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In a fascinating and counterintuitive twist, silver mining stocks are showing more strength and confidence at ~$90 per ounce today than they did when silver briefly touched ~$120 weeks ago.

This is not a market anomaly; it is a powerful signal. The miners are telling us that the market is no longer reacting to volatile price spikes, but is instead beginning to price in a new, sustained, and much higher silver price environment.

The great catch-up trade is on, and it reveals a deep truth about the explosive free cash flow being generated and the incredible undervaluation that still exists in this sector.

Look closely at the charts. While silver has pulled back from its speculative peak above ~$120, the silver miners (SIL) and junior silver miners (SILJ) have held their ground with astonishing strength, up over 100% over the past six months.

This is the market screaming that the brief spike was noise, but the new, higher plateau is the signal. The miners are not just weathering this correction; they are consolidating on a new, higher base, building energy for the next explosive move. This is the look of a healthy, powerful bull market shaking out the weak hands before its next ascent.

You Need to Know:

• The Confidence Signal: Silver stocks are not weaker with the price correction; they are stronger. Their resilience shows the market is building confidence in a structurally higher silver price floor, which is far more important for long-term valuation than a temporary price spike.
• The Great Catch-Up Trade: For months, miners have lagged the metal, creating a valuation gap. That gap is now closing as the market is forced to acknowledge the undeniable profitability and free cash flow being generated at these new, higher silver prices.
• The Golden Tailwind: Gold will eventually breakout above $5,600, just as it has above other intermediate highs. As gold moves higher, it will drag silver along with it, providing a powerful tailwind for the entire precious metals complex.
• The Silver Sling-Shot: The Gold-to-Silver Ratio (GSR) is currently above 50:1, but historical bull market cycle lows are in the 15-20:1 range. This means silver is poised to outperform gold by a factor of 3-4x, creating a sling-shot effect for silver prices and mining stock profits.
• The Double Discount: The Silver Miners-to-Silver Ratio is at a historic low, matching bottoms seen in 2015, 2019, and 2023. This means miners are not only leveraged to an undervalued metal (silver vs. gold), but they are also historically cheap relative to silver itself.
• The Free Cash Flow Machine: At ~$90 silver, producers are generating obscene amounts of free cash flow. We will explore the simple, undeniable math that makes these companies some of the most profitable businesses on the planet right now.
• It’s Not Time to Sell: This is the re-rating phase, not the overvaluation phase. I will explain why selling now would be premature and how to identify the signs of a true market top.

These are not just abstract concepts; they are the fundamental drivers behind the powerful price action you see in the charts. The divergence between the metal’s consolidation and the miners’ strength is the market’s way of telling you that the underlying profitability of these companies has undergone a permanent, structural shift.

This is the story the mainstream is missing for now, and it is the key to understanding why this bull market has a ways to go.

Let’s Dig Into The Following:

1. it is clear that ~$90 silver is the new $120 silver. In the world of investing, price is not always the most important signal. Sometimes, the character of the price action tells a much deeper and more profound story. This is precisely what is happening in the silver market right now. The fact that silver mining stocks are stronger and more resilient at ~$90 per ounce today than they were during the fleeting, volatile spike to ~$120 weeks ago is one of the most bullish signals an investor could ask for. Silver is off about 24% from its highs, yet the silver miners are only off about 1.7%. That speaks volumes. Why the miners are not just surviving this correction; they are thriving in it, and their strength is a clear vote of confidence in the future of silver!
2. The catch up trade and FCF machine is real. For months, investors have been frustrated by the apparent disconnect between the soaring price of silver and the lagging performance of the mining stocks. This is a common phenomenon in the early stages of a precious metals bull market. As a result, the mining stocks, which are perceived as higher-risk, leveraged plays on the metal, are shunned. This creates a significant valuation gap, where the producers are trading at multiples that do not reflect the new, higher-price reality. The “catch-up trade” is the market’s violent and belated recognition of this error. As the charts of the senior (SIL) and junior (SILJ) miners clearly show, that catch-up trade is now in full swing. Why the catch-up trade is the sound of thousands of analysts and portfolio managers simultaneously updating their spreadsheets and realizing that these stocks are trading at absurdly cheap multiples relative to the cash they are generating!
3. Then there is the golden tailwind which leads to the silver sling-shot. While the internal dynamics of the silver market are incredibly bullish, the story gets even more explosive when you zoom out and look at the bigger picture. Silver does not trade in a vacuum. It is inextricably linked to its monetary twin, gold. And right now, gold is coiling once again for another big breakout. Why when gold breaks out above this level, it will send a shockwave through the financial system and ignite a fresh wave of buying across the entire precious metals complex, which is a big built-in tailwind for silver and the miners!
4. While gold provides the initial pull, at a certain point in the cycle, silver takes the lead and dramatically outperforms. This relationship is best understood through the Gold-to-Silver Ratio (GSR). Today, the GSR is hovering around 58:1.

   While this is down from the highs of the cycle, it is still miles away from the historical lows (15-20:1) seen in previous precious metals bull markets. Why for the ratio to move from 58:1 to 20:1, the price of silver must outperform the price of gold by a factor of nearly 3 to 1, launching the silver sling-shot!

5. Right now there is a double discount creating a generational buying opportunity.

   Not only is silver historically cheap relative to gold, but the silver miners are historically cheap relative to silver itself. As Tavi Costa’s chart at the top of this article clearly shows, this ratio is currently scraping along a historic bottom, at a level that has marked the absolute best times to buy silver miners over the last few decades. Why this is not just an opportunity; it is an anomaly, a convergence of undervaluation that rarely occurs and almost always precedes a violent and profitable re-pricing event!

6. And the current strength in the silver mining sector is based on the powerful economics of ~$90 silver. However, the truly explosive potential of this bull market lies in the very real possibility that silver is not just consolidating for a move back to ~$120, but is coiling for a history-making surge to $150, $200 or even $250+ per ounce in the coming years. Why there is a perfect storm for silver now present, a confluence of factors that has the potential to create a price spike of historic proportions. If and when silver does make its move back above $120 once again, the impact on the mining stocks will be outrageous!

So, let’s dig in…

The Confidence Signal: Why $90 is the New $120

In the world of investing, price is not always the most important signal. Sometimes, the character of the price action tells a much deeper and more profound story. This is precisely what is happening in the silver market right now.

The fact that silver mining stocks are stronger and more resilient at ~$90 per ounce today than they were during the fleeting, volatile spike to ~$120 weeks ago is one of the most bullish signals an investor could ask for.

Silver is off about 24% from its highs, yet the silver miners are only off about 1.7%. That speaks volumes.

A quick, violent spike, as we saw weeks ago, is often driven by short-covering and speculative froth, which can evaporate as quickly as it appears, leaving a trail of broken charts and trapped longs.

A consolidation at a higher plateau, even after a sharp correction, demonstrates acceptance. It shows that buyers are willing to step in and defend this new price level, that a durable base is being built from which the next major leg up can be launched.

This stability gives investors, and more importantly, company management teams, the confidence to make long-term plans based on a new economic reality. The resilience of the silver miners during this price correction is the ultimate “tell.” It signals that the weak hands, the tourists, and the momentum chasers who bought the $120 top have been washed out of the market.

What remains are the strong hands; the value investors, the institutional funds, and the long-term bulls who understand the fundamental story. They are using this consolidation period not to panic, but to accumulate, absorbing the selling pressure and quietly building their positions in anticipation of the next major move higher.

This is how a real bull market is built: not on a single, spectacular price spike, but on a steady, deliberate, and confident climb, punctuated by healthy corrections that shake out the speculators and solidify the trend.

The miners are not just surviving this correction; they are thriving in it, and their strength is a clear vote of confidence in the future of silver.

The Catch-Up Trade & The FCF Machine

For months, investors have been frustrated by the apparent disconnect between the soaring price of silver and the lagging performance of the mining stocks. This is a common phenomenon in the early stages of a precious metals bull market.

The initial move in the metal is often met with skepticism and disbelief. The market, conditioned by years of range-bound trading, views the rally as temporary, a head-fake destined to fail.

As a result, the mining stocks, which are perceived as higher-risk, leveraged plays on the metal, are shunned. This creates a significant valuation gap, where the producers are trading at multiples that do not reflect the new, higher-price reality. The “catch-up trade” is the market’s violent and belated recognition of this error.

As the charts of the senior (SIL) and junior (SILJ) miners clearly show, that catch-up trade is now in full swing. It is the moment the market finally accepts that the new price level is real and sustainable, and it scrambles to re-price the miners to reflect their new, explosive profitability.

This re-pricing is driven by the simple and undeniable mathematics of free cash flow (FCF). The economics of a mining company provide incredible leverage to the price of the underlying commodity.

Consider a hypothetical silver miner with an All-In Sustaining Cost (AISC) of $20 per ounce;

• When silver was trading at $30, this company was generating a respectable $10 per ounce in FCF.
• However, at $90 silver, that FCF explodes to $70 per ounce.
• A 3x increase in the price of silver has resulted in a 7x increase in the company’s free cash flow.

This is the power of operating leverage, and it turns these companies into literal cash-printing machines. The market can ignore this reality for a while, but it cannot ignore it forever.

The catch-up trade is the sound of thousands of analysts and portfolio managers simultaneously updating their spreadsheets and realizing that these stocks are trading at absurdly cheap multiples relative to the cash they are generating.

The Golden Tailwind and the Silver Sling-Shot

While the internal dynamics of the silver market are incredibly bullish, the story gets even more explosive when you zoom out and look at the bigger picture. Silver does not trade in a vacuum. It is inextricably linked to its monetary twin, gold. And right now, gold is coiling once again for another big breakout.

As the chart shows, gold is currently consolidating just below its all-time high of $5,600. This is the final hurdle before the next major leg up in this secular bull market. When gold breaks out above this level, it will send a shockwave through the financial system and ignite a fresh wave of buying across the entire precious metals complex.

As the undisputed king of monetary metals, gold leads the charge, and when gold runs, silver is pulled along for the ride. This provides a powerful, built-in tailwind for silver, a fundamental force that will help carry it to new highs regardless of its own supply and demand dynamics, which are incredibly favorable on their own merit.

But here is where the story gets truly exciting. While gold provides the initial pull, at a certain point in the cycle, silver takes the lead and dramatically outperforms. This relationship is best understood through the Gold-to-Silver Ratio (GSR), which simply measures how many ounces of silver it takes to buy one ounce of gold.

Today, the GSR is hovering around 58:1, meaning it takes 58 ounces of silver to buy one ounce of gold. While this is down from the highs of the cycle, it is still miles away from the historical lows seen in previous precious metals bull markets.

In the final, most explosive phase of a precious metals mania, the GSR has historically bottomed out in the 15-20:1 range. For the ratio to move from 58:1 to 20:1, the price of silver must outperform the price of gold by a factor of nearly 3 to 1.

This is the “silver sling-shot.” It is the moment when silver, the more volatile and speculative of the two metals, breaks free from gold’s gravitational pull and launches into a parabolic advance of its own.

The implication is clear: as gold begins its next major leg higher, silver will not just follow; it will eventually lead, and the resulting move will be spectacular. This dual-engine of a rising gold price and a compressing GSR is the rocket fuel that will send silver mining stock profits; and their stock prices, into the stratosphere, just like in previous bull cycles.

Even gold miners with significant silver by-product credits will experience a massive, unexpected boost to their cash flow, further highlighting the sector-wide impact of this coming silver super-spike.

The Double Discount: A Generational Buying Opportunity

If the golden tailwind and the silver sling-shot were not enough, there is another layer of deep undervaluation that makes the current setup for silver miners a truly generational opportunity.

Not only is silver historically cheap relative to gold, but the silver miners are historically cheap relative to silver itself.

This is illustrated perfectly by the Silver Miners-to-Silver Ratio, a powerful valuation metric that compares the performance of the SIL ETF to the price of physical silver.

• When this ratio is low, it means the miners are lagging the metal, representing extreme undervaluation and investor pessimism.
• When it is high, it means the miners are outperforming and may be overvalued.

As Tavi Costa’s chart clearly shows, this ratio is currently scraping along a historic bottom, at a level that has marked the absolute best times to buy silver miners over the last few decades.

The ratio has bottomed at this level three times before: in late 2015, late 2019, and mid-2023. Each of these instances was followed by a massive, multi-month rally in the silver mining stocks as they played catch-up to the metal.

Today, we find ourselves at that same inflection point, with the ratio signaling that the miners are coiled and ready for another explosive move higher. This creates a rare and powerful “double discount” for investors.

You are not only buying into a metal that is historically undervalued relative to gold, but you are doing so through companies that are themselves historically undervalued relative to the metal.

It is a leveraged bet on a leveraged bet, a setup that offers the potential for truly explosive, asymmetrical returns. This is not just an opportunity; it is an anomaly, a convergence of undervaluation that rarely occurs and almost always precedes a violent and profitable re-pricing event.

The Path to $120+ Silver & The Coming Overvaluation Phase

The current strength in the silver mining sector is based on the powerful economics of $90 silver. However, the truly explosive potential of this bull market lies in the very real possibility that silver is not just consolidating for a move back to $120, but is coiling for a history-making surge to $150, $200 or even $250+ per ounce in the coming years.

• The macro-economic forces that are driving this bull market; sovereign debt crises, de-dollarization, a global flight to safety, and an unprecedented supply/demand deficit, are not abating; they are accelerating.
• The industrial demand for silver in the solar, electric vehicle, military, & A.I. industries is growing exponentially, while the investment demand is being supercharged by a world that is losing faith in fiat currencies.

This is a perfect storm for silver, a confluence of factors that has the potential to create a price spike of historic proportions. If and when silver does make its move back above $120 once again, the impact on the mining stocks will be outrageous.

The same FCF leverage that is driving the current catch-up trade will be magnified to an almost unimaginable degree. A move from $90 to $180 silver would not just double the FCF of our hypothetical miner; it would more than double it again, from $70 per ounce to $160 per ounce.

This is the kind of exponential growth that creates multi-bagger returns in a matter of months, not years. It has happened in previous bull cycles and will happen again. These were a few of the silver miner spikes in just a few months between 2010-2011.

This is the phase of the bull market where the miners truly decouple from the metal and go on a parabolic run of their own. It is the phase where the market throws valuation out the window and embraces pure, unadulterated momentum.

This is also the phase where the smart money begins to take profits;

• The time to sell is not when the market is skeptical, but when it is euphoric.
• The time to sell is not when the miners are trading at a discount to the metal, but when they are trading at a massive premium.
• The time to sell is when the last bear has been converted, when the mainstream media is breathlessly reporting on the silver mania, and when your taxi driver is giving you stock tips.

We are not there yet. We are not even close. We are in the early innings of a powerful re-rating, a period of dawning realization and reluctant acceptance. The overvaluation phase, the mania phase, is still a long way off. The time to sell is coming, but it is not today.

The Re-Rating Has Only Just Begun

The message from the silver mining sector is clear, powerful, and unambiguous. The recent price action is not a sign of weakness, but of profound and growing strength.

The market is finally looking past the short-term volatility and recognizing the new reality: we are in a sustained, high-price silver environment, and the miners are just beginning to reflect this in their valuations.

The great catch-up trade is not a fleeting moment, but a fundamental re-rating of an entire sector based on the undeniable mathematics of explosive free cash flow generation.

This is the time for conviction, not for doubt. The resilience of the miners during this correction is the ultimate confirmation that the bull market is real, healthy, and has a long way to run.

While the mainstream is distracted by the day-to-day fluctuations, the smart money is focused on the bigger picture: a structural supply deficit, accelerating demand, a golden tailwind, and a compressing Gold-to-Silver ratio that promises to act as a sling-shot for silver prices.

The path to $120+ silver is paved with the very macro-economic certainties that are causing chaos in other parts of the market. The time to be positioned in the silver mining sector is now, before the catch-up trade is complete and the truly parabolic phase of this bull market begins.

Metals and Miners

Feb 27