We believe that silver is a precious metal as well as an industrial one and at the moment is one of the cheapest in the market place. Silver also has many uses, not just decorative as in jewellery but also industrial uses such as photography, which account for approximately 95% of the annual silver consumption. Silver is top of league in terms of conductivity of light and electricity. It is easy to work with and can be shaped to almost any requirement. Silver is highly resistant to corrosion and requires little in the way of maintenance.

The balance of supply and demand is now affecting the price and silver fabrication has grown rapidly while mine output has not. To meet demand suppliers have had to run down their stockpiles. However this solution has only a limited time scale before it becomes depleted thus limiting the supply and forcing prices up. The constant devaluation of currencies worldwide adds to silvers value as a store of wealth and a hedge against inflation similar to its big brother, gold. Many of the arguments related to gold also apply to silver and as gold continues on its own upward path so will silver and it may outperform gold before this Bull Run draws to a close.

Geographically the top five producing countries according to the Institute of Silver are: Peru, Mexico, Australia, China and Chile. The geographic location will be a consideration when we are looking for mining stocks to invest our hard earned cash. The political stability of each country and their government’s acceptance of foreign investment is an important factor. The South American ‘swing’ towards a socialist way of thinking needs to be monitored on a regular basis. It would not be the first time that a government would use the nationalisation of an industry to take the spotlight off its own ineptitude.

Our intention is to review various silver mining companies and post articles of the stocks that we are buying.
You are invited to comment on these investment decisions as you think fit. It may be that your own research has uncovered a gem and our readers will then benefit from your input.
11 July 2006