 China's Secret Silver Solution
A Special Report
David Morgan
The
Silver Investor
Nov 19, 2004
Under pressure from China's
compressed industrial revolution - and millions of buyers who
see it as a store of wealth - silver prices will spike
much higher than most people can believe. Ironically,
the solution to this precious-metals crisis appears to lie in
China's own back yard.
Introduction
PLEASE
NOTE: China
is wrapping its heretofore-inefficient mines in private market
incentives because it must produce at elevated rates to feed
the beast, its powerfully compressed industrial revolution. Disciplined
and ongoing privatization policies have already elevated China
from 5th to 4th among all silver producing nations; additionally
the jump in production is significant, boosting China's production
by almost 2 million ounces from 2002 to 2003. According to certain,
top-secret information that has just come to my attention, certain
of China's younger and better producing mines - the ones that
contributed the most to China's elevated silver production -
are seen to be surrounded by other hugely promising silver strikes.
If so, these would constitute what would certainly be among the
most compelling investment opportunity I've ever had the privilege
to point out to my readers.
I have been criticized by some readers for not providing enough
investment ideas and have often responded by pointing out that
in the silver markets, unlike gold, there is a very small universe
of companies to choose from - and only a few regions of the world
that offer meaningful opportunity for silver exploration
and development. Lacking a broad universe of producers and a
wide array of properties, I am often reluctant to offer up "new
ideas" - worried they may not meet my standards, or those
of serious precious metals investors.
Today, probably for the first time since I've been writing about
the evolving silver boom of the 2000s, I can suggest a new investment
idea to readers with tremendous excitement and full confidence:
China.
China is open for business. China's leaders know they have to
make changes or risk losing the silver they need to support the
country's powerful but compressed industrial revolution. They're
privatizing silver mines and looking for operational partners.
In this special Silver Investor report, I intend to act as your
guide on a journey through a modern industrial giant - one that
will explain why China's silver-mining privatization offers one
of the most compelling investment opportunities I can ever remember
introducing to my subscribers.
China Is Privatizing
PLEASE
NOTE: I
am informed that strikes around the mine I am scheduled to visit
show similar chemical makeup and geological patterns. If this
is indeed the case, then estimates of the expanded site hold
potential as good as any North or South American mine. How much
could be pulled out of such a mine? Potentially, hundreds of
millions of ounces?
I am writing this report before leaving the beautiful environs
of my Washington state home on Sunday November 21st for a by-invitation-only
trip to Beijing along with many other mining industry professionals
to attend various high-level meetings with senior government
officials and mining bureau representatives. (Please do not email
me asking for names due to the sensitive nature of the trip and
to avoid compromising the security of those who are traveling
with us).
I am extremely pleased to be in the company of such fine, upstanding
people- many of whom like me have sacrificed much personally
to cultivate necessary and important relationships while solidifying
the promise of China's silver mining industry. Upon returning
expect another special report indicating pertinent details of
this trip.
Silver - my China trip is all about silver. We'll leave
Beijing and travel north to where many of China's richest and
largest silver discoveries are contained within wider regions
that may partake of a similar geology - and where additional
exploration by local Chinese companies may have confirmed the
presence of continuous ore bodies. If geological patterns are
to be believed, I am told we may bear initial witness to one
or more of the very largest silver/lead/zinc systems in the world.
Why should I hide my enthusiasm? I wrote in a recent report that
new China silver-mining initiatives could spawn a silver stampede
similar to what we witnessed in the gold industry in the 1900s
in America. And I have also stated that we are on the cusp of
a kind of explosive realignment in the price of gold - but one
in which silver's price adjustment will feel more like a "nuclear
explosion."
Now I'd like to take this opportunity to state - once and for
all - that it is silver, NOT GOLD, that offers the better precious
metals opportunities in the 21st century!
News reports, for instance, have told of silver purchases by
Bill Gates, George Soros and Warren Buffett. These three billionaires
- usually on the winning side of important investments - are
said to be heavily weighted in silver, thus contributing an unintentional
but implicit endorsement of an unfolding Silver Stampede.
I have been among the very few voices shouting about silver's
potential for more than five years now. My readers - the ones
that acted - have been the beneficiaries of a recent near-doubling
of silver prices - but believe me, that is nothing compared to
what is to take place over the next few years.
PART
ONE
Silver History & Overview
PLEASE
NOTE: While
not as expensive as gold, silver has ignited plenty of passion
through the ages. Perhaps the most well known American defender
of silver is the politician William Jennings Bryant from Kansas
who fought against the New York banker's de-monitization of silver
in the late 1880s and roared that he "would not be crucified
on a cross of gold." Nor will China, it seems. Privatization
is bringing on stream millions of ounces more of silver per year
- an amount that far exceeds in dollar volume what China produces
in gold.
Hot Stuff! Then and Now
Silver may well be
the "hot" money metal of the twenty first century,
as its use in high-tech equipment continues to complement its
value as money metal. But the beauty and value of silver has
been apparent for thousands of years. Long known as the "people's"
metal and "white money," silver is economical, and
affords the benefits of gold without the steep a price.
Silver castings and carvings date back more than 5,000 years
on Greek islands and in Asia Minor. In China, silver mines are
traceable to 400 BC. Recent discoveries of silver ingots, bars
and plates date back to China's Tang Dynasty some 1,500 years
ago and contain carvings made during casting as well as tax and
labor information.
Workers unearthed silver ingots with carvings and inscriptions
that date back to China's Yuan Dynasty, some 700 years ago. They
made a pact not to tell, distributed the ingots and went home.
Only much later after the story had been leaked, and with great
difficulty were the workers eventually persuaded to part with
their ancient silver ingots. Silver was highly valued by these
workers.
Privatization Makes Silver More
Popular
PLEASE
NOTE: Silver
is used in a variety of high-tech applications, making it the
precious metal that has to be replenished every year. High-tech
items are only going to become more popular, putting even more
pressure on silver stocks in China and causing silver prices
to spike as they did toward the end of 2003 and into 2004 - moving
up by some 26%. With its silver running low and threatening to
starve the success of the nation's industrial revolution, China's
leaders are sparing no expense to investigate every aspect of
their nation's white-metal resources. This top-to-bottom scouring
of an entire nation for every available silver lode - large or
small - has already unearthed significant investment opportunities
for China investors - opportunities that will only expand as
silver's price pressures become increasingly subject to speculative
money flows along with industrial pressures.
While silver is one of two "money metals," - the other
being gold - it alone is utilized by manufacturing, especially
high-tech manufacturing and must be replaced, in size, every
year. Until recently, the world's silver stocks and active mines
have seemed sufficient, if barely, to provide both for those
who purchase it as a store of value and those using it for high-tech
industrial purposes.
A shift in the supply/demand equation caused by the powerful
awakening of China's economy - and its 1.3 billion citizens -
has called all this into question. China's rural economy is being
powerfully transformed by a compressed industrial revolution
lasting a decade instead of the 70-100 years that the same process
took England and America.
Everything about China - from infrastructure to housing to education
and entertainment - is changing, modernizing and privatizing
with breakneck speed. Revitalized, privatized, commercial markets
are the stars of the show, but communist officials remain in
the director's chair. Their mission is to integrate capitalism
onto a dying communist system with as little culture shock as
possible. It is an increasingly difficult task, one given that
500 million or so rural Chinese workers are expressing continued
impatience with the progress - and fairness - of their country's
modernization.
The old Soviet leadership's approach to the marketplace consisted
mostly of denying capitalism's strengths before declaring victory
and engineering a quiet surrender. But China's leadership has
decided to build China's wealth rather than redistribute it,
thus enabling private markets, entrepreneurialism and at least
a modicum of human action.
Many more than might be imagined are rooting for China's success.
While it can probably be said that the world's largest corporations
have identified China's 1.3 billion citizens as a critical additional
consumer group, other powerful stakeholders are also in need
of a solvent, peaceful China and are looking to China to provide
expanded generations of those well versed in the capitalist system
of free enterprise.
The West's various Treasury officials - especially anyone associated
with the U.S. Treasury - are giving China all the moral support
they can. After all, the Chinese government and affiliated institutions
are critical purchasers-of-last-resort at U.S. Treasury auctions
now that the Japanese are tapped out and the Europeans have turned
sullen. Much is gained, and by many, should China prosper.
Demographic Danger, Leaders' Balancing
Act
PLEASE
NOTE: China,
Inc.'s leaders, those of its new business class are said to be
action-oriented, prone to dynamic optimism and quick thinking.
They are not hard men; but certainly they must be courageous,
willing to do the tough work of building back up silver stocks
that flat-lined at the end of 2004, according to the Silver Institute.
Silver is critical to China's economy and to its hyper-efficient
industrial revolution, a massive enterprise that some have accused
of being the sole culprit in the tightening silver supplies from
1998 onward. Each year, China's industrial appetite swallows
additional millions of ounces of silver - and the nation is only
now beginning to respond to this critical challenge.
There is a specter haunting China! It is one of the country's
huge masses of working poor and additional millions of frustrated
male adolescents gathering together to seek sudden change. The
uneasy prospect floats like sullen wisps of fog through Beijing's
vast, public places and lurks moodily behind many government
proclamations rationalizing - and justifying - China's newfound
competitive approach.
Are the politically powerful ambivalent? From the first uncoordinated
moves towards decentralization of government authority in the
1970s, to the sudden and unexpected unleashing of pent-up entrepreneurial
energies in the 1980s, to adoption of more formalized policies
in the '90s that recognized the competitive changes the initial
policy of regional decentralization had wrought, China's leaders
have at various times encouraged, accepted, tolerated - and occasionally
lashed out against - the changing face of communism.
Will it all prove too much for China to handle? Bottlenecks and
silver shortages - signs of things to come? China's silver usage
is up, and has been every year, currently hovering around 40
million ounces, though there are estimates it could easily rise
to 100 million ounces. Even then China would not be utilizing
as much silver per capita as many Western nations.
The Silver Institute points out the following about the industrial
uses of silver ("fabrication): "A primary factor affecting
the price of silver is the available supply versus fabrication
demand. In recent years, [the world's] fabrication demand has
greatly outpaced mine production forcing market participants
to draw down existing stocks to meet demand. As these available
sources continue to decline, silver's fundamentals continue to
strengthen."
Fabrication demand is an obvious reason why silver is in such
short supply. A recent press release by mining company and silver-producer
Silver Standard (which recently decided to expand to China) explains
it this way: "The Chinese economy has grown at an astonishing
pace with annual silver consumption increasing from 24 million
ounces to 47 million ounces. China appears to have an insatiable
demand for all metals [including] silver.... "
An analysis of China's use of silver in metric tons reveals that
annual silver consumption grows year over year, as follows below,
at an average rate of 10%
2004: 2200 metric tons/silver utilized
2003: 2000 metric tons/silver utilized
2002: 1800 metric tons/silver utilized
2001: 1500 metric tons/silver utilized
This kind of growth is technically unsustainable. Just now, the
Silver Institute's 2004 World Survey reveals that China's silver
demand has finally surpassed production, putting China formally
in deficit. Since China's main fabrication use for silver is
electrical components/ electronics (with brazing alloys running
second) chances are that so long as the country remains a leading
industrial producer, its silver usage will grow along with its
silver deficit.
There seems little doubt - at the Silver Institute anyway - that
China is behind tightening silver stocks. " Since 1998,
the Chinese have made a substantial contribution to global silver
supplies," reads a supply/demand summary in the 2004 Survey,
"via the run down of domestic stocks of the metal."
What probably is more troubling to Chinese officials is that
China's own silver production has remained fairly flat for four
years in a row. World production, too, has been flat for the
first half of the 2000s. When production is down, China faces
the need to push even more strongly for increased production.
Monetary Use of Silver Adds to
Demand, Deficit
PLEASE
NOTE: China's
dedicated millions of workers season their high-tech production
with silver - not a lot but enough, over a year's time to add
to up a sizeable and significant number. Now a long-delayed reaction
is taking place. Silver stocks remain down while prices begin
to rise, first by pennies, then faster and faster. A full-blown
buyers panic is setting in and soon no one is prepared to say
how high silver will go, let alone gold. One day finally, a top
is reached; the market takes a breather and then begins drift
in a more normal fashion. Dazed investors poke up their heads
and attempt to calculate their losses. Others laugh and talk
animatedly - investors who understood the cyclical nature of
the marketplace and placed their investments accordingly. Now
they are rewarded. Silver has peaked at $100 from its start under
$4. Gold has peaked at $2,000 from a start of somewhere around
$250. These numbers work out to results that are almost exactly
the same - allowing for inflation - as the results turned in
at the end of the great commodities bull run of the 1970s. As
of this writing, the silver/gold ratio is something like 50-to-one,
leaving plenty of room for silver to outstrip gold, power ahead
and do even better than in 1979, relative to gold.
Another demand straining Chinese - and world - silver supplies
has to do with its intrinsic value as a money metal, its ability
to retain value during periods of high inflation as well as high
growth and high inflation and low growth. It seems the 2000s
are struggling with the same low growth/ high inflation scenario
(some call it "stagflation") as the 1970s. Toward the
end of that decade, silver peaked at $50 and gold at $800. Contrast
that to today's prices, where silver is around $7.50 and gold
still fairly close to $400.
Silver and gold are famous for maintaining a price ratio with
each other of approximately 15 to 1 for century upon century;
it has only been in the 20th century that this ratio ceased to
hold. However, in the 21st century I expect the ratio to achieve
a ten to one ratio, highly favoring silver as a vital industrial
commodity and wealth maker! A 2004 Silver Institute graph of
precious metals and copper prices starting in October of '03
reveals that the price of silver now tracks the price of copper
more precisely than gold. This means that available stocks of
silver are being purchased, along with copper, primarily for
industrial purposes.
The bullish commodity trend in the 1970s lasted nearly a decade
- with some hesitations - and there is no reason to believe the
2000's version is going to be any shorter-lived than previous
ones. As of this writing, the silver/gold ratio is approximately
50-to-one, leaving plenty of room for silver to outstrip gold
and close the price differential rapidly. While the distortion
of the silver/gold ratio has happened before, it takes an extraordinarily
powerful surge in demand to do so. One that China has initiated
and will sustain.
Below is the demand-side conclusion to which we are inevitably
led.
1) The combination of a rapidly declining U.S. dollar causes
millions to turn to silver as a store of wealth; in large part
supported by U.S. and European banks' focus on expanding credit
demand around the world.
2) China's accelerated industrial revolution will continue to
demand a greater share of the world's silver supply - increasing
demand for electrical power (superconductivity- silver use),
Transportation (MagLev train- silver use), Water purification
(silver use) and eventually, into aeronautics and space applications.
3) China's untapped domestic potential for new exploration and
development make the future price of silver go....
Boom! (Silver the indispensable metal for China's
future!)
PART TWO
Present-day Analysis of
Chinese Silver Dilemma
Sustaining Silver - Buy or Develop?
China's governmental control over the silver markets and mining
has eroded and now it is the turn of private markets to try invigorate
Chinese silver production - not by regulating supply and demand
but by setting ambitious but reachable goals and reaching them.
If this can be accomplished, then the decision of the government
to develop its silver mining using domestic stores of value will
look wise indeed. Meanwhile, China's mining companies will soon
have a wonderful new 500-acre industrial zone. in which to discuss
the inevitable changes in the silver market and to celebrate
the private-market victories that certainly should be celebrated.
The industrial zone is being built by private funds and
will, according to project officials, "enhance the competitiveness
and status of the Chinese silver industry in the international
market." According to a report by the Silver Institute,
Shanghai was chosen as a silver center because of its strength
as a center of business and finance; the development will be
supported by an existing infrastructure including telecommunications,
roads, communications, gas and electricity.
China's leaders seem recently to have made a two-part decision
regarding raw materials. The first part involves overseas' purchases
that allow China control of critical markets where its domestic
stockpile is low. This would explain, for instance, the recent
purchase of Noranda, the world's largest base metals producer.
The second part involves exploration
and development of raw material domestically - if enough of the
key element seems available.
Even here, however, China has a problem - at least it did so
long as it stuck to developing multi-year industrial plans, just
as the Soviets did. But when it came to mining, these plans were
either useless or counterproductive because they ended up funding
mines that failed a few years later. Yet these failing mines
still received generous development revenues as if nothing had
happened - at the expense of promising, mines that were starved
for capital because their potential was not established when
the multi-year plan was finalized by the Chinese bureaucracy.
Based on my invitation to China, it is my perception that Chinese
mining officials are feeling more acutely than ever the need
to reach out to others in the profession outside of China to
help with the rationalization and professionalization of their
mining industry. Like almost everything else in China, this is
not exactly a new trend. It's been going on - with starts and
stops - for over 15 years in various configurations. Perhaps
a little history is in order....
The Chinese government first became serious about encouraging
foreign investment in China early in the 1990s - and according
to Goldletter International, "One of the specific aims of
the 1990s initiatives was to try and attract foreign investment
into the Chinese gold mining industry. However, the lengthy and
complex approval process, the limited and poor quality of designed
exploration projects, coupled with a legal system that was unclear
about ownership and without guarantees of tenure, was enough
to deter most candidates. In addition, the mining taxation code
did not encourage investment."
The Chinese kept trying. Eventually, late in the 1990s, they
hit on the idea of transferring federal authority to China's
provinces- making the process of foreign investment in China's
mines more flexible and inviting. Now China's provinces - as
Goldletter International tells us - "[had] obtained the
autonomy to approve Sino - Foreign Joint Ventures for mineral
exploration and mining." Almost immediately this new version
of the law began attracting foreign corporations including many
public Canadian mining companies - most with a focus on gold
- eager to partner with provinces via Sino-Foreign Joint Ventures.
With some changes, the Sino-Foreign Joint Ventures approach is
still in force today and remains a fairly customized procedure.
Some proposed ventures need federal government approval while
others don't - mostly depending on whether the project's size
exceeds $30 million and does or does not involve precious metals.
The provincial government in question and simply registered with
the central government can approve projects that do not demand
Chinese central government approval.
Recently there have been some meaningful elaborations. Again,
according to Goldletter International, "In December 2003,
the Chinese Government issued a white paper on China's Policy
on Mineral Resources which stresses that China will depend on
exploitation of domestic mineral resources to guarantee the needs
of its modernization drive.... Sino-foreign co-operation in the
exploration and exploitation of mineral resources will be increased...."
You can see from the above information that my statement at the
beginning of this report that China is "open for business"
is generated by close observation of actual recent events. China
is becoming increasingly pro-market and business-friendly, at
least as of this writing.
When it comes to the silver industry, additional initiatives,
not mentioned above, include the following:
- Creation of exchange-oriented
private silver trading;
- The removal of a bank monopoly
regarding the selling of silver;
- The lifting of import restrictions
- Contemplation of further significant
actions intended to rationalize the silver market in light of
increased activity and overseas participation.
Until very recently, China's
provincial government's joint venturing occurred primarily with
gold companies. But now China is actively seeking mining companies
with a special focus on silver. Recently, several major, North
American silver mining companies - Minco Mining & Metals
Corporation (Minco) and Silver Standard Resources Inc.- announced
a strategic alliance to jointly pursue silver opportunities in
China.
Under terms of the strategic alliance, Silver Standard will invest
C$2,000,000 in Minco Silver to acquire a 20% interest in the
new venture. Silver Standard will have preferential purchase
rights to participate in future financing of Minco Silver in
order to increase its interest up to 30% in Minco Silver. As
part of the strategic alliance, Minco Silver will be the exclusive
entity for both Minco and Silver Standard to pursue silver projects
in China.
I am pleased to see that Silver Standard is headed toward China.
They are successful and well run firm, and they will do well
in China. When I first recommended Silver Standard the stock
was at $2. Today it trades as high as $15.
The gates are open. Foreign silver investment has finally come
to China.
PART
THREE
China's Secret Silver Solution
The Mystery Unfolds
PLEASE
NOTE: China
has proven out its silver promise with numerous producing mines
and others that are just starting to come on stream - raising
potential production by another 2 million ounces or so in 2004.
But far away from the factories, the mines and the stores, gathered
in airy conference rooms high in the sky, China's top planners
scrutinize secret geological maps that suggest mineralization
of such vastness that it makes no sense to fund outside exploration
for another 50 years - only to dig and dig and dig. As the silver
comes up and the ounces mount, China will begin to confront the
totals of Mexico and Peru, the world's biggest silver producers.
Can China's silver output surpass 150 million ounces? Will the
Chinese nation celebrate its destiny - as hosting the richest
store of white metal the world has ever seen?
I have indicated - at least
when it comes to silver - that China's leaders have opted to
exploit what China may possess internally rather than acquire
outside mines, mining entities and infrastructure.
The question I must ask and then hope to answer at least partially
during my travels in China (knowing such an answer may not ever
be fully forthcoming) is how did those in charge of silver production
and extraction in China reach their conclusions? Someone, somewhere,
knows - or believes - China's silver regions are fertile enough
- once privatized anyway - to provide for China's manufacturing
and monetary needs well into 21st century. This is an astounding
conclusion!
Conceptually, the part of China's rolling privatization that
holds the most promise is the obvious inefficiency with which
its government-managed silver mines were operated. Most of us
can agree that even good governments are rarely equipped to handle
sophisticated industrial projects - especially ones as tricky
as mines. China's government, as previously constituted, anyway,
was, from most accounts, nothing like a good government.
China's current production - fourth in the world - was thus achieved
under tremendous handicaps imposed by the political structure.
It was achieved within the context of rigid multi-year plans
and without profit incentives such as bonuses and options packages.
But here is the point that those who are interested observers
of Chinese silver-mining privatization should ask themselves:
If China, with all its problems, could generate enough silver
for a fourth-place ranking under the previous regime, then what
might be accomplished when these silver producing properties
are properly managed and exposed to appropriate modern technology?
Below are just three of wide spectrums of methods to replenish
production:
Retrofitting mines in anticipation of price appreciation: If
one accepts the inevitability of higher prices for silver (as
I do) then one should create a plan to retrofit a number of China's
defunct mines - to put them back to work as the price justifies
the production.
Exploration of claims adjacent to hot spots: Another path to
success may lie in staking and exploring claims nearby "hot"
spots where significant silver is already being mined - and where
new world-class discoveries have recently been made.
Use of Technology to Expand Yield of Historical Mines: The application
of modern mining technology when it comes to exploration and
production, may add years to the lives of some of China's more
famous silver mines while reinvigorating newer production sites.
I am sure that these and many other ore extraction techniques
will add tens of millions, even hundreds of millions of ounces,
to China's silver reserves. The managers who will plan strategy
for China's production of silver and those investors who will
support them are helping to provide necessary resources for China's
continued progress.
First In, Best In
PLEASE
NOTE: There
is a new productivity boom coming your way, brought to you by
China's emerging generations of market-educated, University-trained
factory managers. They expect to drive their factories past quota
and their mines past closing. They will not settle for second
best and they use a number of Western-style financial techniques
to benefit their businesses. Want to be "in first"
and "in the know?" Watch for those mining consultants,
advisors and company CEOs who are able to raise capital, forge
linkages and move quickly toward signing formal deals with private
Chinese individuals and non-governmental entities. Those "first-in"
match-ups will prove powerful indeed.
As you can see from this report, I find China's silver-mining
privatization profoundly stimulating and gratifying. I am excited
about going over to visit China's most promising silver regions
and mines. As an analyst, I welcome the opportunity to observe
those with an "inside track," but I am trying to embark
on this trip without any preconceived notions.
It took a great act of faith in the early 2000s to spend time
and energy preparing for what I have come to believe from my
own research is a new silver boom. Silver may turn out to be
the biggest commodity boom of all the commodities, yes even bigger
than oil and gas! Those few who did prepare for this day certainly
deserve to have their foresight rewarded. And I truly believe
that China's search for silver is not just going to generate
a world-class silver company or two. No, it's probably going
to create brand new entities - silver mining companies on a huge
scale.
I would also venture to say that partnerships and joint ventures
are probably the way that most foreign participation will occur
in China. Distrust is always a factor - especially among the
mid-level communist cadres - and so is fear of changing political
and social realities. Yet I cannot think how these people would
ever make the case that China should go on in the old way, not
maintaining mining properties while setting wildly inaccurate
production goals.
Even now, the torch is being passed from China's old mining operators
- those lodged collectively within the bosom of the state - to
an emergent class of savvy mining entrepreneurs, private, wealthy
individuals and their families who have begun to use clout -
their Guan-Xi - to participate in some of China's most profitable
and lucrative silver mining sites.
Conclusion and Review
If you have read to the end of this report, congratulations are
in order. It's my hope you have learned a good deal about some
of China's deepest and most fascinating silver-money secrets
- those from which substantial profits may be derived. Below,
for those who still struggle, are three conclusions you may derive
from this report.
1) Vast silver fields are waiting to be explored and developed
in China: Top Chinese officials apparently have reason to
believe - or have been led to believe - that there exist world-class
silver reserves within the country that demand to be explored
or placed into production.
2) Fields are placed where prospectors have never even made
a thorough investigation: Silver has already been mined in
China for some 3,000 years, mostly in the eastern regions. The
areas most available that promise additional major discoveries
lie in and around the northern and northwestern sections of China
and Inner Mongolia.
3) China is correct to maintain in-country production of silver:
New exploration techniques combined with advanced production
technology might just allow China to make a silver mother lode
discovery that might just match or perhaps exceed anything found
in other silver-rich regions such as Mexico or Peru. At the same
time, new uses for the "white metal" continue to develop,
the demand for which may far exceed anything currently drawing
down silver stocks.
In my next report, we will discuss the feasibility of finding
such "super sized" ore bodies and track the movements
of well-known prospectors who might be exploring now. We will
also launch a fairly rigorous assessment of what regions and
mines are likely candidates right now to help China fill its
rapidly increasing silver deficit.
All together now ....
Question: What is China's Secret Silver Solution?
Answer: Vast bodies of silver-rich ore available for exploration
and production right now, right in China's back yard....
I think you've got it!
Nov 19, 2004
David Morgan
email to : silverguru22@hotmail.com
David Morgan has a weekly radio
show on the metals at http://www.netcastdaily.com/fsnewshour.htm,
additionally he can be viewed on eTV at www.freemarketnews.com.
Mr. Morgan
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