Peter Smith
XAG prices are projected to rise significantly, with several new players, including Sun Silver and Andean Silver, recently listed on the ASX.
XAG Prices Expected to Continue Climbing
Interest in silver is heating up, with several new companies listing on the ASX in recent months. The precious metal, valued for its industrial, medical, and power generation uses, as well as its traditional role as a store of value, is becoming increasingly attractive. This surge in interest is leading miners in Western Australia to reevaluate their assets, with Horizon Minerals among those reassessing their holdings.
Horizon Minerals holds a silver deposit near Kalgoorlie, 600 km east of Perth, that has been idle but is set to be analyzed later this year. Non-executive chairman Ashok Parekh expressed excitement about the potential, noting the scarcity of silver mines in Australia. He also hinted at a possible silver "Super Pit" in WA's Goldfields, comparing it to the famous gold Super Pit in Kalgoorlie, which has produced over 21 million ounces of gold since 1989.
Australia holds the largest share of the world's economic silver resources, primarily located in Queensland, the Northern Territory, and South Australia. However, XAG remains a key component of the overall commodity mix across the country.
Silver Prices Could Reach $100 Per Ounce
Currently, XAG is priced just under $US30 an ounce, but analysts believe it could reach $US100 within the next few years. This optimistic forecast is encouraging news for companies like Andean Silver, which recently acquired a silver mine in Chile. CEO Tim Laneyrie expressed confidence in leveraging the favorable market conditions, noting that Silver has faced a structural deficit over the past three years. The high demand and limited supply could prompt other miners to consider shifting their focus to silver.
Laneyrie pointed out that transitioning to silver is a more natural move for gold miners than shifting to copper, making it an attractive option for investors.
Sun Silver, another ASX newcomer, was listed in May and has concentrated on developing a silver mine in Nevada, USA. Executive director Gerard O'Donovan highlighted silver's growth potential, particularly in producing solar panels, a sector experiencing exponential growth since 2014. He also echoed the sentiment that silver prices could reach triple digits soon, with major banks worldwide predicting such an outcome.
O'Donovan emphasized that Sun Silver’s Nevada project is located in one of the best mining jurisdictions globally, positioning the company well for future success.
Silver's Growing Appeal Among Investors
XAG has increasingly attracted the attention of analysts and investors alike. As a common polymetallic, silver is often found in deposits containing gold and copper, and it is frequently processed as a by-product. Canaccord's senior mining analyst, Tim Hoff, noted that silver is more accessible for everyday investors compared to gold, especially during periods of global and political uncertainty. He also pointed out that Chinese consumers have shown a strong affinity for silver, further boosting its demand.
The combination of these factors suggests that silver is set for a bright future, with new silver deposits likely to come online, providing investors with more opportunities to gain exposure to this valuable commodity.
Peter Smith
