AGORACOM Small-cap Investor Relations Blog

Hello Current and Potential Investors,

The new restrictions in BC came fast and we had to act quickly in regards to our AGM in order to comply with these mandates. For all companies, this year has been challenging to accommodate  in person events like conferences and investor meetings. Though we normally see very few investors (if any) attend these meetings, these in person meetings can provide opportunities to allow investors to ask important questions and have management provide answers. Open communication with our shareholders is important to us.  Since our question and answer portion of the AGM has been cancelled due to these circumstances we want to make sure we remind all current and potential investors of our contact information so we can answer any questions you may have.
 
If you have any questions you would like to speak with us on, please Email any questions to [email protected] and we will answer these directly or you can call our office at 604-227-3554.
 
In addition, we will be compiling the questions asked and the answers into a Q&A that will be distributed to our mailing list.
 
We are very excited for the coming months. We are awaiting assays from the Regal Drill Program. Unfortunately the labs have a considerably longer turnaround time than normal, but our Regal results should come back to us in late December. Our Drill is currently turning on the Carscallen Extension Property and we are very optimistic for results in 2021!
 
Thank you, and we look forward to hearing from you,
 
Rob Edwards

Affinity is focused on the acquisition, exploration and development of strategic metal deposits within North America. In addition to the West Timmins Gold project, Affinity is advancing the Regal Project in the northern end of the prolific Kootenay Arch. Regal hosts two major geophysical anomalies as well as three past producing mines. Recent drill results included a new silver discovery with an 11.10 meter interval of 143.29 g/t silver which included a 0.55 meter interval of 2,612.0 g/t silver Click Here For More Info

They say patience is a virtue. Well, if anyone is virtuous these days, it has to be silver bulls.

They also say good things come to those who wait. I believe those good things will be coming…in spades.

Silver reached just shy of $50 back in April 2011. A decade later, we’re still just barely above half that level.

But that’s all about to change.

Since bottoming in March, gold has rocketed to a new all-time high near $2,070 in early August, up 40%.

But silver’s trough-to-peak gains have put gold’s to shame. The white metal bottomed in March near $12, then soared to a $29 peak, also in early August, for a blistering 140% gain in just 4½ months.

When silver really gets going, it can surprise even the most ardent of silver bulls. And odds are it’s going to go on several more runs like this in the future.

Here’s what’s making this metal tick, and why what lies ahead for silver is going to surprise us all.

1. Silver’s Monetary Side

It’s widely accepted that silver is both an industrial metal and a monetary metal. But now that precious metals are in a secular bull market, silver’s monetary side is likely to have an outsized impact.

If we look at how silver compares to gold in bull runs, it turns out silver has outperformed five of the last six times. Silver Comparative Price Vs Rising Gold Prices

That’s likely going to happen again this time, and the main driver will be investment demand.

According to the Silver Institute’s Annual World Silver Survey, silver investment demand was up 12% in 2019 over the previous year. The Institute recently reported that in the first half of 2020, investors hoarded 10% more silver than in H1 2019, mostly through buying silver-backed exchange-traded products (ETPs). As a result, ETPs have been setting successive record high levels of holdings this year. Total Silver Demand 2019

What’s more, it’s estimated that just 6% of all above-ground silver is in investment form like coins or bars. The rest is almost evenly split between industrial uses and jewelry/decorative uses.

2. Challenged Silver Supply

Besides rapidly growing investment demand, one of the biggest drivers of higher silver is going to be limited new supply.

Just 28.7% of new silver supply comes from primary silver mines. 71% of newly mined silver is only produced as a by-product of other metals like gold, copper, lead and zinc. Silver Supply

In a recent Kitco News interview (Kitco.com) E.B. Tucker, director at Metalla Royalty & Streaming (OTC:MTA), (TSXV:MTA) said:

“Silver’s got some catching up to do. One of the things about silver that people need to understand is that the supply of silver is not elastic, and what that means is if the price goes higher, the mines can’t just turn it on. Only about a quarter of the supply comes from actual direct silver mining, the rest of it comes from by-products, and recycling.”

Even once silver prices soar, mines that produce silver cannot just ramp up silver production. And silver is often a small portion of their revenues, so there’s little incentive to produce more.

3. Silver’s Technical Outlook

With fundamentals lining up, let’s examine the technical side of silver’s near-term outlook. Silver Daily Chart

Silver has been forming a symmetrical triangle pattern since early August. Volume’s been dropping over the past month, and the RSI and MACD momentum indicators continue to move downwards. This suggests more consolidation and, for now, a possible downside move once the triangle is breached. The $26 level is the first downside target, then the $23–$24 range would be next.

Silver stocks, via Global X Silver Miners ETF (NYSE:SIL), are reacting in much the same way as silver itself.

SIL Daily

The only difference here is the RSI has gone mostly sideways for five weeks. For SIL I’d expect a first downside target to be $45, followed by $40.

But once the current consolidation/correction is over, which could still play out over several more weeks, I’d expect silver to come back with a vengeance.

The Fed is standing ready to “print more on demand,” while the European Central Bank and others are signaling more as well. The COVID pandemic is seeing cases tick up as kids head back to school and we head indoors. Oh, and there’s a critical federal U.S. election, amid a highly antagonistic political environment, in under two months.

Silver is likely going to reach above $37 before the year is out, as its monetary role starts to dominate once again.

Rest assured, your patience will be rewarded.

SOURCE: https://www.investing.com/analysis/silver-bulls-will-be-handsomely-rewarded-200537685

Affinity is focused on the acquisition, exploration and development of strategic metal deposits within North America. In addition to the West Timmins Gold project, Affinity is advancing the Regal Project in the northern end of the prolific Kootenay Arch. Regal hosts two major geophysical anomalies as well as three past producing mines. Recent drill results included a new silver discovery with an 11.10 meter interval of 143.29 g/t silver which included a 0.55 meter interval of 2,612.0 g/t silver Click Here For More Info

Ned Naylor-Leyland has been all-in on silver for 18 years, earning derision along the way from fellow investors favoring the more glamorous gold. Now, with silver’s price skyrocketing 51% this year, he’s got reason to feel vindicated.

The manager of the $1-billion Merian Gold and Silver Fund in London proudly calls himself a “silver bug,” a term describing an investor whose fervor for the precious metal is more extreme than the typical bullion enthusiast’s. The bugs foresee a crash of the fiat cash system in the aftermath of unprecedented monetary stimulus, putting silver back in play as a viable currency. Their core tenet is that gold’s cheaper, more volatile cousin will continue surging in value.

“I’ve been waiting since 2002 for the inevitable demise of this monetary system,” Naylor-Leyland said. “I’ve been standing there waving on the top of a hill for the last 20 years, and suddenly everyone’s pointing at me saying, ‘That man’s a genius.’”

They have plenty of forebears. The Coinage Act of 1873 demonetised the metal in the US, sparking backlash against the government and allegations of corruption from the “Silverites.” The most notorious speculators were the Hunt brothers, three sons of a Texas oil billionaire whose fear of inflation and belief in the metal as a store of wealth prompted them to try corner the global market in 1980. They stockpiled more than 200 million ounces, driving the price to $49.45 before it crashed below $11.

Now, the bugs are having another moment. The metal has had an outstanding year, with its gain almost double gold’s. The rise has come off the back of a weakening dollar, plunging real rates and geopolitical tensions — all of which give investors motivation to seek haven in precious metals.

But that gain is nothing to most silver bugs, who foresee even higher prices because they believe more people will lose faith in the value of government-issued currency. Just read their Reddit message board with 47 000 members or the online Silver Forum with almost 12 000.

“Silver’s got its animal instincts back,” Naylor-Leyland said. “People have spotted it, and they’re interested in it.”

Not everyone is on board, though. Jeffrey Christian, managing director of New York-based commodities research firm CPM Group, has heard the story before.

“These guys have been waiting for the collapse of the global financial system for 40 to 50 years,” he said. “Nothing you can do can make them think they’re looking at the world the wrong way.”

The disciples point to evidence suggesting they’re right. Physical silver bars, the preferred investment vehicle for die-hard bugs, currently are in short supply, with refiners struggling to keep up with demand from dealers.

The delays also can be attributed to silver being less valuable than gold, so smelting enough bars to produce a quantity worth investing in is more labor-intensive. Whatever production there was took another hit when refineries shut down earlier this year because of the coronavirus pandemic.

For other silver-bug favorites like coins, investors are paying far more than the spot price to get hold of them. Gregor Gregersen, founder of Singapore-based dealer Silver Bullion, said premiums for American Eagle and Maple Leaf coins currently are about double the usual, due to scarcity.

Retail investors’ thirst for silver is also tapping into exchange-traded funds, which added more than 8,800 tons of the metal this year. They’re particularly popular with the Robinhood Markets crowd, which prefers to invest digitally rather than by purchasing bars and coins.

The number of users buying into the largest silver ETF, the iShares Silver Trust or SLV, more than doubled in the month leading to August 13, when the app stopped publishing the data

But to the old-fashioned silver bugs, ETFs aren’t worth the paper, or smartphone screen, they’re written on. They allege the funds are backed by metal that doesn’t exist and are a tool designed by banks to absorb investor demand and curb prices.

“In this market, the only thing that counts is physical,” said Gijsbert Groenewegen, a co-founder of hedge fund Gold Arrow Capital Management who quit in 2011 to run a firm investing in silver miners. “Physical and in your own possession.”

SOURCE: https://www.miningweekly.com/article/silvers-brilliant-year-validates-longtime-bugs-enthusiasm-2020-09-07

Affinity is focused on the acquisition, exploration and development of strategic metal deposits within North America. In addition to the West Timmins Gold project, Affinity is advancing the Regal Project in the northern end of the prolific Kootenay Arch. Regal hosts two major geophysical anomalies as well as three past producing mines. Recent drill results included a new silver discovery with an 11.10 meter interval of 143.29 g/t silver which included a 0.55 meter interval of 2,612.0 g/t silver Click Here For More Info

• The gold-silver ratio indicates how many ounces of silver are required to buy one ounce of gold. In time periods where the ratio is relatively high, it acts as a leading indicator for a rise in silver’s value

As technical indicators go, the ratio of gold price to silver prices, commonly referred to as the gold-silver ratio, is considered by precious metal traders to be one of the most reliable indicators for forward price movements in silver.

The gold-silver ratio indicates how many ounces of silver are required to buy one ounce of gold. In time periods where the ratio is relatively high, it acts as a leading indicator for a rise in silver’s value.

Previously the highest the ratio has ever been was 132 to 1 in 1933, when the US government invoked Executive Order 6102 and forced US citizens to sell all but a small portion of their gold and silver holdings to the Federal Reserve.

In more recently the highest the ratio has reached id 97.3 to 1 in February 1991 (Figure 1), at the height of a global economic recession. After this high in the ratio, the silver price rose in a continued uptrend from an average price of US$3.74/oz in February 1991 to US$6.84/oz in February 1998, an increase of 83%.

Figure 1: Gold-Silver Ratio since 1990

Source: Mining and Metals Research Corporation Ltd.

In June 2003, after a sustained five-year period of lower gold-silver ratios, the gold-silver ratio reached a high of 78.7:1, over the next five years the silver price rose from US$4.53/oz to a high of US$19.32/oz in March 2008, (Figure 1) an increase of 326%.

A spike in the gold-silver ratio in December 2008 to 79.3:1, associated with another global recession, was a leading indicator of a 315% increase in the silver price from US$10.29/oz in December 2008 to US$42.7 in April 2011 (Figure 1).

The gold-silver ratio has now risen from a low of 34.7:1 in April 2011, its lowest level since 1979, to its highest level in 87 years of 111.7:1 in April 2020, before reducing to 90.6:1 in July on the back of a 35% rise in the silver price over just three months (Figure 1).

Could we now be facing a sustained uptrend in the silver price?

Historical precedent appears to suggests so, only once in history was silver more undervalued compared to gold than it was in April 2020 and that was in 1933 when the US Government forced its citizens to sell their precious metal holdings.

Source: https://www.proactiveinvestors.co.uk/companies/news/926237/gold-silver-ratio-reaches-its-highest-level-in-87-years-from-its-lowest-level-in-41-years-926237.html