could lead to further shrinkage of
supply in an already deficit scenario.
40. 4. Inventory Levels
• Silver ETFs, a double
edged sword.
Silver Stock held with Comex and CBT
160 40
140 35
120 30
• Plummeting Scrap
sales create supply
million oZ
100 25
shortage.
$/oz
80 20
60 15
40 10
20 5
0 0
Stock held with comex and CBT Silver price
41. 5. Silverware
A potential but secondary source of supply.
Cumulative demand for silverware since 1998 is
around 900 Moz.
42. Silver Valuation
History
Silver always valued in relation to gold.
Volume ratio of 15:1.
43. Demonetization of silver in 1873 led to its value loose favor.
During 1900 - 1942, silver prices remained abysmally low, not only in
absolute terms, but also relative to gold.
Gold silver price ratio kept climbing before it peaked at close to 100.
During this period the ratio ranged between 20-100 with an average
value of 50.3.
Total Supply 2010
4%
6%
20%
70%
Mine Production Scrap Hedging Government Sales
44. Post World War II Reconstruction increased
its demand.
Silver scaled to an all time peak of $ 50 and
gold silver price ratio touched its historical
value of 20.
45. Current Scenario
Since 1980, silver prices went bearish.
Gold silver price ratio remained in 31-97 range.
Of the 14 boz (22.11 boz estimated in 1942) silver, only
about 25 – 65 moz is available (incremental year on
year) at the current suppressed prices.
Discouraged investor demand and Encouraged industrial
depletion.
46. Valuing future silver
Current mining production (625-675 moz) cannot satisfy
demand.
Silver mining reserves are only good for another 10 -12
years.
Valuing silver by the centuries old yardstick of gold silver
price ratio, we believe the theoretical fair value of this
ratio should be inverse the gold silver volume ratio
available over ground.
Assuming a linear rate of decay, the gold silver price ratio
of the above ground reserves shows that the ratio
reaches equality at 2025.
Further the increased investment demand is a source of
negative demand.
47.
48. True curve will change due to -
Supply constraints from mining (as the
production profile follows the production tails
of the Gaussian distribution) lowering the
availability of above ground reserves.
The existing above ground reserves are
fractional and an erratic source, hence the
“adjusted” curve shows lower apparent silver
reserves. Further we believe that
conservatively more than 40% of these
reserves will not be available for
consumption.
49. Key drivers for re rating of the price of Silver
Entry of momentum players.
Silver users adjust their low inventory base.
Only 15 days of supplies
We ESTIMATE that the current fabrication inventories run at 17
moz. Cumulatively the industry will have to purchase between
112.5 to 225 moz as they adjust their inventory levels from the
present 15 days to 90 -120 days (varying between 12.5% to 25%
of total annual industry demand).
New demand initiatives to spur industrial demand for
silver.
50.
51. Silver de hedging will accelerate and mining
slow downs will be the order of the day.
Silver investment as an Inflation hedge and safe
haven from the specter of the falling dollar and
economic doom has already started.
World wide rebuilding of silver stock piles of
central banks, governments building up
strategic reserves, hoarding by speculators and
private individuals also to keep prices high.
The second leg of the commodity bull market
has begun.
52. Commodity Bull markets of the past two
centuries have rallied on an average 15-40
years. The present bull market started in 2002
and hence has a long way to go. In our
opinion this commodity Bull Run has
legs to run beyond 40 years.
The increasing global population, development
of the BRIC nations and other Asian countries
and the peaking of global production in most of
the commodities will ensure that the price rise
will be astronomical and will sustain for long.