17. November 2021 | 12:06 CET
Deutsche Telekom, Silver Viper, First Majestic Silver - Boost from Green Deal
The reins on achieving climate targets were tightened in the past two weeks at the COP26 World Climate Conference in Glasgow. For the first time, coal and other fossil fuels were declared phased out in a COP decision. As a result of the Green Deal with the conversion of the economy to renewable energy sources, demand for the industrial metal silver is expected to increase enormously in the coming years. Experts expect demand to grow by over 80% by 2030.
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ISIN: DEUTSCHE TELEKOM ADR 1 | US2515661054 , SILVER VIPER MINER. CORP. | CA8283341029 , FIRST MAJESTIC SILVER | CA32076V1031
"[...] In our experience, the local communities are supportive and friendly. [...]" Steve Cope, President, CEO and Director, Silver Viper
Silver Viper - Best conditions
Alongside copper, lithium, cobalt and nickel, precious metals play an essential role in climate change. While platinum metals play an important role in the development of catalytic converters for hydrogen cars, silver is particularly vital in the photovoltaic industry. Silver paste is used in 90% of all silicon photovoltaic cells, the most widely used solar cells. Sunlight hitting these silicon cells generates electrons collected by the silver conductor and bundled into electric current. According to a study by The Silver Institute, about 45,000t or 1.5 billion ounces of silver will be needed over the next twelve years to drive renewable energy, including 23,247t for solar cells alone.
Around 55% of silver demand comes from industry, with 45% needed for inflation protection and investment. However, this is offset by tight supply. Silver is still in correction mode, unlike copper and other industrial metals, which reached new highs in recent months. In view of further high inflation and low-interest rates, anti-cyclical entry is likely worthwhile, similar to gold. Especially silver producers or exploration companies offer attractive entry opportunities at the current level.
New impetus should soon be reported by the promising Company Silver Viper. The 6,880 hectare La Virginia gold-silver project, managed by the Belcarra Group and formerly owned by Pan American Silver, will be worked on in November with a TITAN-160 deep drill hole in cooperation with the specialist Quantec Geoscience directly above the El Rubi area. With the help of unique investigation methods such as DC-resistance measurement with induced polarization and the collection of magnetotelluric data, an investigation of the structures down to a depth of 1,500m can be achieved. Silver Viper CEO Steve Cope's management believes that the deeper mineralization is mainly in rhyolitic rocks.
Significant exploration progress has also been reported along the El Rubi structure and in the adjacent La Colmena and Paredones exploration zones. If the deep drilling continues to be successful, larger mining companies may begin to take notice. On a current basis, Silver Viper is valued at around CAD 45 million on the stock market.
First Majestic Silver - Blue Chip in the silver market
First Majestic Silver Corp. is a Canadian silver and gold mining company operating in Mexico and the United States. It has four producing mines under its control: San Dimas Silver/Gold Mine, Santa Elena Silver/Gold Mine, La Encantada Silver Mine and Jerritt Canyon Gold Mine. What is interesting about First Majestic is that weeks ago, CEO and silver bull Keith Neumeyer decided to withhold a portion of silver production of about 1.4 million ounces so as not to "dump" his product.
Investors were able to see the result of this decision in the third-quarter figures. Had the Company sold the retained inventory, it would have generated additional revenue of approximately CAD 33.2 million using the average achieved silver price of USD 23.10 per ounce for the quarter. It is now offset by a 1% decline in revenue to CAD 124.6 million. In addition, capital expenditures increased to CAD 14.09 per silver equivalent ounce due to the inclusion of the Jerrit Canyon gold project. In total, this resulted in a net loss of CAD 18.4 million for the quarter. Adjusted, this corresponds to CAD 0.07 per share. Nevertheless, there was a cash flow of CAD 0.09 per share. The Company also announced the payment of a quarterly dividend of CAD 0.0049 per share. This figure is expected to increase significantly again in the coming quarters.
Deutsche Telekom - Analysts advise to buy
Silver also plays an important role in the telecommunications sector due to its excellent conductivity. Here, the white precious metal is needed for the introduction of base stations, additional data storage and new 5G-capable devices. Telekom is already supplying numerous cities in Germany with fast 5G mobile communications. By the end of 2021, just under 90% of the German population should already receive 5G. In its third-quarter figures, the Bonn-based company reported a 1.8% increase in revenue to EUR 26.87 billion.
Deutsche Telekom also outperformed the majority of experts in terms of EBIT at EUR 9.66 billion. Following the quarterly figures, Deutsche Bank reiterated its buy recommendation with a target price of EUR 26. US investment bank Goldman Sachs also left the DAX heavyweight on its "Conviction List" with a price target of EUR 26.
Silver is becoming increasingly important due to the achievement of climate change. Demand for the precious metal is likely to increase significantly in the coming years due to its use in the photovoltaic industry. First Majestic Silver is one of the most important players here, and Silver Viper is an interesting second-tier company.