“There’s a rush into gold because of the de-dollarization of the world. It has nothing to do with the interest rates,” asserts Keith Neumeyer, CEO of silver powerhouse First Majestic. In a conversation with Daniela Cambone at this year’s 2024 PDAC Conference, Neumeyer confidently reiterates his vision of silver surpassing $100 per ounce. With 1.2 billion ounces in demand and only 820 million ounces in production, there’s a notable disparity, Neumeyer emphasizes, highlighting the looming silver deficit, set to escalate in 2024.

CHAPTERS:

0:00 Gold price/Fed moves
1:39 Market’s reaction to the Fed
2:29 Silver price manipulation
4:07 Why silver?
5:23 Silver consumption
6:09 Apple’s EV project
6:57 Silver as a critical mineral
8:21 Silver price
9:49 Bitcoin
11:37 First Majestic
12:59 PDAC

TRANSCRIPT FROM VIDEO:

00:08

Hi, this is Daniela Cambone on the road for the Daniela Cambone show here at ITM Trading. We are in Toronto at probably the biggest event from the PDAC, the world’s largest mining conference. We’re at the aquarium for the silver and gold reception with one of the sponsors of the evening, Keith Neumeyer, CEO of First Majestic Silver. Keith, so good to see you. It’s kind of like our…

00:37

yearly reunion here. Yeah, it’s been a while since you and I have been together. Has been a while, but what a day to be talking the metals here. I mean, silver ripping, gold ripping, Bitcoin, we know what that’s doing. But first, just wanna get your comments on thoughts on this renewed energy that’s almost entered the space here. What do you make of the price action here? Well, of course I love to see it. Do I understand it?

01:06

you know, that’s a different topic altogether. You know, everyone’s banking on Powell lowering rates, or at least that’s what the scuttlebutt I’ve seen is. So, you know, I guess if rates are getting lower, gold will go higher, but I don’t even believe in that trade anyway. So, you know, gold is going higher as far as I’m concerned because governments are buying it. There’s a rush into gold because of the de-dollarization of the world. And it’s got nothing to do with interest rates or…

01:35

anything like that. I mean, it is an interesting timing. And I mean, maybe the market finally is not believing the word of the Fed anymore. I mean, we kept hearing for so long about soft landing, about, oh, how inflation is getting better, about, you know, rate cuts and whatnot. So maybe the market’s saying, you know what, I’m done with the Fed. That would be nice. Wishful thinking.

02:02

Now, I was listening to someone earlier talking about the Fed as well that, you know, the Fed has been involved in manipulating silver prices down and he is convinced that the Fed is involved in, you know, price fixing in the silver market. And he went a little bit, you know, to an extreme, I thought. But there’s a lot of people out there that believe the governments are involved in the trading of these metals and are suppressing prices. Well, look.

02:28

You’ve been a champion of silver for so long. I mean, I’ve always said it. You’re really one of the most popular faces, obviously, in the silver market. And you’ve pounded the table on so many issues when it comes to silver. You’ve been a defender of the industry. I mean, what are your thoughts when you hear about silver and price manipulation? I know your thoughts in the past, but has it changed? I mean, could there be truth there? You know, it’s always such a hard thing to talk about because you don’t want to…

02:57

you know, a conspiracy theorist, at least I don’t like to be that. Markets trade where the money is, in my view. So you could call it manipulation if you wish, but I think it’s just, you know, managing books, managing the financial system and whatever, why they do it that way or what’s behind it, you know, try to dissuade investors from buying precious metals. You know.

03:26

You know, back in the 70s when the famous letter was written about the COMEX of finally getting gold contracts in place, you know, the government wanted those contracts in place to scare away investors because they knew that once there was a paper market, they could then get involved in that paper market and manipulate the price like they did on Bitcoin. And that’s why, you know, you can argue all you want. But

03:55

You know, Bitcoin had no paper instrument really until recent times. So it’s been it’s become way more volatile as a result of that. Let me ask you this. And I want to talk to you about silver as a critical metal. But but first for our audience, that most of them really do believe and gold, silver, Bitcoin, sound money. I mean, why have you always been drawn to silver? What is it about silver and gold?

04:25

that makes you feel, yeah, this is the solution for me. Well, gold and silver are completely different. Gold is money, the granddaddy of all money. And as we de-dollarize around the world, which is obviously happening, gold is your hedge against de-dollarization. Silver is a strategic metal. You know, I came up with that phrase over a decade ago. I’ve seen other people also repeat that phrase.

04:53

But I came from a copper company. And so when I left that copper company in 2000, and I was looking around at what I should do next, and gold was obvious, right? But for me, there was just too many gold companies. I looked at silver, and I looked at the supply and demand fundamentals of silver, and I was amazed. And I said, this is like copper. And then I decided to put together a silver company. On that.

05:21

point, the Silver Institute estimates 1.2 billion of consumption of silver in 2023. 1.2 billion. Where’s the consumption? Well, the production is 800, 820,000 ounces of year, or pardon me, 820 million ounces a year of production and consumption is 1.2 billion in 2023. The estimate for 2024 is 1.4 billion ounces of consumption.

05:49

So you’ve got two industries, the electric car industry and the solar panel industry, who’s now consuming 30% of that world supply. And those industries weren’t around 10 years ago. I was gonna ask you because you saw Apple pulling away from electric vehicles. I mean, does that at all impact the use of silver going forward? If others start… Well, so what? So hybrids, hydrogen cars.

06:19

Any kind of electronic device requires silver. And you go buy a new fancy car today, and you step into it, and basically you’re looking at a computer screen. You go back 10 or 20 years, and it was all buttons and switches, and quite a bit different. So even a fuel combustion car consumes way more silver today than it did 20 years ago, just because of electronics. So you get into the hybrid, you get into hydrogen cars.

06:47

which a lot of people believe that’s where we’re going to end up being or going to. These vehicles require silver the same as an electric car. I’ve said you are a champion for the industry. Now you’ve really been focused on lobbying for silver to be recognized as a critical mineral. Why is this vital? Well, it’s going to help with permitting, going to help with just financing. There’s not enough investment going into silver.

07:17

You know yourself. So you have a $1.2 billion or 1.2 billion ounces of consumption and 820 million ounces of production. That’s a serious problem. So we’re six years in to this deficit. The deficit in 2024 looks like it’s gonna be bigger than 2023 and why is that? Because miners aren’t producing enough silver for the needs of the human race.

07:45

So we’re adopting all these green technologies, all these new ways of doing things. You still want your cell phone, you still want computers, you still want fancy cars, and we want to electrify the planet in ways that are gonna be greener. And it’s interesting because a nuclear power plant consumes a ton of silver. So anything green, anything that is involved in electricity consumes silver.

08:13

And we’re just simply as a mining industry, not supplying enough. And that’s going to affect prices, of course. But well, you know, I started by talking about the price action and I think the number one question is, you know, can we finally believe this rally? Is this finally going to be the breakthrough that gold and especially silver investors have been waiting for? Keith. Only time will tell. I’ve been doing, I’ve been in the mining sector for 35 years. I’ve been talking silver for.

08:43

20 years, when I put First Majestic together, silver was $5. And I said at the time that I expected silver to go to its previous high of $50. It took 10 years to do it, it took longer than I thought, but it did get to $50. I didn’t expect that it was gonna go down to 12, after 50, that was crazy. And it’s now been, then it’s gone back and forth, back and forth, and it’s been stuck in this kind of 23 to 28 dollar range.

09:11

for the last, I guess, two years, which in itself does not make any sense. I’m a triple digit silver guy. We’re mining for every one ounce of gold, seven ounces of silver, and so you do the math. Today, gold broke through a new high, 21.14, it closed that today, which is fantastic. It’s dragging, well, it will drag all commodities with it. Its silver was up 75 cents today to 23.75, but you divide 21.

09:41

14 by seven, and that’s where silver should be trading at. You were one of, I think you were the first to really coin triple digit silver. So that’s still, you still, that’s still the vision. Absolutely. How do you not get caught up in the Bitcoin price action? We were having a good conversation offline, but can you just share like, how do you not get caught up in that fear of missing out? Like I got to be in Bitcoin. You know, I was hoping it was going to go down to 10,000 and that was kind of my number.

10:09

know it went up to you know whatever set almost 70,000. That would have been your entry point. Yeah yeah I was watching and watching and I even had a think a fellow that you interviewed I forget his name but he was predicting for ten thousand dollar Bitcoin. Gary Soloway. That’s right exactly and that was his magic number right. So I figured okay I’m going to listen to him. Wait wait wait wait wait when it gets to ten thousand I’ll buy some and I of course didn’t get down there got to fifteen or.

10:39

somewhere around there. And now it’s back up to close to 70,000. And you know, look, it’s, uh, you know, I don’t really understand it, quite frankly. You know, we, we now have our own mint and we’re producing silver. Uh, we’ve been selling silver to the Republic, physical silver, since 2008. And we had our booth today at the PDAC. We’ve got silver all over the booth and people are coming up and touching it, holding it. The demand is there. They’re amazed, but just holding a chunk of gold or a chunk of silver in.

11:08

It does something to the mental, it does it to your brain because the amount of energy that’s contained in that bar of gold or silver, it’s enormous. And to, but yet you can’t touch Bitcoin. It’s something you can’t explain, right? When you pick up silver or pick up gold, right? Yeah, it’s just your, it’s a human thing. You just go, whoa, and you just like, that’s really cool.

11:37

What do you want the folks at home to know about First Majestic and this year going forward? What are you focused on? Yeah, well very much. We’re still, we put some cost cutting initiatives in place in 2023, which were pretty critical because with the shutdown of Jarrett Canyon in early 2023, that was pretty disruptive for the business and we really had to kind of pull up our

12:07

situation back on track. And we left, I was very pleased with how we left the year. Our fourth quarter of 2023 was an extremely good quarter. Santalena produced a record amount of ounces. That mine alone produced 3 million silver equivalent ounces in that one quarter. So analyze that’s 12 million ounces. Where we’re projecting it will be around nine to 10 in 2024.

12:37

And we’ve got some challenges at Lincantata with the water issue there. But, you know, when you have a portfolio of properties, you never have, you know, 20 years into this, you never have all mines doing perfectly. There’s always a problem. And why it goes from one year to the next. And it’s just the way life is. Finally, Keith, like I said, we’re at the Ripley’s Aquarium in Toronto. I mean, this is arguably the event.

13:05

during the PDAC. Over 2,000 people expected tonight. I mean, do you think it feels a little different than past years? You feel like there’s renewed energy in the space, in the precious metal space? You know, I talked to a lot of people and we came back from a conference in Munich and then in Zurich, you know, back in November. And I really noticed the crowd was quite a lot larger than normal and the crowd is younger than normal.

13:34

and you had family money, and I think, I don’t know for certain, but I think there are people that have made money on Bitcoin, and then are looking to diversify their portfolios, and they’re coming to the mining sector because it’s cheap. You know, it’s dirt cheap. Like, we’ve not seen these types of valuations in the mining sector since, geez, probably 2000, 2001, you know, in that range. So it is getting looked at seriously.

14:02

And then coming, and then we just came back from the BMO conference last week. Very good, good vibe there. You know, people aren’t throwing a lot of money at the sector, but they’re definitely turning over, you know, rocks and looking to see, okay, what am I going to put on my list of stocks to buy? And then the conference today, I’m not sure if you had a chance to walk around. But it’s shocking how many people were there. I saw it. So, so.

14:28

So go silver and don’t tell Keith that silver is the poor man’s gold. No, no, no, it’s its own person. Own. It’s a, it’s a strategic metal and extremely important for what we do, uh, as a human race and, uh, you know, I love gold. Don’t get me wrong. I do. I am the chairman.

14:48

first mining gold so but silver is number one for you. Silver is definitely number one. Keith Neumeyer, champion for the silver industry. Have fun tonight try and try and enjoy it a little bit. I hope you get a chance to walk around as well. Yeah well I hope I get to enjoy it a little bit but I enjoyed speaking with you and I hope you enjoy your coverage. We’ll have more incredible content coming your way so be sure to stay tuned to the Daniela Cambone show on the road here for ITM Trading at the Ripley Aquarium in Toronto. Stay tuned.

SOURCES:
https://www.google.com/finance/quote/BTC-USD?window=YTD

https://www.google.com/finance/quote/SIW00:COMEX?window=YTD

https://g.co/finance/GCW00:COMEX?window=YTD

https://www.silverinstitute.org/global-silver-demand-forecasted-to-rise-to-1-2-billion-ounces-in-2024/

https://www.theverge.com/2024/2/27/24084907/apple-electric-car-project-titan-shuts-down