(Kitco News) - Silver has achieved a significant technical breakout, pushing above its 13-year resistance level of $35 per ounce, with prices touching $37 recently. According to David Erfle, founder of Junior Miner Junky, this weekly close above $35 marks a technical breakout, turning that price into important support.
In an interview with Kitco Mining, Erfle noted that the last time silver broke above $35 on a weekly basis in 2011, "it took less than six weeks to reach its all-time high of 50 bucks." He highlighted silver's history of moving "very quickly," and "very violently" when it does move. Follow-through with a quarterly high close above $37.50 this month could open the door to $40 and a potential test of the $50 all-time high later this year. The gold-silver ratio, which recently surged to triple digits, is seen as a "harbinger of much higher silver prices."
Importantly, silver miners have been leading the metal higher. Erfle stated, "miners generally lead the metal they produce in both directions." Ahead of the silver price breakout, the silver miner ETF, SIL, posted a multi-year closing high, signaling the imminent breach of the $35 resistance. Following the breakout, the higher-risk silver junior miner ETF, SILJ, gapped up above multi-year resistance at $14 with huge volume. This performance is "very encouraging for silver stocks," with many hitting 52-week highs.
America's Gold and Silver is undergoing a turnaround story under its new CEO, Paul Huet. The company recently secured a $100 million senior secured debt facility and an offtake agreement to fund growth at its Galena complex in Idaho. Galena, with a 170 million ounce silver resource, is expected to produce 2 million ounces this year, with costs projected to decrease as production increases. The company's balance sheet has been fortified, though the dilution from previous financings to address inherited issues has been significant.
McEwen Mining is also targeting a turnaround with its focus shifting to the Stock Mine at its Fox complex in Ontario. This move aims for increased gold production at lower costs, replacing output from a mine subject to what CEO Rob McEwen calls an "onerous metal stream." The company's growth targets, including increasing production to nearly 200,000 gold equivalent ounces by 2027, are supported by recent financing.
In major project news, Taseko Mines reached a landmark agreement with a First Nation in British Columbia, providing a pathway for the large New Prosperity Copper-Gold Project. The agreement places a 22.5% equity interest in the project claims into a trust for the First Nation, while Taseko retains 77.5% and received $75 million from the provincial government. While Taseko will not be the operator, this deal means 77.5% of a large potential mine is "better than a hundred percent of nothing," resolving a decade-long stalemate. The news saw Taseko's stock break out strongly above a decade-long resistance level.
Finally, Power Metallic Mines reported a significant drill intercept at its Lion Zone in Quebec, hitting 12.54 meters grading 10.99% copper equivalent. The company boasts investment from prominent figures like Robert Friedland, Rob McEwen, and Gina Rinehart. Erfle commented that with such shareholders, "he's got a lot of pressure on him to deliver." The discovery "confirms a large potential area to drill," and with significant cash on hand and multiple drills turning, the risk appears to be on the upside.
Subscribe on Apple Podcasts, Amazon Music and Spotify. You can also add the RSS link to your favorite podcast player: LINK