Good Morning!

At the beginning of April, I anticipated an interim peak for Gold & Silver. But I did not sell anything or take profits. 

There's no reason to sell if you think the market could correct for a few months or you are very early in a major market move.

The big money is made by buying and holding leaders and future leaders for several years or until they are dramatically overvalued.

Speaking of leaders, today I am covering how to spot them in silver stocks, which have a strong value proposition.

I am focused on the explorers and developers and the three criteria you can use to spot the current and future leaders.

1) Size Threshold: 80-100M oz Ag & 300M oz Ag

The market and industry want big projects. 

The minimum threshold is 80M to 100M oz Ag. This means the project could produce +8M oz Ag/yr. 

Gold counts towards that threshold. Base Metals do not. 

This helps avoid projects with a smorgasbord of metals dressed up as Silver equivalents that contain too little Silver and Gold. Base metals as part of a Silver deposit are far less valuable than Gold. 

Rick Rule recently mentioned he wants to see a minimum of $10 Billion in recoverable ounces. At the current Silver price, that is 300M oz Ag. Let's consider that the next threshold. 

For small exploration companies, look for smaller deposits that have potential to grow to 100M oz Ag. 

Another opportunity is to look for the 100M-200M oz deposits that have potential to grow to +300M oz Ag. I know of one. 

2) Grade: Minimum 150-200 g/t, Ideally +300 g/t

The bare minimum should be 150-200 g/t Ag (not counting oxide projects). 

Ideally we’d like to see 300-500 g/t Ag. 

Again, Gold & Silver are most valuable but base metals mineralization boosting the grade is fine. It is far more valuable with respect to grade than size. 

This introduces some metallurgical risk, so pay attention to that.

Sponsor Companies

Calibre Mining (CXB.to, CXBMF) has now been acquired by or merged with Equinox Gold (EQX.to, EQX).

The two companies have a combined market cap of ~US $5.10 Billion, but have $1 Billion in debt.

Each company is building its most important and lowest cost mine right now. Both are in Canada, where the Gold price is extremely strong. 

The combo could grow its production +60% from 2024 to 2026. 

The combined entity could generate EBITDA of $2.50 Billion at $2900 Gold in 2026. An 8x valuation is quite reasonable. 

In short, if these two mines have no major issues or significant delays and Gold continues to trend higher, the new Equinox should be a sector leader. But given the debt load, any hiccups that require significant future capital investment will hurt the stock.

GoGold Resources (GGD.to, GLGDF) is currently a small Silver producer with a pipeline of two development projects. Its CEO Brad Langille owns a large position in the company and has a very strong track record.

The company is attractively priced and in position to produce 9M oz Silver-equivalent/year in a few years, with another development project that could take it to 16-17M oz Silver-equivalent.

The stock is acting very well. On December 22, 2024 we called a buy on the stock at C$1.10. It nearly doubled before the current correction. 

For more analysis of these companies and many more companies, subscribe to TheDailyGold Premium.

3) High Likelihood of Becoming a Mine

This is where we separate the pretenders from the contenders. 

This is also where a plethora of risks are introduced. 

Will the project be permitted? 

Is it good enough (economically) to be funded? 

How is the metallurgy? (Many of these deposits are polymetallic, which introduces metallurgical risk). 

Is the mineralization thick enough? 

There are some silver deposits with high-grade but mineralization is quite narrow.. You cant profitably mine 1-2 meters of mineralization 400 meters below surface.

4) Summary

This criteria can help explain why certain silver projects are valued more highly than others. 

It's all about the economic potential. 

Big, high-grade and will be a mine. 

If the project/company only marks 2/3, the market doesn't care and you have an optionality play. 

The absolute biggest winners will be those projects that have less than 40-50M oz Ag now but end up growing well over 100M oz Ag.

Crossing a size threshold gives you a major valuation bump.  

Some projects that already meet the three criteria are still attractively priced and have significant upside.

In TheDailyGold Premium....

In TDG #930, published April 12, we covered recent company news and provided some interesting charts.

Gold stocks successfully retested their breakout over the past two weeks. Gold is accelerating here while Silver is lagging.

So what happens to gold stocks and Silver if Gold makes an interim peak soon? We covered it. 

In TDG #928 & TDG #929 we have fully updated:

-Top 10 Company Table

-Top 10 Watch List Table

-Secondary Watch List Table

These tables include important company information including market cap, cash/debt and 150-200 words of notes.

What are people saying about TheDailyGold Premium right now?

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I have purchased many newsletters over the past 15 years and yours is hands down the BEST, and for the most reasonable price!! Newsletter writers often either don't understand markets, market timing or charts and/or write way too much such that important conclusions or guidance is basically buried in details that regular people like me (who aren't geologists) can't decipher.... resulting in trying to find the gems of important information buried in mountains of verbiage".- TDG Subscriber

Thank you for reading.

I wish you all the best in 2025 and beyond.