Summary
➡ The article discusses the potential economic issues the US could face due to its increasing debt and the decreasing interest of foreign countries in buying treasury bills. It also highlights the need for the US and Canada to increase their production and secure their supply of critical minerals like silver, which are essential for manufacturing. The article also mentions the possibility of the Federal Reserve cutting interest rates in response to global trends and the impact this could have on the metals market.
➡ The Canadian housing market, particularly in Vancouver, is slowing down significantly due to various factors such as increased capital gains tax and economic struggles. This has led to less investment and spending. In the US, there’s pressure on the Federal Reserve to ease economic tension, especially with the upcoming election. Meanwhile, Silver Viper, a mining company, is planning to resume drilling operations soon, with potential for significant silver and gold assets in Mexico.
➡ Our project, which is 60% gold and 40% silver, offers a good opportunity even if silver prices don’t rise, thanks to the profitable gold prices. We have a higher grade of minerals than other mines and also benefit from our silver. The project needs more exploration to determine its full potential. Despite a tough market, we’re prepared and excited for the next six months.
Transcript
And as well, we have fed meeting minutes coming out in just about an hour after you’re watching this, if you’re catching the live debut. So I’m joined here once again by my friend Steve Cope of silver viper minerals to go through a lot of the news that is affecting precious metals these days. So, Steve, welcome on in, good to see you as always. And how are you doing today? I’m doing all right, Chris. This is a rare where we’re before the Fed, normally we get the rip on foul post Fed meeting. So we’ll see, we’ll see what we can come up with today and see if it holds true.
Free speaks. Well, some interesting things happening, especially the PCE data, inflation data, which came out on Friday. And we will touch on that as well as some other thoughts on the Fed, which seems lately we’re swaying a little bit closer to the rate cuts, maybe coming soon. But before we dig into that and some of the economic news, Steve, we’re recording just after noon time here on Tuesday, and we see silver, $29.64 had broken through, $30 again, gold at 23.31. Been a little bit of a quiet past few weeks since we last spoke. But any quick thoughts on the gold and silver pricing? Again, I find it encouraging that going through that $30 level a couple of times now, haven’t seen the big move down to 28 or $27.
But anything on the gold and silver pricing or thoughts you’ve had there lately? Yeah, I mean, again, I’ve always reached the consolidation and sitting here and setting, you know, kind of base price points is healthy and good for the market. The big, big swings are never, you know, the greatest thing in the world. So again, since we last spoke, seeing it kind of very much similar price points for both and hovering and kind of, you know, moving up and down a little bit either way. But no, I think it’s all very healthy for the market and speaks to the long term growth and health potential that we, you know, we see here for gold and silver.
Yeah. And certainly quite a year it’s been. Again, you go back to the beginning of the year, we were looking at six or seven rate cuts and here we are. Those haven’t happened, but we’ve still had the rally and as I mentioned, perhaps we’ll get to this first, then maybe come back to some of the Fed and economic data, but continue to see other countries taking action. We’ve seen India adding to central bank gold reserves and also repatriating their gold. Now we have Nigeria plans to bring gold reserves back home to minimize risk. I thought it was interesting, some of the things they actually mentioned here to mitigate risks associated with the weakening us economy, economic indicators such as rising inflation, escalating debt levels and geopolitical tensions.
Okay, we’ve been aware of that. We’ve talked about that before, but now we see, have raised apprehensions among nigerian policymakers about the stability of the us financial system. So as I say, often we’re in the territory of nothing. Me saying it, not you saying it, Steve. But we’re seeing a growing list of countries take action with gold, looking at metals and also saying very clearly what it is that they’re responding to. So whether someone agrees with them or not, we’re seeing actions are being taken based on all of the things that you and I and others have been talking about for these past couple of years.
Yeah, I mean, how bad is it when Nigeria thinks their gold is safer at home and stored somewhere else in the world with what goes on in that country? But I mean, again, I mean, they’re identifying, countries like this are saying when stuff does hit the fan here and all hell breaks loose and the US starts losing its power, you better have your gold in your country, in your hands or you’re never going to get it or see it or be able to take any advantage of it. So it’s, it’s one after another. I’d be curious to see how much they were able to take delivery of.
I mean, that’s always been an ongoing saga of trying to get your gold back, depending exactly, you know, where it was stored and what’s going on. But, you know, we’ve seen over the last decade or two, it’s been hard for countries to get delivery back with their gold because the gold doesn’t actually exist where they think it’s stored. So it’s, it’s just one more, you know, it’s all you say, it’s all these different indicators that things are slowly falling apart and challenges to the US dollar is the reserve currency and the power, you know, the largest power in the world.
And so it’s interesting to watch and see where we’re going to go. And we’ve been in this environment now where we haven’t seen those rate cuts and yet gold and silver prices have continued to perform pretty well. And you know, whether it was four or five, six, seven, now we’re down to one or two expected possibly this year. If we get a surprise rate of cut sooner than later out of the US, then what’s going to happen with gold and silver prices? And I think it’ll be pretty interesting to watch. Well, while that’s happening, keep in mind that now we also have a report here.
Gold buying frenzy grips Vietnam and Thailand as economic fears mount. So again, we’re seeing other countries in the world, some in some cases related to the Federal Reserve, some in some cases they have just their own concerns. But here we see anxious consumers in Vietnam and Thailand rushing to buy gold as they’re concerned about economic instability. They’re trying to do is protect themselves against local currency depreciation. And perhaps the takeaway here is that, I know maybe this has changed a little bit, especially if you’re watching shows like this, but I would say if you went back ten or 15 years and you talk to people and say, well, gold and silver, a store of value, especially in the US, maybe a little less so, Canada, they say, okay, that was, that was for grandpa back in the fifties.
But here it is, we’re seeing a variety of countries. Again, not your opinion or my opinion yet. As these things are coming to a head, they’re continuing to look at gold. So the idea that this is just a relic of the past, we’re seeing financial power vote otherwise, well, it’s a weird thing for, I mean, for people both in Canada and the US. I mean, when you’ve been, especially the US’s case and you’ve been this economic power and you’re the center of everything, people haven’t experienced the devaluation of their currency, but every currency that’s ever existed in this world has gone down to zero.
And the one thing that’s always held value against that, the same, you know, fraction of an ounce of gold buys you a loaf of bread or buys you a suit, you know, going back 100 years, you can’t say the same thing ever about any of those currencies. And so what’s been interesting is these people in other parts of the world that have experienced and have seen what happens when you get rapid devaluation of your currency and they appreciate the value of gold and understand that principle, where north american investors have never experienced that. They don’t understand that it is not even in their mindset to see it start happening.
And you see it happening in all these other parts of the world right now. But the kind of changes is that they’re looking at it as well, of it’s the US that’s failing right now, it’s the US that’s at risk, and in that case, it’s their currency. But other investors on the road are looking at the US and saying, what’s going to happen now if that us dollar collapses and fails? And what does that mean for our country? If our country owns whatever, whoever’s country it is, owns a bunch of t bills or owns all these things and are exposed to what happens when the US currency devalues greatly and their wealth is all held in us dollars and how that can affect their currency.
So people are rushing to gold, and that’s. And especially in the east, like those countries are eastern countries. And the people in the east especially seem to be the ones accumulating physical metals at a rapid rate versus, you know, there are those that stack here and understand gold and silver, but the majority doesn’t still, and isn’t interested and doesn’t really pay full attention to it. But they’re going to, they better figure it out quick or the wealth they’re going to lose when things do hit the fan is going to be astronomical. Well, I certainly agree. And as you mentioned, other countries also, that certainly the economics tied to the US here is the yen above the 160 level.
And also significant to the degree that if we look at the treasury holdings, we can see Japan clear. Number one has been that way for a while. But if obviously a lot of speculation over whether there will be another yentervention, as the kids call it these days, which could include them selling treasuries to raise dollars to support their currency. And obviously we had Russia stop buying treasuries a couple of years ago. China’s been reducing their holdings, so we’ll just see how that one goes. And yes, the other thing that you mentioned in there about some of these problems coming to a head, and I know there’s a degree people who are listening to gold and silver investors wonder if they’re always just inevitably saying, hey, there’s going to be an issue yet.
Point out two views here. Here is former Fed president Bill Dudley, who mentions the more it borrows the US. The more it borrows, the greater chance it ends up in a vicious cycle in which government debt and interest rates drive one another inexorably upward. When it happens, it tends to be sudden and brutal. So there’s your former Fed chairman, and Steve, I know one of your favorite banks, Jay Barry, co head of interest rate strategy at JPMorgan. He mentions expanded deficit would require us to issue an additional 150 billion of debt in the three months before the fiscal year ends.
He expects most to be added through short term treasury bills. And such a move would increase the total outstanding stock of treasury bills to 6.2 trillion. Here’s the key part. It’s likely that the share of treasury bills as a share of total debt increases, which opens up the question of who is going to buy them. This could absolutely strain funding markets. So again, I don’t think either you or I are like going out to fear porn or alarm people, but we’re seeing the people at the banks and at the central banks say many of these same things and explain how it could ultimately get resolved.
Yeah, it’s scary. I mean, there’s less and less foreign countries that are buying those T bills. And what interest rates do you have to put on those T bills to attract people to take the risk to buying them? Where traditionally it’s been, that’s been the safest, allegedly the safest spot for people to plant their money and just be comfortable doing it. So the more things slowly go against the US or start changing, the harder and harder it’s going to be to get people to buy those T bills. And that’s how they’ve been servicing their debt forever.
So how it’s coming to a head, it’s just a question of when. And it seems to be that we’re a lot closer now than we have been in the last couple of years. It sure does seem that way. And just again, I don’t know if we call this one the Steve Kopas right video, but also in your corner, also in Steve’s corner here we have the secretary of OPEC, who mentions down here policymakers and forecasters, as well as advocates of a fast energy transition need to carefully consider if the needed investments in volumes of critical mineral supplies are feasible in their net zero scenarios.
Steve, obviously something else we’ve talked about a lot where you, I mean, you have a couple different compounding parts here, but here, even OPEC confirming something that you’ve been saying quite a bit. I’ve been wondering about quite a bit where he also talks about the, the energy sources that are needed to get these metals out of the ground. And I’m assuming nothing has changed in your view and that we have a little bit of an issue there. Well, I mean, I think you’re starting to see even some of the car companies, I acknowledge that. And now more, I mean, it’s still going to be issues, but more starting to ignore electric and say, is the future going back to looking at hydrogen fuel cells or different versions of that? And we’re not going to be able to sell full electric vehicles and power them and service them.
But then you get into the question of, okay, how do you set up the infrastructure to service a whole new hydrogen wing of vehicles and fueling them and having charging stations? And it just comes back to, oh, I mean, you’re going to have fossil fuel burning vehicles and is it really that bad to have that in the grand scheme of things versus, you know, the amount of earth that needs to be mined to deal with the different critical minerals? And I want to include, so you and I talked before this that silver very much should be included as a critical mineral because it’s essential in so many different things that these governments are trying to push.
And whether it’s solar or the cars or, you know, various other uses, it’s, there’s not enough silver. And, you know, these countries like the US, like Canada, need to start producing and keeping and securing their supply of silver along with the other critical minerals to, you know, for their own manufacturing and for their own, you know, process. Because we’re getting, we’re seeing is that all that mineral is going east, you know, especially, you know, seeing the spell. What we believe is happening is that those industrial users in Asia are going long on their silver contracts and taking delivery to secure their supply.
And that’s where we’ve gone essentially from 165 years above ground. When we go back to that TD article to one to two here, you know, in five years, you know, from 2019 to 2024, and there’s still no silver mines coming online. We’re losing production. We’re having different geopolitical things happening around the world. And it’s just countries need to have their own silver that they’re producing and using for their own manufacturing. And, you know, frankly, Canada and the US both need to be increasing our own manufacturing within our country. You know, it’s hard to compete with China and it’s hard to compete with the cost of labor and everything else.
But I think, you know, with progressions in AI and different things that are going on it’s going to be more and more important that our countries produce their own materials and need to, you know, protect the supply of all these different, you know, minerals that they can within our own borders. Yeah, and we, we’ve seen that this year. I think you and I talked about it on one of these shows. I know we brought it up at some point how us government has been investing in canadian minerals. We’ve had that petition from several of the silver executives to have silver listed as a strategic mineral in Canada.
And as you and I were talking about before we hit the record button, I remember Keith Neumeyer when talked with him about it, he said that they had approached the US and basically they said, yeah, you’re right, that was an oversight that wasn’t on there. So whether that gets listed or not, we will see. But another thing I wanted to touch on is that as I mentioned, we will have the minutes coming out and just a little bit later this Wednesday afternoon, although here some of the things that the Fed is now considering as we head towards.
We have a meeting in July, but a lot more speculation on whether we get a cut in September. Now, I’ll show the pricing on that in a second. But here is the PC inflation index. Again, I know we can take with a grain of salt some of the inflation numbers that come out, but at least from the perspective of what the Fed looks like, what they’re acting on, you see here, we’re below 3%, came back down to 2.6%. In terms of PC core, you see a similar trajectory that came down to 2.6% this month. Jerome Powell has also talked about employment possibly being sufficient to go to interest rate cuts and unemployment.
We see back here in May at 3.4%, now at 4%. And Steve, I know you get excited about the Fed meetings and one of your favorite times every month and a half or so, we see now 69% chance, if you count these two buckets here, of a cut as early as the September meeting. Any thoughts on that, perhaps more specifically how that would impact the metals? We’ve seen the rally with rates staying higher for longer. Would sure think when we finally do get those cuts that that would hit the metals pretty significantly. But what do you think on all of that, Steve? I mean, I think they need to react to some of these other countries around the world that are already starting to do their right cuts.
I don’t think the US can sit there and be an outlier and not do it. They were a front runner for the most part with the rate increases. So I mean again, I think we’ve talked about any number of things with the health of the banks and health of people’s livelihoods and everything else that’s going on in Canada right now. I can’t say that the US going to see it on a daily basis. But I know like our housing market in Vancouver again is even with a rate cut is getting locked up. And there’s other things happening here as well with capital gains increases and different things changing.
But our housing market has slowed to an absolute crawl. Talking to realtor friends, you know, they don’t open houses again, lower Mainland or Vancouver and no one’s showing up like it’s a ghost town. So there’s things happening. You can see, you know, the economy is suffering and people are suffering and there’s less and less, you know, extra spending, investment, different things going on. And like I said in Canada they just, you know, jacked up our capital gains tax from 50% to 66%. So people are panicking and been selling before their June deadline on, you know, a lot of their stuff that they had gains on that they wanted to lock in before those percentages increased.
So I mean, again, people are struggling, people are suffering and you’re also in an election year in the US. So again, I think as much as a disaster as that is, there’s always going to be pressure and the Fed is supposed to be separate, but they’re not. And so there will be pressure from politicians to start easing the tension to show no things are getting better. It’s not going to be this bad under another if Biden somehow wins or whoever replaces him. If that happens, they need to show Americans 1015 percent that decide the election that aren’t just going to auto vote Republican or Democrat, no matter who’s running, that their livelihoods are going to get better and that they can show some economic advantages to them even if it’s short lived going into an election.
And I fully expect a rate cut or multiple rate cuts, but you never know what the Fed, so you know, they can change their opinion and do different things. But I, you know, I definitely think we’re in for one or two. I think if we get one in September, it’s definitely going to, you know, if the expectation is only 60, whatever, whatever you said it was 69 or whatever that percent was, then, then you’re going to see metals prices because you are shocking the market a little bit if you have a rate cut in that timeframe by those percentages.
So lets hope that happens and we see a breakout by, I think especially silver would break out on that front. Golds been performing very well as it is, so itll continue to slowly work its way up. But silver still has a lot of catching up to do and im excited to see how it does that. I agree. And its interesting what you mentioned about the meeting being in September, obviously before the election. I get it. There’s the independents. We also have had reports of the Trump team, basically that if he comes in May as well, put him on the board.
So we’ll see how that goes. But certainly something that we will keep an eye on. And one other thing I’ll just mention that obviously will factor into that. Here we have the latest GDP now forecast, and that came back at 1.7%. So here we were back q three reported over 4%, then we were down to 3.4%, 1.4% now calling for 1.7. So at least according to the government GDP numbers. Also indicating things are slowing down as well a bit. So Steve, in either case, appreciate that recap. I think these will be some of the things driving, especially the metals going forward and perhaps just wrapping up.
You could give us an update on anything new that you’re looking at this month with Silver Viper. Anything you can add? Obviously, goal is to get back out drilling and anything you could touch on there for folks who are following the company. Yeah, I mean, we’re definitely targeting a drill program here in the short term. We’ve got a couple of different groups that have actually approached us that nothing is firmly in place, but are interested in possibly doing something with us on the project. So we’re listing on ideas on that front as well, whether that’s a jv or other ideas.
It’s definitely, we need to get the company back up, drilling and going, and that’s more than warranted. It’s one of the best silver gold assets, certainly in Mexico, if nothing other parts of the world. There’s not a lot of quality silver exposure out there. And we certainly have that both with our high grade and our low grade. That would come with an old potential open pit heap leach operation down the road. But we don’t need to be an open pit heap leach operation. There’s enough high grade retrostructures here. This could become an underground, standalone operation by itself.
And especially if we can prove up that Quinton headache model of that deeper contact, you know, where you could get into a multi million ounce gold silver deposit with base metals and at depth, and that would be fully underground as well. So this. It’s still a very special project. It’s still a project that needs a lot of drilling to see how big and how, you know, it can possibly get. But, and we were going to get back to that, and we’ll get back to that very soon. So excited for that. You know, if that. If that times out really well with, you know, potentially drilling and having results in September with potentially a rate cut from the fed, you know, that would be pretty exciting times.
And September is normally a good time in our sector and industry as people come back for summer holidays. And you tend to see metals prices and stocks perform very well around that time as well. So I think stars may be aligning for us on that front and excited to see what that can bring. Yeah. And Steve, in there, you mentioned that you feel it is one of the best projects that are out there of that type, and certainly with the region that you’re in. But perhaps for anyone who might be hearing about silver Viper for the first time today, could you explain what it is specifically about the project that certainly got you interested, but also leaves you feeling that way? Yeah, I mean, it’s one, you’re in, you’re in a very mining friendly state in Mexico.
It’s the number one gold producing state, number three or four, depending on the year, in silver in Mexico, you know, a political state government that is very much, you know, it’s the number one industry in the state. You know, they’re very keen on having additional mines opening up and doing different things. So permitting has always been very friendly. We’ve got our summer or drilling permits in place for five years right now that we just got this year. So again, so again, it’s drill ready. All of our targets, anywhere we want to drill. But the main thing is, I mean, people forget we’ve already sitting here with, as of our last resource, nevermind all the drilling we’ve done since then that would expand on that resource.
But we’ve got 49 millionoz of silver equivalent, or 700,000 gold equivalent ounces, probably quite a bit higher than that now with the 300, the expansion of 300 meters on El Ruby to the south, which would all be filling in and what was open pit resource on that front. And then we’ve got all these dozens of targets have never been drilled that the team and the interim from when we did finally pause drilling have been exploring and seeing these high grade betrothal structures, seeing, you know, stuff surface sample higher than our discovery at El Ruby, which has been our main event.
So El Molino will be drilled in that first phase of drilling, and that’s 2 km east, showing the potential for another, you know, parallel trend. And these trends run for, you know, 100 plus ks. It’s just vectoring in on where the best mineralization and blowout is on the project. And we’ve got a large land package. We can go kilometers north south along any trends on the project with lots of targets. So it’s got the size potential. It’s in a good jurisdiction. It’s got. If you’re concerned about the open pit side with the current regime in Mexico, I think there’s going to be some changes moving forward on that.
But again, we have the potential to be an underground deposit as well and restructure the whole thing. The state’s known for open pit he bleach mining, so we modeled our resource after that. But we have, you know, kilogram plus silver pretty consistently throughout our high grade retro structures. So again, there’s lots of different ways to look at the project, and we’re, you know, open to that. Or, you know, ultimately, the mining company that ends up buying the project will make that decision how they want to mine it. But again, I think it. There’s not a lot of, like you said, there’s not a lot of quality projects out there that have silver exposure.
In our case, we’re about 60% gold, 40% silver. So even if silver prices don’t run, we get a very healthy exposure to the gold prices that have been economic back at $1,200 for open pit heap leach mining in this state. Again, I think we’ve got double or triple the grade on the open pit side that the existing mines and the average grade of those existing mines in the state. Plus we have our silver exposure. Our metallurgy is very good. It’s a special project. It just needs more drilling and to prove up how big and the size it can get to.
And as we all know, the market’s been tough over the last couple of years, but we’re ready. We’re ready to get back at it, and we’re exploring all the different ways that we’re going to do that. Very excited to see what the next six months brings for the company.
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