➡ The silver market is experiencing a wild day with prices dropping to as low as $61.23 before rebounding $9 higher. This is happening amidst the backdrop of the Iran war, which has seen silver prices drop about $30. Refineries are struggling to secure physical silver, putting pressure on the price. Meanwhile, the gold price has also seen a significant drop and rebound, and there are concerns about potential attacks on Iran’s infrastructure, which could have catastrophic economic and humanitarian consequences.
➡ Silver executives have been receiving calls from Chinese and Indian groups looking to secure their silver supply at a higher price. This is due to a shortage in physical silver, which has put pressure on the price. Despite a 30% drop in price in January, silver is still trading well, with demand expected to rise due to its use in various industries. The shortage of silver is a supply and demand issue, with consumption exceeding production and no new significant supply expected to hit the market soon.
➡ Manny from First Mint discussed their recent successful drilling program and the potential of their gold asset, Jared Canyon. Despite being busy with other projects, they’re now focusing entirely on Jared’s. They plan to publish an updated resource soon and will provide more updates in the coming weeks. For any questions, Manny can be reached at Manny@firstmajestic.com.

We are in the midst of another wild day in the silver market. Price got down as low as $61.23, around 3am this morning, has rebounded $9 higher since then, although there’s something people have been missing about what’s been going on in the background as we’ve seen the price of silver drop about $30 since the Iran war broke out. And just take a listen to what one of the largest primary silver producers had to say. For the first time in December, we received phone calls from refineries, you know, European ones and North American one.

And they were offering well above spot to secure that physical battle because they’re struggling. They were short, they’ve over promised, and they couldn’t really get the delivery in time. But the shortness in physical was real. And it did obviously put a lot of pressure on the price. Well, hello there, my friends. Chris Marcus here with you for Arcadia Economics on Monday, March 23rd, where we are seeing another wild day in the precious metals markets, as well as with everything that has been happening in the Iran war, where over the weekend it looked like things were headed down a very perilous path.

Fortunately, there was news out this morning that rather than basically destroying large portions of the world that Trump and Iran are discussing a deal to end the war, which has helped fuel quite a turnaround in the metals, we see the gold price as low as $41.28. Keep in mind the high of all time is $5600. So this morning the price got $1500 lower, although as that news came out, there has been quite a rebound. So basically, gold price has rebounded almost $400 since then. Similar picture in silver, where we got down as low as $61.23, currently up to $70.50 on Monday morning around 11 o’clock.

So quite a swing in both of the metals. And here is how things were looking over the weekend, where Trump had given a 48-hour deadline and was going to do an attack on Iran power plants. If the Strait of Hormuz wasn’t open, although what is quite concerning is that Iran warned it would target U.S. infrastructure, including energy and desalinization facilities in the Gulf. And just to put that in context, here is David Sachs, who is part of the Trump administration, explaining what we’d be looking at if we went down. I mean, obviously the energy component dangerous enough, especially from an economic standpoint, but in terms of desalination, why it is incredibly good news that Trump later said on Monday that they’re very intent on making a deal with Iran.

If the Iranians get hit, if their oil and gas infrastructure gets hit, they’ve already said they’re going to engage in tit-for-tat retaliation against the Gulf states. And we saw there was recently, the Iranians blew up this giant oil depot in Oman. You saw some of those images. They could continue to target the oil and gas infrastructure across the Gulf states. Furthermore, there’s an even worse, I think, scenario from there, which is the region is very dependent on desalination plants. I think something like 70% of Riyadh gets their water from desalination. I think it’s something like 100 million people on the Arabian Peninsula that get their water from desal.

I mean, it’s basically a desert, right? And those desal plants are soft targets. You already saw there was, I think there was one desal plant in Iran that got hit. And then it caused Iran, again, tit-for-tat to hit a desal plant. I think it was in Kuwait, I could be off about that. But in any event, if you see that type of destruction continue, you could literally render the Gulf almost uninhabitable. I mean, you’re just not going to have enough water for 100 million people. And human beings just cannot survive very long without water.

So that would be a truly catastrophic scenario. And we’re talking about destroying the Gulf states economically, and then also from a humanitarian perspective. So I think we have to take things like this into account when you hear people preaching for or advocating for escalation. So obviously, anything that is going to avoid that outcome would be great, especially since here was a group of executives saying that it’s roughly two weeks and counting for the Trump administration and allies to join the effort to reopen the Strait of Hormuz or corporate executives have to assume that the conflict will drag on at least until mid-year with all the negative consequences that come with that for the global economy.

So a lot happening out there, as you can see. Yet throughout this stunning sell-off in the silver price in particular, that’s taken it from over $96 right as the war broke out to as low as 61 bucks. That’s a $35 sell-off in the midst of some of the most turbulent economic conditions that we have ever seen. And fortunately, I did catch up with Manny Alcafaji of First Majestic Silver last week. And he gave a little insight into what is actually happening behind the scenes of the silver supply, where we continue to see indications of tightness, least of which are the elevated spreads in India and China.

But with that said, let’s hear what Manny had to say about what’s going on with the silver supply. Quite a treat lined up today because I’m joined by someone who first time guest officially on the show, although Manny Alcafaji, the president and chief corporate development officer at First Majestic Silver, who is working there each day with Keith in the middle of a historic silver rally, even if we’re a little bit off of the Manny. Certainly quite a fourth quarter you guys had. I think every new record in every single category.

Also, part of the reason I reached out and wanted to chat with Manny was that you guys had a much higher sales price than the average realized silver price in the fourth quarter. And of course, with the role that First Majestic plays in the market, you’re seeing a lot of interesting things that we were just talking about, regards to demand, interest in some of the conferences you’re going to. So really nice to have you here, Manny. How are you today, my friend? I’m great, Chris. I can’t complain. And thanks for having me on the show.

Yeah, well, it’s a pleasure. And obviously, people know we’ve had Keith on the show here for however many years going back. And first of all, perhaps, I mean, the main thing on everyone’s mind right now is what’s happened with Iran, where we’ve had a lot of tension escalate quickly. My understanding is that we’re at a very dangerous point where the longer this straight stays closed, you know, it’s not like, oh, I believe it’s 50 or 100 billion, but you could have real world impact. Just anything that you’ve been seeing there that you want to point out, especially at the same time, we’ve seen the silver price sell off a bit during that.

But any thoughts on what we’re seeing out there today? Yeah, well, it’s obviously quite unfortunate what’s going on there. And there doesn’t seem to be an end in sight. And I think that’s the frustrating part that’s a little bit different scenario that was painted when the war first started. Obviously, that’s putting a lot of pressure on a lot of commodities, especially oil. We’ve seen the spike that who knows how long that’s going to last. But it’s definitely making people nervous, how long that’s going to go for, what the other implications are, the inflationary impact that is unavoidable, that’s really going to hit.

No one is safe. Every country involved or not involved directly is going to be feeling the impact of this. So it’s quite concerning, absolutely. Risk on, risk off events are going to be happening, I think, for the next little while. We’re going to be seeing some choppy markets. But what’s unfortunate, what’s going on, obviously globally, does push people for safe haven investments. And whether it’s gold or whether other tangible assets, I think this is going to be the time to shine for a lot of people who are looking to hedge their bets against this unavoidable inflationary wave that’s facing us.

I think it’s well said. And I wonder if we don’t have a break point headed somewhere down the road where right now, OK, we had inflation higher than expected. So people think Fed’s less likely to cut. So silver sometimes sells off yet. Inflation is not looking good where we are now, let alone what’s happening. I wonder if at some point people start stop caring what the Fed’s going to do and just start looking to silver. We’ve seen that to a degree already. Many on top of it, we had incredibly weak labor reports.

And now the Fed really back in a corner, although it’s like there’s all this has been going on. People have kind of forgotten already what happened these past six months in silver where it took 45 years to break 50, then it went up to 120 in the span of two and a half months. A lot of which, as you and I talked about, was great to see you at the Vancouver conference. Tightness in China, tightness in supply. We’ve seen that evidence in the premiums. Talked to silver executives who were getting calls from Chinese and Indian groups trying to secure their supply at a premium.

Anything, obviously, from your firsthand look into these things that you could share of what we’ve seen in terms of that? Yeah, look, all that is true. You know, us personally, we received three phone calls from our atypical buyers. We typically sell, our sales typically go to the banks. And obviously, a portion of that now goes to our mints. So we do about 10, 12% of our production to our mints, which turns into a retail product. But the majority goes to the banks and the traders. But for the first time in December, we received phone calls from refineries, you know, European ones and North American one.

And they were offering well above premium, or well above spot, sorry, to secure that physical metal, because they’re struggling. They obviously, you know, they were short, they’ve over promised, and they couldn’t really get the delivery in time. So, you know, it’s not really our business to engage to that level. But, you know, in one instance, we did and we received a pretty attractive premium that we didn’t. And obviously, it was a reputable, ultimately, clients that we trusted and verified. But that shortness in physical was real. And it did, obviously, put a lot of pressure on the price.

We’ve seen an arguably an unhealthy move in the price, to be honest, you know, it went parabolic, and it was making everyone, everyone knew that it had to correct what that correction looked like, or what would have looked like no one really could, could really see. But we’ve seen that 30% drop in one day in January. You know, it’s obviously quite substantial. But to call silver at $80 a crash, I’m probably going to disagree on that one. It’s not really a crash. You know, it’s just last quarter where we had a record quarter, silver price averaged $55 to have it at $75, $80 right now.

Well, that’s pretty darn good as well. But I think the takeaway is, it’s now starting to trade sideways. And that’s that gives us that’s giving us more comfort. Seems like it found a base, it could have gone much lower than this, quite frankly. The fact that it hasn’t, it hit the low 70s and it bounced back. And it’s kind of trading in this range right now between the 70 and 90 is a welcome move from our view, at least looking at the charts, you know, it’s building a bit of a consolidation, and hopefully to what what’s going to be the next run up.

Yeah, I certainly agree. And I guess my question to that is that those conditions that you describe that think helped drive the price to 120. Well, I think they’re not perhaps, when the price isn’t rallying, people aren’t thinking about it as much. But at least from what I’m seeing, that hasn’t been resolved. It’s still out there. It’s not like it’s gone away with, so I mean, if it was there at 120, are those conditions still there? Have you seen them alleviated at all? Look, silver story is basic. Nothing has changed, right? It’s a supply demand issue.

And it has been for the last five years. You’ve seen our corporate deck. And, you know, we do highlight this deficit that’s real. You know, one thing that’s, you know, we’re obviously consuming more than what we’re producing. And there’s really no new supply hit in the market. We’ve talked about this before we started recording. We know the silver space, we know we scout the planet for more silver. We’re one of the larger silver producing globally. We are the purists. So we know the space and we know there’s really nothing material coming online anytime soon, at least nothing that’s going to bridge that gap between demand and supply.

We also know that demand is expected to continue to rise with some additional industries hit in the market, but it’s not really factored in right now. You know, we talked about solid state batteries that Samsung is developing that’s coming online next year, or maybe two years. We talk about AI they are Renaissance. We were at a conference recently and we saw a slide and a new data center consumes about 6.6 tons of silver. And that’s that’s not in the current demand right now. Where’s that going to come from? We’re talking about nuclear Renaissance, more governments are talking about clean energy and now warming up to the idea of nuclear.

Well, that consumes a lot of silver. You know, we heard the number, we’ve not been able to verify it, but a new nuclear reactor consumes 5 million ounces of silver. And these just those three items or these three industries, that’s not part of the current 1.2, 1.3 billion demand. So look, I think it’s going to put more eyes on silver. Silver is obviously deemed as a critical mineral last year. And there’s reason behind that. I think more groups, more institutions, and now governments waking up to this story. Yeah. And the other one you mentioned in there was the Samsung solid state battery.

I’ve heard some people aren’t sure whether it’s actually being developed. Have you heard anything further or any confirmation? I know you suggested maybe even a year or two we could be out. Anything more you know on that one? Yeah. Last year, we actually had a conversation with Samsung and we did ask them that and that’s happening. That’s their R&D department has been focused on this. We’ve also heard that Toyota is actually developing something similar. I don’t know if it’s collaboration with Samsung, but it’s something that’s going to be consumed in EVs and hybrid vehicles that’s going to obviously optimize the charging ranges and how quickly you could do that.

And if you have the opportunity to charge your car in 10 minutes and you’re getting your 500, 600 mile range, well, sure, it might be an incremental higher cost, but I think it’s going to be a welcome change. It’s still being developed, but we understand that within the next year or two, it’ll hit commercial production. Well, I really appreciate that because I know a lot of people are quite intrigued. And Manny, the other one, you touched on this a little bit, but here again, first of all, congratulations on the fourth quarter and full year as you and I talked about in person, the timing of the gato steel.

We may be doing case studies on that at Harvard one of these days. Although as we scroll down here, I noticed the average realized silver price for the fourth quarter for you guys was $69.74 versus $55.20 on the COMEX. Hey, you pointed that out, $55. I don’t think most people would have guessed it was that low, which means I’ll just say this is my comment. If you guys hit records when the price was $55 an ounce and we’ve been to $1.20 and back and hovering in the eighties certainly sets up for an exciting first quarter.

But what happened here that you were about $14 over the COMEX price? Yeah, so it’s important to recognize here. So this is just from our mints. Okay, so we sell, there’s really two avenues for our sales. We’ll sell at spot to the banks and then we’ll direct about in Q4, we did 12% of our solar production has been sold at the mint. So 12% of our production was sold at an average of $69, which is much better than we would have been able to get. That’s our consolidated realized price was close to $59, again, higher, so about 10% higher.

And that’s really some of the innovative approaches that First and Justice has. We’re not just settling for what the banks are paying us. We’re able to capture additional margin through our vertically integrated business through the mints. And the mint has been, it’s funny, you’ve known First and Justice for quite some time and we’ve always handed off and eventually started selling some of these coins at road shows or conferences and over time, our shareholders started calling us, hey, we want to buy your silver. So we started processing it. And it really started as a marketing cost center, right? We weren’t doing it to make money, but over time demand built and we’ve not been able to, we used to contract third party mints to handle that business for us, but they just now have been able to supply or meet the demand that we’re getting.

This is our silver sitting on their floors, but they weren’t processing it enough. So we decided, screw this, let’s do bottleneck this side of the business and build their own facility. And it’s nice to have it contributing meaningfully. So what used to be a cost center has now become a profit center. It’s making more money, that part of the business, it’s actually making more money than some other mining companies, to be honest. Yeah. And I mean, the coins, I got this one, if you can see that here in the show. I mean, I really do like the ones that I got here.

So that’s your Vegas round. That’s a beautiful round. I, it reminds me of one of those Aztec calendars. And then I got my snake coin up here too. So very pretty luster on these and people can find more of the silver that you sell direct to the public at first mint. Although Manny, I know you have a call coming up, but before you run, perhaps you could just give us an update. You had some more results from Jared Canyon, just within the last week or two. Anything you could say about Jared and what do you guys see as the plan? Is it going to be up and running? Where are we at with Jared right now? Yeah, look, it’s obviously a great option for us to have a gold asset in tier one jurisdiction.

Gold is at $5,000. It’s building a very compelling story. We see a lot of value here. So we’ve had a successful drilling program in 2025. And it’s important to recognize that we’ve not really been able to spend much time at Jared’s with the gato’s integration and acquisition and all that. So we were really tied up for about 18 months or so focusing on gato’s. Now that’s done, we’re shifting focus 100% of Jared’s. The drill results was part one of the update. Those results will get wrapped into an updated resource, which we’ll be publishing as part of our annual information form in a couple of weeks.

So I will be done by the end of the month. And on the back of that, we’ll be putting a standalone update on what Jared Canyon plan looks like going forward. I can’t speak too much about that right now, but I urge you and your audience to pay attention. Over the next few weeks, we’ll be providing more of the public. Well, I’ll certainly be looking forward to that. I know you have a whole handful of shareholders who will be as well. Obviously, people can get your updates. Signing up here, I will be keeping my audience posted.

Although Manny, if people did have questions, wanted to reach out to you guys, could you just let them know the best way to do that? Yeah, absolutely. You can always reach out at info at firstmajestic.com. Happy to take on emails as well. You can reach me at Manny at firstmajestic.com or on X and LinkedIn and all other social media platforms. All righty. And that’s Manny M-A-N-I at firstmajestic.com. So, Manny, thank you so much for this update. You really have a unique vantage point into the market. And I know this will be helpful for people.

So, and again, congratulations to you and Keith and the entire team. It really was after there were people doubting you in the last couple years to see how that last year, and especially the fourth quarter, went. And I’ll sit here trying to contain myself until first quarter earnings are out. I guess I got to wait another two months, but it’s going to be fun. And maybe we can catch up, do this again after that. Yeah, absolutely. Appreciate this, Chris, and great chat over here. [tr:trw].

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