So here we are, another week down. With a closing price on Friday of $6.36. Just two and a half weeks ago, we saw our lowest share price since 2010. In those two and a half weeks we are up roughly 28% from $5.00 a share. That just goes to show how fast this thing can rise. If in the next 2-3 weeks, we see another 28% rise in share price, that would put us at $8.14/sh. I'm not saying that 28% in 2 weeks again is likely, but it can obviously happen.
At the same time, two and half weeks ago, spot silver was almost exactly where it closed on Friday. Right around $28.75/oz. So, finally we are seeing EXK detach from the price of silver. With that being said, it's anybody's guess how long that will continue. We could trend higher toward $7.00+ while silver hovers around $29/oz. I still believe that $30/oz is the key for a mining sector breakout. Once spot silver starts climbing past $30/oz and approaches $31/oz, EXK could very well be back above $8/sh.
EXK - Low of $5.00/sh
Spot Silver - $28.75/oz
EXK - Low of $6.33/sh
Spot Silver - $28.86/oz
EXK - Up roughly 28%
Spot Silver - Up 0.4%
You can always expect daily rises and pullbacks both in the silver mining sector and silver itself. But as you can see, we are trending higher and higher off of our 52-week low, every week. Barring any raids on spot silver, I would expect EXK to continue it's trend higher next week. If silver is still $29/oz (+/- .20 cents) I would expect EXK to close the week around $6.60-$6..65/sh. Maybe even higher.
Obviously, I am no fortune teller and do not have a crystal ball. All of the future price action quoted here is just my opinion. As I have said before, I believe the only thing holding us back now, is the fact that Q1 earnings might be affected by lower spot silver.
Good luck to all longs!
Sentiment: Strong Buy
Great post as always. I think that Q1 earnings will be good. Moving forward from there they should be great - the years ahead are more than promising. From a recent sale of inventory they have an extra 20 million towards expenses. That money, if spent, will return to EXK's balance sheet as deductible business expenses which are the costs associated with transportation, equipment maintenance, marketing and business administration, as well as some equipment purchases, operating losses and expenses related to employing other workers. So this will fair well per El Cubo, as most costs related are deductible for the first year on payments and costs of items mentioned above.
The use of silver in fabrication/industrial demand is on the rise. By 2015, estimates are 870 Moz. It may be more if corporations start to stockpile, which I think that they will, and this is one reason why we are having manipulation now. Industrial use counts for a bit more than 50% of total fabrication demand. Jewelry about 20%, coins about 13% and other uses about 16%. Some sources will state 13% for other uses, but that's not including big brother with secret uses. Chinese fabrication demand averages about 20% of output of supply.
Silver is also a currency, but I see industrial nations' supply and demand becoming more solid based and some pricing disconnect from currencies. So silver will stay stable and EXK will see gains/investment just from silver being stable. The US dollar is strong because other currencies aren't. The USA and other nations still have debt issues and that balance is macroeconomics like the World Cup or the Olympics. Silver is also a safe haven - fear/support currency metal like gold. The days of manipulation on miners will end when investors realize that silver will become price stable and it has different analytics than gold. Banks, the Fed, working for big business want us to believe that silver is exactly the same as gold, it's not.
Thanks for the reply newscentral. They are always welcome.
Looking at silver Jan-Mar of 2012 compared to 2013, we are lagging by about an average of $1/oz. So, you may be right as far as earnings. If they are pulling more silver/gold out of the ground this quarter vs. last year's Q1, we should be able to outdo Q1 2012 earnings last year with no problem. Pulling silver prices off of Kitco, so far this is a (very) ROUGH estimate of average spot silver/oz.
2012 Q1 (Jan-Mar) Spot Silver Avg. - $32.10
2013 Q1 (Jan-Mar) Spot Silver Avg. - $31.10
With that being said, according to their Q1 2012 earnings results, they reported an average silver sales of $33.10. Roughly $1 higher than what I got for the average spot silver price for the quarter. So I guess a lot of it will depend on when they sold their reserves.
Does anybody have an estimate on silver/gold production for Q1 2013?
Sentiment: Strong Buy
Mensch: Good post. I can't reply under your message, so I'll reply above it.
I have posted for years about investment demand, but when SLW hit 48 and silver hit 50, I saw retail hype. There will always be investment demand for silver. I talked a lot about China and their plans as well, and I don't disagree. Wall Street, banks and industry want investors just to believe that a silver investment is just for fear or to collect, so that they can manipulate - and so many investors will pass on silver and gold as they see that stocks are doing great - so why buy silver?
Because silver is also an industrial commodity, it is a candidate for an industrial shortage. The world’s industrial consumers hold little in the way of silver inventories, thanks to just-in-time inventory and production practices.
Given that we already have a widespread retail silver shortage, a wholesale shortage is likely as well. When industrial users face delays in silver shipments they will panic and attempt to build inventories all at once. This situation is unique to silver—it does not apply to gold. Some big industrials may start stockpiling silver, as food manufacturers do with grains.
Washington, D.C. United States March 16, 2013 - Office of the Interior - Yahoo
"Industrial demand for silver is expected to soar to a new record level in the coming year".
industrial demand for Ag is decreasing, Suntech one of the largest solar panel businesses in the world has declared bankruptcy, natural gas will destroy the solar panel business, it was extremely inefficient anyway, worldwide production of Ag for 2012 was 770M oz a new record, What will eventually get Ag to new highs is what has been previously discussed, investment demand will continue to soar & fiat money and the Chinese plans on removing the US as the world reserve currency , this will be the day of reckoning and what a day it will be. Ag & EXK will be fun to watch.