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A: I attended the annual Silver Institute dinner in New York last week. The featured speaker was the precious metals analyst for GFMS, the bullion research group. He reviewed the fundamental supply and demand for silver both in 2017 and looking forward. We learned that total supply this year is flat and mine supply is lower while jewelry and industrial demand are both up. Investment demand was up in the ETFs but down sharply for coin and bar demand, leading to a small physical surplus and a flat silver price this year.

Looking forward, silver supply is forecast to decline for several years given that silver is primarily a byproduct of copper, lead, zinc and gold mines, and during the recent 5 year bear market for all metals, very few new copper, lead, zinc and gold mines got built. Silver demand is forecast to continue rising, driven by electronics and solar photovoltaic cells which are the fastest growing aspect of industrial demand, but also electric vehicles which could soon overtake solar!

So it appears we are headed back into a bull market for silver next year. The GFMS forecast average silver price for 2018 is up 10% to US$18.80 per oz. We note that Canadian mining analysts such as BMO and TD also raised their silver price forecasts to around US$19 per oz next year. If these forecasts are accurate, Endeavour could see a significant jump in both cash flow and net earnings in 2018.

Click here to view the GFMS Silver Survey Update.