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boab-metals · 2 years ago

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SILVER’S BRIGHT FUTURE: HOW SOLAR ENERGY IS POWERING DEMAND

Solar power is a standout energy source in the race to reduce carbon emissions globally. The technology has been improving for decades, and we are now on the cusp of a rapid expansion in the capacity of solar to power industry, homes and innovations everywhere.

For anyone considering investing in silver, this makes the solar industry one to watch.

As solar installations surge, there could be a direct translation into higher demand for silver.

Boab Metals (ASX: BML) is proud to be a leading near-term lead-silver mining company on the ASX, poised to supply high-grade ore to a growing renewable energy market.

THE USE OF SILVER IN SOLAR PV PANELS

Silver is a vital component in solar photovoltaic (PV) panels. Silver enables efficient capture and conversion of sunlight into electricity thanks to its unsurpassed electrical conductivity.

The average solar panel contains 0.643 ounces (20 grams) of silver, around 3.2 to 8 grams per m2. According to The Silver Institute, this added up to 140 million ounces in 2022.

However, that number is expected to grow sharply in the coming years.

CHINA’S SOLAR INDUSTRY IS POWERING AHEAD

BloombergNEF reported in May that China had lifted its outlook for solar panel installations in 2023 to 154 gigawatts (GW), up from the previous forecast of 129 GW.

That number could rise again next year to between 200 and 300 GW. Between January and the end of April, the country installed more than three times the number of solar panels compared to the same period in 2022.

For comparison, the US had 73.5 GW of solar capacity operating in early 2023, with plans to install 54.5 GW by year’s end. Australia, a minor but eager player, is on track to add around 2.2 GW of capacity.

WHAT DOES THIS MEAN FOR THE GLOBAL SILVER SHORTAGE?

It’s no secret that silver is in short supply.

In 2022, strong silver demand created a record-high 237.7-million-ounce deficit. This year, more of the same is expected, and China’s rapid solar growth could put more pressure on a tight market.

The 2030 forecast of 185 million ounces of silver consumed by solar panel production could even be brought forward to 2023 or 2024.

As demand for silver continues to rise, silver mining companies on the ASX will become imperative in addressing the shortfall. High-grade silver ore from responsible sources ensures a sustainable supply chain for critical industries such as renewable energy.

Silver is also completely recyclable. New technology is emerging that has the potential to recapture close to 100% of silver from PV panels. However, we are still years away from a large-scale rollout.

LEADING THE CHARGE ON AUSTRALIAN SILVER

The increasing adoption of solar as a clean and renewable energy source, coupled with technology advancements and favourable government policies, is driving the expansion of the solar energy market.

For near-term silver mining companies like Boab Metals, that means a ready market with a big appetite for high-grade metal.

The solar PV opportunity is just one reason investment in silver is rising. For more information about investing in silver, check out the Boab Metals blog and investor centre.

#mining industry

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boab-metals · 3 years ago

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How to find the best silver stocks on the ASX for your investment strategy

Silver has been a currency store and investment vehicle for over 4,000 years. During periods of market volatility like we’re currently experiencing, many investors turn to precious metals like gold, silver and platinum.

Precious metals tend to represent stability in fluctuating stock markets. But there’s one big question:

What is the best way to invest in silver?

Should you stock up on silver bullion? Buy shares in ASX-listed silver mining companies? Invest in an ETF that includes small-cap mining stocks?

The answer, of course, is “it depends”. It depends on your risk appetite, reasons for investing, financial goals and personal preferences.

Disclaimer: This is not investment advice, and Boab Metals Limited (ASX: BML) is not in a position to advise on specific investment strategies or stocks. Instead, we’ll outline your options for investing in silver so you can have a more informed conversation with a financial advisor.

Four strategies for investing in silver1. Physical silver

Owning silver is physically, emotionally, and (hopefully) financially rewarding. Investment-grade silver is 99.9% pure. It typically comes in the form of coins or bullion bars, which are stored away and exchanged for cash in the future.

Considerations for owning silver bullion and coins

Control: Owning a physical asset means you retain direct control. Unlike shares, which can change form or function (although they rarely do), nobody’s touching your silver bullion but you.

Storage: Safe storage often comes with brokerage and maintenance costs. Although a premium silver bullion would be a nice bookshelf decoration, you’ll need to figure out a long-term safekeeping solution.

Quality: Buying silver bullion from untrustworthy sources is incredibly risky. In contrast, bullion merchants like The Perth Mint have government-issued licences and their own production facilities.

2. ETFs with silver in the portfolio

Exchange-traded funds (ETFs) can be a great introduction to investing or a strategy to diversify your portfolio.

ETFs are pooled funds that spread your investment, along with the investments of others, across a bundle of assets. When it comes to investing in silver, there are two ways ETFs might work:

ETFs that own silver

Some exchange-traded funds buy physical silver. Part of your investment will be used for bullion, which means you benefit if the price goes up and minimise risk if the price falls.

ETFs that own silver mining stocks

Rather than putting all your money into one or two companies, the ETF might include small-cap mining stocks in a diversified portfolio.

3. Silver stocks on the ASX

Buying shares is the most straightforward way to invest in silver companies on the ASX.

Unlike owning physical silver, shares give you a stake in the company’s future performance. That means the share’s value is not solely tied to the silver spot price. Instead, you’re betting that the company will continue growing.

Considerations for investing in silver mining companies

Diversification: If the silver mining company is stable, diversified and growing, you could see above-average returns on your investment. For example, Boab Metals is a lead-silver mine developer with a joint venture agreement with China’s largest silver metal producer and plans to grow our project portfolio.

Other forces at work: Like any resources company, silver miners are subject to political, societal, environmental and governance risks (and opportunities) that have nothing to do with the price of silver.

Control over your investment: Buying shares directly rather than investing in an ETF gives you more control over your money, in theory. You can sell your shares, buy more, and make your voice heard at AGMs.

4. Silver as a hedge

When markets face inflationary pressures, some private and institutional investors use precious metals to hedge their investments.

“Hedging” refers to staking your investment on a future price. You agree to pay today’s price for a deliverable that won’t come for some time. In this case, that’s physical silver.

Hedging, also known as buying silver futures, is a complex investment strategy. It’s better suited to sophisticated traders with large accounts and mature risk strategies.

Considerations for hedging silver

No storage costs: Hedging exposes you to the same risks and rewards as owning physical silver. You pay today’s prices and benefit when the price goes up. However, you’re not burdened by storage fees in the meantime.

It works both ways: Investing in future amplifies your win and loss potential. Hopefully, the price goes up. But if it doesn’t, you risk the need to top up your position or lose your initial investment.

Spot or stay: Hedging can be used by day traders and long-term investors alike. You can gamble on today’s spot price or purchase futures for, well, the future.

The risks of investing in silver

Silver is often seen as the second precious metal after gold.

Much of that also-ran reputation comes from history. In the last 100 years, silver prices have fluctuated over short periods, often with no traceable cause.

But we believe that’s changing.

Silver is a crucial component in Australia’s green energy future. It is used in EV batteries, solar PV panels, sensors, circuits, and a long list of industrial applications. These could stabilise the price of silver above $30 USD per ounce in the coming years.

That said, any investment bears inherent risks. Some of these we’ve outlined above, such as betting on future spot prices or buying counterfeit bullion.

Other risks include:

Price fluctuations: Precious metal prices fluctuate in response to global events and market drivers, some of which are invisible until they’ve come and gone. Silver has been subject to spot price fluctuations in the past.

Silver mining company performance: Investing in small-cap mining stocks involves trust and market knowledge. It’s prudent to research any company before investing.

Alternative materials: Silver’s unmatched conductivity and high malleability make it a sought-after industrial metal. So far, there is no feasible replacement for silver. But that doesn’t mean there will never be alternative materials.

The silver mining stock to watch in 2023

Boab Metals Limited (ASX: BML) is on track to start construction at our Sorby Hills Project in the Kimberley in 2023.

We believe it’s going to be an exciting ride. If you’re interested in learning more about Boab Metals Limited or the Sorby Hills Project, here are some links to get started:

About Sorby Hills

The Boab Metals story

Information for investors

Joint venture partners

News and updates

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