Silver Breaks $50 Again, Is This The Top? CEO Called Rally, Has Shocking Update | Shawn Khunkhun

Here is a chronological list of distinct topics, claims, and statements from the transcript:

1. A silver price increase mirroring the 1960-1980 period would equate to an $800 silver price today.
2. The Reserve Bank of India (RBI) is considering integrating silver into its monetary system. This involves allowing investors to use silver as collateral at a 10:1 silver to gold ratio.
3. If the RBI's silver initiative proves successful, it implies a $400 silver price, based on the 10:1 silver to gold ratio.
4. There is a significant uptick in precious metals, with gold climbing nearly 3% intraday and silver surpassing $50 as of Monday, November 10th.
5. Dolly Varden Silver, led by CEO Sean Cuklo, has been active, and upcoming discussions will cover its recent drilling results and future plans, as well as the broader mining industry.
6. Silver broke above $40 in late September and continued its rally, now having surpassed $50.
7. Unlike previous instances in 1980 and 2011 when silver briefly touched $50 before crashing, this time it has consolidated around the $50 mark for approximately a month (all of October and into mid-November), showing a "stickier" behavior.
8. The current silver price move has been more gradual and sustainable compared to the dramatic, short-lived spikes in 1979-1980 and April 2011.
9. The nominal value of $50 today differs drastically from its value in 2011 or 1980, largely due to a 25% expansion of the money supply during the pandemic, requiring more dollars to acquire hard assets like silver.
10. In 1980, silver touched $50 for less than a day before falling to its prior base of around $5, where it remained for decades until breaking out in 2004.
11. In 2011, silver reached $50, hovered around $40 for a few weeks, then crashed to a $16 base, staying there for about 10 years until quantitative easing after the pandemic spurred a new rise.
12. If silver were to correct in the current bull run, its retracement base would likely be much higher than previous cycles, possibly around $30-$32 an ounce, suggesting a new "fair value" for silver.
13. In 1959, when one of Dolly Varden's mines operated, silver was 85 cents an ounce. A similar proportional move from a $16 base, as seen between 1960-1980, would imply an $800 silver price in the current bull market.
14. The mining industry finds it challenging to invest in exploration and development when silver prices are below $25. A price north of $25-$30 is generally needed to incentivize significant activity.
15. Keith Newmier, a prominent silver mining executive, noted that silver's rise from $25 to $50 has brought money into the space, doubling the venture exchange and facilitating exploration and acquisitions by larger entities.
16. The $25-$30 price range for silver is considered the "new $16" for incentivizing investment in the sector.
17. Current M&A activity is muted compared to 2011. This could be due to increased discipline among miners or a lack of belief in the current rally.
18. Gold M&A saw mega-mergers during the bear market (2012-2013 to a couple of years ago), such as Barrick-Randgold and Newmont-Goldcorp. Future gold M&A is expected to involve large companies divesting non-Tier 1 assets to smaller entities.
19. Silver M&A is distinct from gold due to silver's scarcity, its predominantly byproduct production, and a shrinking number of primary silver producers (from 13 to 10 companies, with some becoming gold-centric).
20. As gold becomes more expensive (approaching $4,000) and retail demand for silver increases, silver-centric opportunities are becoming more valuable, leading silver prices to outpace gold.
21. There is a significant retail frenzy for silver, evidenced by anecdotal reports of Costco running out of silver. Silver is not typically a mainstream asset featured daily on financial news.
22. The recent doubling of gold and silver prices in the last six months is attributed to a decrease in confidence in governments and currencies, prompting investors to seek protection in precious metals.
23. The RBI's 2009 gold purchase at $1,000 an ounce, made to diversify against a falling US dollar, proved to be a successful long-term investment, demonstrating the bank's accurate market outlook.
24. The RBI's recent decision to potentially bring silver into its monetary system at a 10:1 silver to gold ratio, if as successful as its past gold bet, suggests a $400 silver price.
25. Paper markets for silver trade 2 billion ounces daily, which is twice the annual mined and recycled supply of 1 billion ounces, at an 80:1 silver to gold ratio.
26. Historically, China had a "silver age" rather than a "gold age," contributing to significant demand for silver from Eastern countries like China, India, and Russia.
27. There is no substitute for silver, the most conductive metal on the planet, making its use in electrification and the military-industrial complex critical.
28. Silver's monetary use has decreased from 90% to 50% over the last 100 years, while growing industrial demand has led to a 200 million ounce annual deficit for the past five years.
29. The Trump administration considered designating silver as a critical mineral. If Section 232 tariffs were applied to silver, similar to threats for copper, silver prices could jump to $75 overnight.
30. An open letter sent to Canada's Minister of Energy and Natural Resources in January 2023 advocates for classifying silver as a critical mineral in Canada.
31. Silver meets critical mineral criteria by being essential to national security and economy, required for a sustainable low-carbon and digital economy, and contributing to Canada as a strategic source for allies. Additionally, its supply is threatened, and it has a reasonable likelihood of being produced in Canada.
32. The CEO signed the letter due to belief in silver's irreplaceable role in military, defense, electrification, photovoltaics, and as a monetary metal, and in support of First Majestic's advocacy.
33. Upon becoming CEO of Dolly Varden five years ago when silver was $16, the strategy was to build a business through acquisitions and science during a metals depression, anticipating higher silver prices (gold-to-silver ratio shift to 20:1 or 15:1). The goal was to create attractive assets for larger producers whose resources were depleting.
34. The $50 silver price was rewarding, but its real value is relative due to the 25% money supply increase during the pandemic. The CEO initially did not foresee the massive growth in industrial demand from photovoltaics and EV batteries, instead focusing on silver as a hedge against monetary devaluation.
35. The annual silver deficit of 200 million ounces is a critical issue, and the long lead times (10-15 years) for new mines could hinder clean energy transitions and AI development.
36. Dolly Varden's strategy to expedite metal extraction is to focus on Direct Shipping Ore (DSO) opportunities. This involves finding high-grade mines near underutilized production facilities to reduce capital expenditure and shorten permitting timelines.
37. The ratio of silver coming from primary mines (one in four ounces) versus byproduct operations (three in four ounces) has not changed. A significantly higher silver price would be needed to incentivize more primary silver mines and potentially alter this ratio.
38. Silver is mainly found in polymetallic deposits. A high enough silver price would make primary silver mining more lucrative than byproduct recovery from other metal operations.
39. While a "mine into extinction" scenario for silver was previously considered possible due to its critical attributes and lack of substitutes, it is now deemed unlikely within a lifetime, as the market typically finds ways to substitute or incentivize supply.
40. The $50 silver price environment, coupled with potential critical mineral designation and advantageous tax treatment in Canada, is now incentivizing exploration and development of primary silver mines.
41. Dolly Varden's operations are located in the Golden Triangle of northwest British Columbia, an area that has seen 150 million ounces of gold and 2 billion ounces of silver discovered over the last 30 years, hosting mines operated by major companies like Newmont.
42. Dolly Varden has assembled a 100,000-hectare land package with five past-producing high-grade silver mines. The company has invested $100 million in exploration using new technologies and science.
43. The company is on the cusp of a 100 million ounce silver resource and a 1 million ounce gold resource. Currently, it reports 64 million ounces of silver and 1 million ounces of gold, with a significant increase expected in the Q1 mineral resource estimate.
44. Dolly Varden has $64 million in its treasury (as of October 23rd, 2024), sufficient funds for the next two years. Its growth strategy relies on raising money, good science, and accretive acquisitions.
45. The company's five acquisitions have contributed to its growth from a $20 million valuation to $500 million.
46. Growth in reserves is attributed to discovery-oriented drilling, accretive acquisitions, and a $63 million capital raise this year.
47. Dolly Varden's acquisition strategy is guided by scientists and engineers, targeting contiguous ground where existing mineralization expands. It also assesses historical production and reserve numbers.
48. The company significantly expanded its land package six-fold (from 15,000 hectares) with only 2% dilution and increased its past-producing mines from two to five.
49. This growth was strategic, tied to a deliberate decision in January to list on the New York Stock Exchange (NYSE), which was completed on April 21st. The subsequent increase in share price in May enabled accretive, all-share acquisitions.
50. Dolly Varden aims for accretive M&A deals that add value. For instance, it acquired the Porter Idaho deposit (known as the Golden Triangle's richest primary silver mine) at $0.08 per ounce in the ground, which was more cost-effective than its estimated discovery cost of $0.15 per ounce.
51. The company prioritizes sustained, less dilutive growth, acquiring assets when prices are low and raising capital when valuations are fair, demonstrating a balanced approach.
52. A recent drill intersect yielded 26 grams of gold over 14 meters, equivalent to a 350 gram-meter interval. This new discovery is significantly higher than the 100 gram-meter benchmark for top companies.
53. The high-grade drill core, running over 433 grams per ton, is analogous to the nearby Ascot Premier mine, historically North America's most profitable gold mine. This indicates Dolly Varden operates in a rich, high-grade system in a safe Canadian jurisdiction.
54. The company's next objective is to pursue mergers with cash-flowing entities, even if it involves some dilution, to bring in immediate cash flow and accelerate development.
55. This strategy of seeking cash-flowing entities is part of Dolly Varden's long-term vision, formulated in 2019-2020. It became viable as the company grew and metal prices rerated.
56. The company seeks minimally dilutive options focused on investor ROI, aiming to capitalize on current $50 silver prices and potential future prices of $75 or $100.
57. Dolly Varden has progressed from obscurity five and a half years ago to being a "top 13 entity" in the silver space (comprising 10 primary producers and 3 advanced explorers).
58. The CEO's long-term goal is for Dolly Varden to become the number one silver equity, a goal that may take another five years and involves significant competition or a potential acquisition by the top company.
59. Next major milestones include reporting on 80 more drill holes and continuing to pursue strategic acquisitions. Acquisitions will only proceed if they are accretive and pass value to investors.
60. Dolly Varden is active on social media (LinkedIn, X) and its website (dollyvardens.com). The CEO plans to meet with investors in London and Switzerland between now and the end of the year.