Over 20 years ago, the famous investor Thomas Kaplan made his first significant fortune in silver. He acquired options and turned the investment into one of the largest zinc-silver mines globally.
In an exclusive interview, the CEO of The Electrum Group announced that he is now back in silver after he went public with a new silver mine in Mexico. In November, Kaplan’s commodity investment fund floated an IPO and went public with Gatos Silver (NYSE: GATO, TSX: GATO) and its producing Cerro Los Gatos Mine in Northern Mexico. Kaplan stated:
“I never really left silver. I just left the public domain. Coming back to silver just essentially means that we are, as it were, coming forward with assets that we have been nurturing for years.”
Acquisitions And Developments
Kaplan confirmed that Gatos Silver raised $170 million in its IPO and it became one of the first precious metals firms to get listed directly on the New York Stock Exchange. The investor has a second venture which is the firm that is setting up the historic Sunshine Mine in Idaho. The mine has produced over 360 million ounces of silver in 100 years.
Since acquiring the mine in bankruptcy ten years ago, the Electrum Group has managed to increase the mine’s resources from about 30 million to almost 200 million inferred resources. Kaplan commented:
“When we acquired it out of bankruptcy over a decade ago, the general zeitgeists was that it was burnt out. We think we have just scratched the surface. I have no doubt that this mine will produce silver again.”
The billionaire investor announced that his long term plan is to take the Sunshine Mine public. But, he is not in a hurry to do that:
“When you have a great project time is always on your side and we have a great project.”
The Bulls Still Rule
Reviewing the silver markets, he remains bullish on the precious metal. He stated:
“I always say that silver is gold on steroids and I’m wildly bullish on gold.”
Not only is he convinced that silver will surge back to its record highs above $50 per ounce, he said that there is no viable reason why the metal cannot surge to surpass $100 per ounce. If gold continues to rally, silver will follow and head higher in the coming months. He added:
“Once silver stabilizes and gold is going up as some monetary metals, silver then starts to follow gold and then it gets octane and it surpasses gold. That’s what happened during the financial crisis and we are starting to see that again.”
Silver is benefiting as a monetary metal since central banks throughout the world continue to pump massive liquidity into the financial markets. Interestingly, silver will also benefit as an industrial metal with the global economy recovering from the COVID-19 pandemic.
Gold was already in a bull market before the world was hit by the pandemic. Kaplan said that the precious metals market led by gold will remain in a bull market after the virus is dealt with.
“All the pandemic has served to do is to make people now understand that the question of money and what is money when clearly it can be printed at will. The debasement of currencies is obviously very, very bullish for gold.”
Fundamentals support Kaplan’s theory but are they strong enough to push silver towards $100 and higher?