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Keith Neumeyer: The Pricing System for Gold and Silver is Broken

Tom welcomes back Keith Neumeyer, President & CEO of First Majestic Silver Corp. Keith explains why the world needs enormous amounts of metals for electrification and carbon objectives. He says, “We will never be fully off oil and gas but we can reduce it given time.” He is a fan of hydrogen and nuclear solutions for energy.

The mining industry continues to be held back and demonized. Mining methods are gradually improving. It takes time however to implement and build solutions in a capital-starved market. The creation of new mines takes years and sometimes decades. Tech companies are too focused on the short-term and don’t understand the complexity of resource development. The top five high tech companies have a market cap of five trillion. While the top fifty mining companies are worth a fraction of that industry.

There are no real substitutes for silver. Companies like Dupont have tried with limited success. By 2022 the world will need 140 million ounces of silver just for solar panels. This is a 30-40 percent YOY increase.

Keith discusses silver recycling and why supplies of similar seem limited. It will require considerably higher prices to recover silver and bring these metals to refiners and recyclers. The recycling business is quite difficult and metals are hard to recover from e-waste.

He is concerned about the pricing structures around metal and believes the Comex needs to go away. First Majestic’s approach is to sell bars directly to industry and thus often bypass the futures market.

The mining sector has been undereducated for some time and Latin America is now filling in the gap for talent in engineering and mining.

The mining sector is having a harder time as the population moves to greener and increasingly socialist mindsets. The mining sector will have to be more aggressive if humanity is going to achieve its objectives.

Time Stamp References:
0:00 – Introduction
0:33 – Germany Presentation
2:12 – Tech Sector & Mining
5:07 – A.I. & Corporations
6:52 – Silver Substitutes
10:27 – Silver Recycling
13:10 – Metal Pricing Concerns
14:47 – Futures Replacements
16:33 – First Majestic Bars
20:44 – Withholding Silver
22:50 – Industry & Education
25:02 – Mainstream Momentum
26:34 – Exploration & Price
29:37 – Institutions & Gold
32:25 – Risk & Diversification
34:57 – Finding Opportunities
36:35 – Chile & Mexico
37:33 – Jerrit Canyon Plans
40:07 – Nevada Plays
41:58 – Company Considerations
43:58 – Exiting Positions
47:28 – Layering Positions
48:35 – Concluding Thoughts
49:30 – Wrap Up

Talking Points From This Episode

  • The coming demand picture for metals due to electrification and green energy.
  • Recycling and the limited alternatives to silver.
  • Types of silver bars and selling directly to industry.
  • Managing jurisdictional risks and future projects.

Guest Links:

Keith Neumeyer is President & CEO of First Majestic Silver Corp. Mr. Neumeyer has worked in the investment community since 1984. He began his career at some Canadian national brokerage firms. Mr. Neumeyer moved on to work with several publically traded companies in the resource and high technology sectors. Mr. Neumeyer has been the President and Chief Executive Officer of First Silver Reserve Inc. since June 19, 2006. His roles have included senior management positions and directorships responsible for finance, business development, strategic planning, and corporate restructuring.

Mr. Neumeyer was the original and founding President of First Quantum Minerals Ltd. (T-FM) and First Majestic Silver in 2002 and First Mining Finance in 2015. He has also listed several companies on the Toronto Stock Exchange and has extensive experience dealing with the financial, regulatory, legal, and accounting issues relevant to the investment community. Keith also won the E&Y Entrepreneur of the Year Award in 2011 for the Metals & Mining category.

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