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Outlook on Silver and Silver Stocks with Robert A. Quartermain of Silver Standard Resources
Robert A. Quartermain has been the President and a director of Silver Standard Resources (SSO:TSX, SSRI: Nasdaq) since 1985 (when its market capitalization was only C$1.5 million), and is responsible for strategic planning, acquisitions, and the raising of capital to fund operations. From 1976 to 1982, he worked for the Geological Survey of Canada and in private industry on mapping and exploration programs. Mr. Quartermain also worked for Teck Corp. before becoming president of Silver Standard Resources Inc. in 1985. Since 1985, Mr. Quartermain has been involved as a director and/or officer of a number of public resource companies including currently Vista Gold Corp. and Canplats Resources Corp. He is also President of The Silver Institute. Mr. Quartermain graduated in 1977 from the University of New Brunswick with a Bachelor of Science degree in geology, and from Queen's University in 1981 with a Master of Science degree in mineral exploration.
What is your outlook on silver?
In regards to my outlook on silver I think it continues to remain good. Key drivers in the silver market are its uses in electrical and industrial applications. For the first time ever last year, more than 50% of silver consumption on a global basis was in electronics and industrial applications which meant that there was less consumption in its more conventional uses such as silverware, jewellery and photography. One of the driving forces of that is the use of silver as a catalyst and as a result of having this quality, it is used in the oil & gas industry, it is used to produce plastics and also in many high temperature applications. As well, if you apply a current to silver it doesn't spar k and as a result of this it is used in a lot of small electrical connections such as those used in palm pilots and things of that nature where the solder incorporates silver. As a matter of fact in July of 2007, the European Union banned the use of lead in solders and some of the potential replacement that's being used (that we are seeing from anecdotal information) would be silver in solders. Solders of course are used in light switches that you use in homes and so we are starting to see a bit of an uptake in silver demand in those applications. Silver is also used in photovoltaic cells, in solar panels and a wide variety of everyday uses such as cell phones and computers. So I think that as we see the growing economies in both China and India and the movement there towards consumer goods, particularly cell phones and other communication devices then we should continue to see consumption growth in electrical and consumer applications of silver so the outlook for the commodity remains bullish.
What is you outlook for silver stocks?
Regarding silver stocks, they are somewhat dependant on the market. Till date the price of silver has gone from $5/oz level 3 to 4 years ago to its current $13/oz level.
Stocks which are focused on silver such as ours and our peer group have enjoyed an increasing share price because of the leverage we have to the commodity from our project base. Investors should also keep in mind that market fluctuations may sometimes override movements in the stock relative to silver price. We are currently coming into the season where physical demand picks up particularly in India due to their wedding as well as religious festival that occur in the fall and this often results in increased seasonal consumption of silver. India in the past has been a fairly large consumer of silver both from a jewellery point of view as well as an in investment.
Later in October there is a conference organized by the silver institute in China which I'll be attending and one thing t hat the conference focuses on is Chinese consumption of silver. Over the last few years the amount of consumption of silver jewellery in China hasn't been comparable to that of India, so if we start to see that kind of consumption pick up in China, it will result in an incremental increase in demand and that will certainly be reflected in price of the commodity and then onto silver share prices.
If you could look into the future 5 years from now, where do you see Silver Standard Resources?
If I could look into the future 5 years from now we probably wouldn't be having this conversation.
Thank you Mr. Quartermain!
For more information, please contact:
Arjun Rudra
Email:arudra17@yahoo.ca
Web site:http://please-dont-take-me-seriously.blogspot.com/
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