- Silver prices rose by 29% YoY in 2020, led by an 8% increase in physical investment demand
- The World Silver Survey 2021 has forecast total silver demand to rise by 15% in 2021 to 1.03 billion ounces, with industrial silver consumption set to bounce back by 8% YoY
- The rosy demand outlook contrasts against silver’s tenuous supply profile, with annual mining production declining for a fourth consecutive year in 2020
- Excellon Resources is among the leaders in the search for new silver deposits, with a precious metals growth pipeline that includes: Platosa, Mexico’s highest-grade silver mine since production commenced in 2005; Kilgore, a high quality gold development project in Idaho with strong economics and significant growth and discovery potential; and an option on Silver City, a high-grade epithermal silver district in Saxony, Germany with 750 years of mining history and no modern exploration
Silver has long been recognized as the world’s best conductor of energy, and electric vehicles as well as solar power-led photovoltaics are set to serve as major demand drivers for the metal over the coming years (https://ibn.fm/nQVtP). Nonetheless, the onset of the pandemic and resulting slowdown in global economic conditions led industrial silver demand to fall by 5% in 2020 to a five-year low of 486.8 million ounces, a decline which was countermanded to a certain extent by a sharp increase in physical investment demand for the precious metal. In fact, investor demand for silver bars and coins rose by 8% last year to a four-year high of 200.5 million ounces. Resurgent industrial demand in 2021, coupled with ongoing physical investment demand, are set to bode positively for companies such as Excellon Resources (TSX: EXN) (NYSE American: EXN) (FSE: E4X2), a silver and base metals producer with precious metal projects in Mexico, Idaho and Germany.
The Silver Institute’s World Silver Survey 2021 revealed that silver prices had risen by 27% between 2019 and 2020, with the precious metal trading at an annual average of $20.55 an ounce over the past year. The price rally was largely fueled by a surge of net inflows into silver-backed exchange-traded products (“ETPs”), with investment vehicles seeing underlying holdings of the precious metal rise by 331.1 million ounces over the course of 2020 (https://ibn.fm/LvXzw), taking overall global holdings above one billion ounces for the first time since ETPs were first introduced in 2006. Remarkably, the rise in investment demand came amidst an 85% plunge in Indian silver investment demand, traditionally a mainstay of global investment demand for the precious metal.
The World Silver Survey has forecast a rise in total silver demand in 2021 of 15% to 1.03 billion ounces, with industrial demand set to rebound by 8% year-over-year. However, the rosy demand outlook contrasts against the commodity’s rapidly declining supply profile. In 2020, global mine production registered its fourth consecutive annual decline, with silver output declining by 5.9% to 784.4 million ounces.
The decline was primarily driven by a reduction in production from primary silver mines. These mines, which accounted for 27% of total silver production last year, saw output fall by 11.9% year-over-year to 209.4 million ounces. This decline was further exacerbated by temporary mine closures across a host of major silver producing countries in the first half of 2020 (https://ibn.fm/C7Bix).
An ongoing reduction in global mine output has lent more urgency to the search for fresh silver supplies. Excellon Resources has been a key driver of the movement, currently working towards developing a precious metals growth pipeline across a diverse range of geographies including Platosa, Mexico’s highest-grade silver mine since production commenced in 2005; Kilgore, a high-quality gold development project in Idaho boasting strong economics and significant growth and discovery potential; and an option on Silver City, a high-grade epithermal silver district in Saxony, Germany.
A dearth of new silver deposit discoveries, coupled with resurgent industrial and physical investment demand, may eventually lead to a production squeeze for the precious metal. Should that eventuality come to fruition, Excellon Resources looks well positioned to capitalize on it.
For more information, visit the company’s website at www.ExcellonResources.com.
NOTE TO INVESTORS: The latest news and updates relating to EXN are available in the company’s newsroom at https://ibn.fm/EXN
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