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Quote below from saigonsally post. Just to say Portfolio, great post. It helped me to better understand it also. Thanks for the question saigonsally. I didn't even know I needed to know the answer
"Overall, silver demand exceeded silver supply in 2023 for the third consecutive year, resulting in a structural market deficit of 184.3 Moz."
Can someone explain to a thicky how this is possible.
Glad I sold yday!
Will wait for re-entry 500p?
Not as bad as HoC but similar to Centamin on Q1 performance. 2-3% drop possible.
Production down compared to previous quarters but outlook unchanged for current fiscal? With metal prices high and production down wonder what happens to SP! wild swings last 2 days, not for faint hearts!
Agreed. I managed to build up to 1k shares at a break-even of £5.43. Was sitting on a 16% loss at one point. But used it as an opportunity to top up and reduce the break-even point. Could have topped up more but I was already overweight here. Personally I don't want PMs to be more than 10% of my portfolio.
This has been savagely marked down to below 500p as can do when firms are burning through cash although this wasn't really 'burning' through cash as such. With the metal prices around these levels, Fres will be looking at $500m more in revenue which will almost entirely be booked to profit as there are no further costs associated with those revenue. This means a 200-300% profit uplift!
This will need to be massively rerated once the current metal prices becomes more established. The big rises of the past could well return to reward the patient and clever investors who averaged down and traded this along the way.
Fres seems to be behaving like the other miners now rather than being singled out for a beating. That's good news for the share price. Still overweight here. Will dump some at around £8.
*half a billion
Damn auto correct
A period of consolidation for metals definitely looks on the cards now but the average silver equivalent price is all that matters... Higher for longer is also definitely on the cards.
YTD average silver price $24 or have a billion EBITDA on an assumed equivalent cost of $19 an ounce. FRES has started a cash build cycle
Eventually I see much more than 750p here, but that topping tail (especially for silver) looks like it is playing out now, so not buying PM miners at the time of print.
Not selling any either, because I have no need to - but fully expecting some paper loss increases in this one for now.
Https://www.zerohedge.com/markets/when-will-yen-carry-trade-end
Thank you PP.
SS
@Saigonsally
There is supply and demand.
But in the metals market, there is also production & Inventory
Inventory is also broken down further into the inventory that the miners have to supply to market and inventory held by the market.
When inventory levels are running in continual net deficeit YoY eventually they reach the stage where demand is unable to be met from inventory held by the market and there will be a supply shortage and prices will rise.
For example....
in a major supply shortage, metal prices would have to continue to keep on rising until sufficient deposits that were once uneconomical to mine at the prevailing spot price eventually become economical to mine at whatever that price may be to bring these into production.
In the commodity space the price swings can be dramtic as we have seen recently with Uranium (400%+ rise in spot prices) where it became obvious that the price was going to have to rise considerably for miners to continue to make a profit and meet both present and future demand expectations.
From the Silver Institute report:
"Overall, silver demand exceeded silver supply in 2023 for the third consecutive year, resulting in a structural market deficit of 184.3 Moz."
Can someone explain to a thicky how this is possible. In A level economics I was taught demand always equals supply (as in demand is what is actually bought rather than some fantasy notion of what I wish I had)
"Very unusual for a FTSE100 stock to be up after ex-dividend."
All depends on the market at the time of the ex div
let´s face it .....3p out of 600+ is of little significance
PM prices are more important than a paltry dividend that is taxed 10% in Mexico.
Good resistance stopping this going below £6. Very unusual for a FTSE100 stock to be up after ex-dividend. Happy to hold on to this. May sell some when it gets to £8 as overweight. Don't agree with Simply Wall Street, which looks at one piece of data, current P/E, to decide it is over priced.
https://simplywall.st/stocks/gb/materials/lse-fres/fresnillo-shares/news/subdued-growth-no-barrier-to-fresnillo-plc-lonfres-with-shar
Gold and Silver still on Bull run upwards. Should see 615/620 tomorrow.
With regards the dividend , I doubt the market gives a fig about some 3p Dividend
Few things to remember -
Silver price at multi year high but SP not reflecting that
Low free float so any drop is buy panicked investors and is a buying opportunity considering silver price
China's industrial growth picking up so that should help push PM prices
US interest rates predicted to be staying high for next 6months so gold will move up and FRES produced gold too
Silver Supply low but demand is high with net zero being the goal so silver price to go high
SP is not reflecting any of the above!
Hi DK, yes that was my point as it dumped more than the divi (c3p) at the open, as is common with FTSE names.
Hi fog it has gone ex divi today so I guess the small drop is for today rather than tomorrow? Bonkers and others know more about this I. Cheers DK
"Is this expected to drop tomorrow when it goes ex divi ?"
As is tradition, and in true FTSE 100 tradition it always falls more than the divi.
"Silver Institute: "#Silver Demand for Photovoltaics Increased 64 Percent, Surpassing Estimates."
Forecast 2024 solar demand: 232Moz, nearly tripling in last 3 years."