SVL Share Price Goes Bang! – Silver Price Shooting Up

At time of writing the share price of Silver Mines Limited [ASX:SVL] is up 11.29%, trading at 6.9 cents.

As a pure play silver company, the SVL share price as you can see is highly correlated with the silver price. You can see the two paired up on the chart below:

silver mines svl share price

Source: tradingview.com

Today we look at Silver Mines’ recent reply to an ASX price query and the relationship between gold and silver.

Nothing shady about SVL share price increase

The ASX sent a price query letter to SVL yesterday which said:

We note the change in the price of SVL’s securities from a low of $0.045 on 15 July 2019 to a high of $0.062 today, 18 July 2019. We also note the significant increase in the volume of SVL’s securities traded from 16 July 2019 to 18 July 2019.

It was a sharp increase but one which Silver Mines says can be explained by the recent movement in the silver price.

They note that, ‘The silver price has increased by approximately US$1.50 per ounce (10.3%) since 16 June 2019. Since 16 July 2019, the silver price has increased from approximately US$15.30 per ounce to a high of approximately US$16.32 per ounce (6.7%).

They continue their response to the price query by noting that their 100% owned Bowdens Silver Project in central NSW ‘is the largest known undeveloped silver project in Australia and one of the largest globally.

The gold/silver ratio since 2000 can be seen below (drawn from a May presentation):gold silver price ratio svl asx

Source: Silver Mines Limited

You can see what has been happening with the gold/silver ratio recently:gold and silver price movements

Source: goldprice.org

It has come down from as high as 93 with silver’s recent charge, but is still well above the long-term average.

With silver demand in the auto sector (EVs) and solar cells projected to increase, there could be something more sustained behind silver and Silver Mines’ recent rise.

Speaking of battery metals, our free nickel stocks report could be just what you are after. We look at the companies with exposure to the looming battery boom.

If gold is more your thing, our editor Greg Canavan gives you an insightful look at why physical ownership could be the preferred option in the current environment. That report can be downloaded here.

Regards,

Lachlann Tierney

For Money Morning


Lachlann Tierney is a writer for Money Morning and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. Recently he has been working with Ryan Dinse. Ryan is involved in three publications:


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