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February 10th, 2021 | 08:20 CET

Silver Viper Minerals, BYD, First Majestic Silver - Position in the silver boom!

  • Silver
Photo credits: Silver Viper Minerals

The famous gold-silver ratio has been used again and again lately. It is currently about 67; in weak silver phases, it goes up sometimes to just under 100. At about 50, one would be able to identify a historically fair valuation of silver. At the moment, this would be about a spot price of USD 37. Measured against the price targets, which were recently proclaimed by the Reddit community, we are still about 30% away here. But in terms of commodity movement overall, we indeed haven't reached the top yet. Silver is also highly relevant in the context of COVID-19: It has a strong antiseptic and disinfecting effect!

time to read: 4 minutes | Author: André Will-Laudien
ISIN: CA8283341029 , CNE100000296 , CA32076V1031

Table of contents:

    Silver Viper Minerals - Explorer follows the spot market

    Silver Viper Minerals' gold-silver project is located in northern Sonora, Mexico's leading gold-producing state. Formerly owned by Pan American Silver, it can now really come into its own under a new flag, as the silver price has smoothly doubled since the properties were acquired - so the potential in the ground is huge. The "La Virginia" project shows first-class historical exploration. Recently, further discoveries were made in the El Rubi zone.

    Silver is in such demand today because industrial processes require more and more silver. A certain amount is also disappearing from the market due to the constant electro-technical construction. The coin production has a similar effect, running at the highest level in recent years, e.g., in Mexico with the "Libertad" and the USA with the "Silver Eagle." Material silver is more in demand than ever because every shock in the financial system generates new investors who lose faith in the miraculous flood of paper money.

    As of January 2021, Silver Viper still had USD 3.2 million in cash on hand, leaving it well-positioned for further exploration and the USD 100,000 property loan payment due in June. The drill program's acceleration makes sense, as there is a lot of attention on the silver market right now. The social media community around Reddit wants to get at the short-sellers who have been acting for a long time - a price target of USD 1000 was simply put in the room. This figure is absurd compared to the current price of USD 27.5. But if silver explodes on the futures market for reasons of market imbalances, the small silver explorers with multiple leverages will go through the roof. With prices around CAD 0.48, Silver Viper is probably more of a bargain at the moment.

    BYD Ltd. - The fantasy remains

    "Build Your Dreams" continues to run like clockwork. BYD Company Ltd, or BYD for short, is a Chinese conglomerate and the world's largest producer of rechargeable batteries, primarily for cell phones. In the field of e-mobility, BYD has initiated strong expansion steps in recent years. When it comes to pure electric cars, Tesla is by far the world's most innovative automaker, but the competition is catching up.

    For the current edition of its ranking, the Center of Automotive Management (CAM) calculated the innovative strength of 32 automakers based on recent innovations in the field of electromobility. Accordingly, the calculations include innovations in range, consumption and charging performance - to improve customer benefits. For example, Tesla scored particularly well in terms of range and charging performance, while other manufacturers excelled to some extent in innovation.

    According to the CAM innovation ranking, Tesla was able to gain 45 index points compared to the previous year's list and comes to 159 index points in terms of e-car innovation strength. VW came in second - with an increase of 37 to 123 index points. VW benefited from the high segment ranges and charging performance of the VW ID 3. In addition, further innovations from Porsche (Taycan) and Audi (E-Tron) were positively included in the assessment, meaning that Germany is also already prominently represented. Chinese manufacturer BYD jumped to third place with 23 plus points (70 index points). According to CAM, the innovations in the BYD Han EV were responsible for this.

    BlackRock took advantage of the good sentiment in the market for e-mobility investments and recently increased its exposure to BYD from 4.57% to 5.05%. BYD was one of the best return performers in 2020 and the stock is already thick in the plus again in 2021.

    First Majestic Silver - In the swing of the speculators

    First Majestic Silver does not come to rest. First, Reddit speculators drove the share price up to over EUR 18, or around 50%. Hardly the share was then widely covered, and it went down again by 30% to currently about EUR 14. The silver price followed the movement in the spot price to a similar extent. From a high of USD 30, it fell back to USD 25 in one week.

    First Majestic had another excellent year in 2020 despite the numerous challenges caused by the COVID-19 pandemic and the two-month national lockdown in Mexico, overall exceeding its own expectation with 11.6 million ounces mined.

    At La Encantada, silver production reached a six-year high due to further improvements in recovery rates and underground production. San Dimas also had a strong 2020 year-end, producing 3.5 million silver equivalent ounces in the fourth quarter, the highest quarterly silver production since San Dimas has been owned by First Majestic.

    But where there is light, there is also shadow: Mexico's government plans to collect more than USD 500 million from the Canadian mining Company for keeping silver prices artificially low over the past decade. So far, Mexico's SAT tax agency has claimed 5.5 billion pesos (equivalent to USD 267.18 million) in tax debt, with the remaining half of the total still to be determined in formal disputes. Under President Andres Manuel Lopez Obrador, the authorities are taking a strict approach to publicly expose companies with large tax debts. Time for First Majestic to pay a portion of its cash flow to the Mexican government. So far, these discussions have done little harm to the share price.

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    Der Autor

    André Will-Laudien

    Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.

    About the author

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