Silver Yearbook 2019 New York, NY 23 April 2019 Sponsors and - PowerPoint PPT Presentation

Silver Yearbook 2019 New York, NY 23 April 2019

Sponsors and Partners China Partner Sponsors Endeavour Silver Corp. Shanghai Huatong The Institute of Scrap Recycling Industries Silver Exchange Kitco Metals Inc. Metallic Minerals Corp. Monex Precious Metals Sabin Metal Group of Companies Silvercorp Metals Inc. 2

Silver Prices Silver Prices: 1 January 2010 to 22 April 2019 $ / Oz 52 48 44 40 36 32 28 24 20 16 12 8 10 11 12 13 14 15 16 17 18 19 3

Global Economic Outlook Real Gross Domestic Product Annual, Projected Through 2027 Percent Change Percent Change 10 10 World Emerging and Developing Economies 8 8 Advanced Economies 6 6 4 4 2 2 0 0 -2 -2 -4 -4 -6 -6 1980 1985 1990 1995 2000 2005 2010 2015 2020p 2025p

Silver Bullion Inventories Silver Bullion Inventories Year-end Data, through 2018 Mln Oz 3,500 Implied Unreported Stocks 3,000 Government Dealer 2,500 Exchange ETPs 2,000 1,500 1,000 500 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 5

London Silver OTC Trading Volumes London Silver OTC Trading Volumes Billion Ounces Percent 5.0 100% Total of All Transactions 4.5 90% Spot's Percent of Total 4.0 80% 3.5 70% 3.0 60% 2.5 50% 2.0 40% 1.5 30% 1.0 20% 0.5 10% 0.0 0% 19-Nov-18 24-Dec-18 28-Jan-19 4-Mar-19 8-Apr-19 6

Investment Demand 7

Silver Investment Demand Silver Market Balance Annual, Projected Through 2019. Prices through 2018. Million Ounces $/Ounce 45 250 Net Additions 40 200 35 150 30 100 25 50 20 0 15 -50 Net Withdrawals 10 -100 Nominal Price (LHS) 5 -150 Net Changes in Inventories 0 -200 60 65 70 75 80 85 90 95 00 05 10 15 8

Coins Continued To Dominate Silver Investment Demand Estimated Investment Demand by Major Investment Vehicle Mln Oz Mln Oz 250 250 Net Investment Demand 200 200 150 150 100 100 50 50 0 0 -50 -50 Other -100 -100 ETPs -150 -150 Coins -200 -200 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 9

Silver ETF Holding On Annual Changes to Silver ETP Holdings Monthly Silver ETP Holdings March 2019 March 2019 Mln Oz Mln Oz Mln Oz 180 180 800 160 160 700 140 140 600 120 120 100 100 500 ZKB 80 80 400 60 60 300 40 40 SLV 20 20 200 0 0 100 -20 -20 CEF -40 -40 0 06 07 08 09 10 11 12 13 14 15 16 17 18 19 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 10

Institutional Investors On Comex Turn Net Short Non-Commercial Gross Long and Short Silver Positions Comex Futures & Options. Weekly Data, Through 26 March 2019 Mln Ozs Mln Ozs 750 750 650 650 550 550 450 450 Net Fund Position in Comex Long 350 350 250 250 150 150 50 50 -50 -50 -150 -150 -250 -250 -350 -350 -450 -450 Short -550 -550 -650 -650 -750 -750 A-95 J-97 O-99 J-02 A-04 J-06 O-08 J-11 A-13 J-15 O-17 11

Silver Prices Have A Lot To Catch Up Monthly Gold/Silver Price Ratio March 2019 Ratio Ratio 120 120 100 100 80 80 60 60 40 40 20 20 0 0 72 76 80 84 88 92 96 00 04 08 12 16

Fabrication Demand 13

Fabrication Demand Rose For Sixth Consecutive Year Annual Fabrication Demand Projected Through 2019 Million Ounces Million Ounces 1,000 1,000 Photovoltaic Imports into Trans Economies 900 900 Other Countries Other Uses 800 800 Biocides Superconductors 700 700 Electronics Jewelry & Silverware 600 600 Photography 500 500 400 400 300 300 200 200 100 100 0 0 77 80 83 86 89 92 95 98 01 04 07 10 13 16 19p 14

Reaching New Records, But At A Slower Pace Annual Silver Demand for Photovoltaic Solar Panels Projected Through 2019 Mln Oz Mln Oz 100 100 80 80 60 60 40 40 20 20 0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19p 15

Jewelry & Silverware Demand At Elevated Levels Global Jewelry and Silverware Demand Million Oz. $/Oz. 350 40 Silver Prices (RHS) 35 300 30 250 25 200 20 150 15 100 10 50 5 0 0 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18p 16

Electronics Demand Continues To March Higher Annual Total Electronics Demand Projected Through 2019 Million Ounces 300 250 200 150 100 50 0 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19p 17

Supply

Total Silver Supply Continues To Decline Total Annual Silver Supply Projected Through 2019 Million Ounces Million Ounces 1,100 1,100 1,000 1,000 Net Exports from Tran. Econ. 900 900 Government Disposals 800 800 700 700 Secondary 600 600 500 500 400 400 300 300 200 200 Mine Production 100 100 0 0 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 19

New Mine Capacity In Declining Trend Annual Additions to Silver Mine Capacity from Near-Term Mine Development Projects Million Ounces 40 35 30 25 20 15 10 5 0 2013 2014 2015 2016 2017 2018 2019p 20

Most Producers Reduced Costs In 2018 Primary Silver Producers' Cash Costs in 2018 Cash Cost per Ounce Cash Cost per Ounce 50 50 45 45 Average Silver Price in 2018: $15.71 40 40 Average Silver Price in 2017: $17.09 35 35 30 30 Production Weighted 2018 Cash Cost: $5.47 25 25 Production Weighted 2017 Cash Cost : $5.90 20 20 15 15 10 10 2017 5 5 0 0 -5 -5 -10 -10 -15 -15 2018 -20 -20 -25 -25 -30 -30 -35 -35 -40 -40 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 21

Production-Weighted Costs Lowest Since 2009 Annual Average Primary Producers' Silver Cash Costs and Prices $/Ounce $/Ounce $40 $40 $35 $35 $30 $30 $25 $25 Annual Average Silver Price $20 $20 $15 $15 $10 $10 $5 $5 Average Cash Cost $0 $0 2001 2003 2005 2007 2009 2011 2013 2015 2017 22

Average Costs Declined Slower Than Average Prices Squeezing Margins Margin Between The Price of Silver and Average Cash Operating Costs of Production $/Ounce $/Ounce 30 30 25 25 20 20 15 15 10 10 5 5 0 0 2001 2003 2005 2007 2009 2011 2013 2015 2017 23

One Final Point

1990s All Over Again? Probably Not. Silver Market Balance Annual, Projected Through 2019. Prices through 2018. Million Ounces $/Ounce Similar Trend In Investment Demand 45 250 Net Additions 40 200 35 150 30 100 25 50 20 0 15 -50 Net Withdrawals 10 -100 Nominal Price (LHS) 5 -150 Net Changes in Inventories 0 -200 60 65 70 75 80 85 90 95 00 05 10 15 25

CPM Group Precious Metals Yearbooks Launch Dates: 2019 Platinum Group Metals Yearbook 9 July @ New York For general inquiries, email info@cpmgroup.com 26