do you think triple digit silver is inevitable absolutely absolutely mike i do think it's inevitable i i hope it lasts hi i've got keith neumeier from first majestic silver with me how are you doing keith great mike it's uh great having a chance to speak with you i think this is our first time ever speaking together yeah we may have run into each other at silver summit uh or uh one of the conferences like that in the past you know just walking through the convention hall uh but um uh you know we have


sort of crossed paths but never really stopped and had a discussion and you have been in this actually a little bit longer than i have been in it uh you started first majestic silver in 2002. uh i started investing in pr and gold in 2002 but i really didn't discover silver until uh april of 2003 so um this video i want to sort of wrap this around triple digit silver because i've been saying this for well over a decade i think i may have uh talked about the potential of triple digit silver when i wrote my book


um i know that i got laughed at once uh years ago i was being interviewed on financial sense uh jim papava and i talked about the gold silver ratio and i talked about the potential in a rush if there is monetary demand and people are panicked if gold goes too high they switch people switch their preference to silver and in that type of scenario which is what happened in 1980 the potential uh for the gold silver ratio to go to something like a factor of 10 is actually there that potential exists


it's it's you know we had 14 back in 1980 and things are much more out of whack this time around than they were that time uh as far as supply demand fundamentals gold silver ratio tell us about the minable supplies you know a lot about what's in the ground and what's available and right now the gold silver ratio is in the high 70s i believe yeah well look when i put the company together there was a handful of companies out there that could actually call themselves silver companies so


what i mean by that is 50 of their revenue is from silver and today and then the obvious ones uh we know them all hekla coeur d'alene pan-american and there's a variety of others they all had revenue uh north of 50 now today you know they're all far below 50 all all three of those companies and then and a handful of others have all become gold companies um you know we we could become a gold company tomorrow there's a lot of gold mines for sale um there's handfuls of gold mines for


sale um gold mines seem to be pretty easy to find when it when compared to silver mines there are no silver mines for sale silver mines are very very hard to find and they're they generally don't have very long mine lights so they have uh and uh the the metallurgy of silver is also more complex so it's quite easy to extract gold from a piece of rock it's very more very much more difficult to do that with silver it's costly um and and takes much much more time so you've got all these


things against silver that that to me makes the current pricing you know just unbelievably you know i can't understand why and and i look at the mining ratio of 801 today and you know even the scientists think that there's 15 or 16 ounces of silver in the earth's crust compared to gold um 16 to one and we're mining eight to one and when i put the business together 18 years ago we're mining somewhere around 11 or 12 to one so in the last 18 years that ratio has actually dropped


and there's more silver mines to come offline during that period of time than have been added yeah i think uh usgs says that there's about 17 times more silver in the earth's crust but the mineable supplies have been dropping somebody told me years ago and i i want to ask if you can confirm this fact or not if it's a fact uh that silver tends to occur geologically closer to the surface and gold tends to be deeper so uh over over the couple of millennia that we have been mining gold and silver uh more silver


has been mined out and that's the reason that these ratios are dropping that they're that you know we used to mine about 15 to 1 and that was what the average gold silver ratio was it was just the free market doing price discovery of the of the two currencies that were in circulation gold and silver uh and that ratio uh now we're up at a 78 to uh silver's price is 178 of of gold's price today uh yet the what's coming out of the ground you're saying is is uh there's one


ounce of gold for every eight ounces of silver not every 78 ounces of silver right that's dead on and uh you know you translate that to the current gold price and then do the math and you come to north of 100 an ounce and i think it's very likely you know and unlikely even overshoot you know like many markets do you know we we saw the ratio overshoot 230 to one in march which made no sense in itself he had a mass liquidation of silver at that time where silver dropped you know to twelve dollars


and then uh and that then you know who would have thought we would have 125 to 1 ratio uh it happened for a week or so um and who would think that we could go to par you know people like ted butler think that uh ultimately we're going to go to one to one now i'm not in that camp but um there are people out there you know i talked to eric sprott you know a fairly regular basis you know his target's 500 silver um yeah that was the price that i met i talked about 5 000 gold which i believe will


absolutely happen and i talked about ten to one ratio on that right uh financial sense.com thing where i sort of got laughed at because i think that was back in 2000 uh six or seven or 2008 and then just a few years ago i was on a panel with jeff christian of cpm group and i was talking about triple digit silver and he said that uh 100 silver was cocaine induced uh fantasies or something like that in terms of your question when will silver hit three digits or fifty dollars i mean i you know well fifty dollars is


credible uh a hundred dollars is is coke induced nonsense let's be honest uh i said earlier that i wasn't raised calvinist i was raised catholic and we have a saying in the catholic church i can tell you when silver will hit three digits sometime after the first female pope do you think it's inevitable do you think triple digits is inevitable absolutely absolutely mike i do think it's inevitable i i hope it lasts um you know there's a couple critical things happening in the world right now


that is going to push the price and then of course you know people are wondering is it going to be investment demand i think it's just going to be industrial demand for the needs of the human race you know when you have a metal that's dropping in production four years in a row now we don't know what the 2020 number is but it's going to be south of 800 million ounces and it hasn't been below that 800 million ounce number for five years consumption still a billion ounces and going up


uh you know by two or three or four five five percent a year and we want to go green we want to get rid of um uh you know oil and gas we want to electrify the planet in new ways we uh you know i was told by our traders in new york that there's a huge amount of demand coming from refrigerations uh for freezers because in the united states a lot of people are buying freezers because of the covid and they're concerned about meat supplies so they're buying freezers and filling their freezers with meat


and that's creating this huge strain on silver supplies i wouldn't have thought of freezers i know freezers do have some silver in it but you know when it comes to televisions and you know uh cell phones and electric cars and solar panels you know the the world's going solar panel the world's not going nuclear you know you could argue about what's better i think you and i would be on the same page of choosing what's better but what makes more sense politically is solar panels


it's easier for a government to build a solar fountain solar panel farm that is to build a nuclear plant by your you know next door so the world is going to use silver and we're running out of silver um we can't recycle it the recycling of silver is at historic lows last year the 2019 number we recycle about 125 million ounces of silver which is slightly more than 10 percent of the the the supply 90 of all the silver that's being used in commercial uses is being thrown into waste dumps


not to be recycled to recycle silver from a cell phone is almost impossible i know of three bankruptcies here in canada of companies that are attempted to recycle metal from computers and cell phones but the computer companies are so good at embedding these metals into the circuit boards it costs a fortune to get them out and we need you know as you said 5 000 gold you know a couple hundred dollar silver just to get these metals recycled so recycling is not going to improve the supply demand fundamentals for silver


anytime in the next couple of decades as far as i'm concerned and we're likely 50 years from now to have to start going to waste dumps and mining old televisions and old washes and dryers and then you know electronics just to supply the demands that is necessary to feed the human race of all the silver it's going to need to survive and what price will that take right you know that's interesting that you said that um back in the 70s i used to go and see this man named buckminster fuller have


you ever heard of him okay well he's pretty famous uh he he uh designed the geodesic dome and several other things but he used to give these talks and he was saying back then that uh the future uh the most richest minds that there's going to be in the future are going to be all of the dumps from today and uh so uh you're you're probably right that that's where we're going to be getting some of our silver supply from as all of the landfills that exist uh what's happening with the talent


that's out there you know one of the things that i recall is uh going to all of these conferences and so on all of the geologists the hard rock geologists were already in their 50s or 60s 10 years 10 15 years ago and uh there would there's been a tremendous lack of uh new talent because there's no schools that teach it with the tech the tech bubble and everything that we've had uh uh there's been a disinterest in uh learning these things it most people don't even consider it for a career path


anymore yeah i'm glad you brought that up because it's something we're very proud of back in 2014 we started to lose money um you know after a couple of pretty good years of strong strong cash flows but um in june of 2020 silver broke down to 16 bucks an ounce after being you know at 40 or 50 dollars in the previous couple years and and uh we were our our average recovery globally meaning the amount of metal amount of silver and gold that we're extracting from rock that we're


removing from the underground mines we were getting just north of 60 percent so about 40 percent of the metal 35 to 40 percent of the metal was going into waste and that's a lot of metal that's just going into waste the mills weren't they didn't have the technology they didn't have the capabilities of extracting more metal from the rock so i decided to hire the entire graduating class from the university of durango there's 25 young kids that we hired these are electrical engineers chemical


engineers you name it they're all engineers guys and girls all the ages of 24 25 and we let them lose on the business and they came in you know amazed with how poorly some of the processes that were there historically over decades and decades and decades that they could solve very easily with very little money a lot of it was just common sense some of it took capital but over the next six years we're now about six years ago every year we've hired the same graduating class or at least most of them we now have a


joint venture with a second university the university of guanajuato which is a famous mining university in mexico who who has good geologists coming out of there so we've been filling our talent pool with all these young individuals over this period of time because our focus is transferring the the brain wealth and the knowledge from all the 60 and 70 year olds to this whole new group of people these young kids have grown up with iphones and ipads and they're making change our average recoveries today are 90


percent so that's a big 30 60 percent or low 60s to a 90 that's a big number and and our our technical teams think that we can get up to 95 total recoveries within the next two years by continually pushing on using new technology and by doing that you become cleaner as well you have a less environmental footprint you have less waste you use less power less energy less less diesel um you recently held back some some of your production because of the low prices that happened in march can you tell us about that why and then


what you think about uh all of the chicanery on the commodities exchanges yeah um you know look i i guess it comes back to my trading blood you know back in the 80s you know and then uh when i see complete disconnects in the marketplace you know i try to take advantage of them and then i've done it before on with first majestics production and this time around in march you know we i witnessed the the our retail sales start to go through the roof and our premiums started to skyrocket because we couldn't


sell i didn't want to sell all the inventory just to a couple of users and we started ramping up our margins to match some of the other competitors out there what they were doing and but the price kept dropping so i knew that there was a complete disconnect between the paper markets and the physical markets so i suspended all sales the lowest we sold silver for was 1750 and seven and then silver dropped all the way down to i think below thirteen dollars there for a day or so so that that decision alone


saved the company millions of dollars um i estimate probably five or six million dollars because it wasn't until late june that i started to liquidate that position i also went long into the futures market i actually bought a million ounces in the futures market and uh made a couple million dollars there uh trying to take advantage of the banks because you know if they're going to be that stupid and manipulating the markets like that you know you know why not try to take advantage of it but i sure wasn't going to give


them the physical metal because i knew they needed it and i wasn't going to be one of those mining companies that supplied it i wish and i challenged other miners to do the same but um i tend to i guess be ignored sometimes by some of the other mining executives um recently the comex has uh added a whole but the the lbma i'm sorry there's been a whole bunch of new hallmarks of bars that have been approved