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Resources Top 5: Reddit buying power forces silver to 6-month highs, stocks rocket
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- Silver market could be the target of a ‘GameStop-style’ short squeeze, with dealers running out of physical silver
- Aussie stocks TMZ, EQE, SVL, ARD and IVR fly in morning trade
- ASX silver stocks guide: Here’s everything you need to know
Here’s your top ASX small cap resources winners in morning trade Monday, February 1.
The upside for silver was already established, with Metals Focus predicting that it was due to outperform gold in 2021.
But then the GameStop short squeeze happened. Punters started looking for the next target which, by many accounts, could be the silver market.
A short squeeze happens when a stock or other asset (in this case, silver) jumps higher, forcing short sellers to buy it at a higher price to prevent even bigger losses.
This buying momentum forces prices even higher.
Someone – maybe the Wallstreetbets crew – is pushing silver demand to unprecedented levels.
My friend runs a major, major gold and silver dealer that’s been around for three decades. I just text him this. And his response #silversqueeze pic.twitter.com/FrLHGO2sfU
— Quoth the Raven (@QTRResearch) January 31, 2021
APMEX, JM Bullion, and SD Bullion are all out of available silver at the moment.
So if anyone wonders if @wallstreetbets (#Reddit) has the ability to impact the #silver market, the dealers running out, & 34 million $SLV shares being added on Friday are the answers that matter. pic.twitter.com/4fE0X2ohoM
— ArcadiaEconomics-Squeeze the Silver Shorts!🥈🏝🍾 (@ArcadiaEconomic) January 31, 2021
Aussie silver stocks are flying in response.
Thomson is close to wrapping up its acquisition of the previously producing Webbs and Conrad silver projects in NSW.
The high grade Webbs deposit produced ~55,000t of ore grading at least 23oz (about 710 grams per tonne) silver between 1884 to 1901.
Conrad was historically one of the largest silver mines in the New England region, producing about 3.5moz of silver along with lead and tin.
Late last year, Equus signed a binding deal with TSX-listed miner Mandalay Resources to acquire the Cerro Bayo silver-gold mine and infrastructure in Southern Chile.
The deal includes a processing plant which has produced about 600,000 ounces of gold and 45 million ounces of silver since 1995.
Silver Mines’ Bowdens project in NSW is Australia’s largest undeveloped silver deposit.
The proposed mine would produce 66moz of silver, 130,000t of zinc, and 95,000t of lead over an initial 16.5-year life.
Argent is accelerating towards development of the 52moz Kempfield silver-lead-zinc project.
“The strength in commodity prices and worldwide demand for silver, gold and zinc production make for exciting times for Argent and its stakeholders,” Argent boss George Karageorge says.
Argent plans to complete a resource upgrade by May.
INVESTIGATOR RESOURCES (ASX:IVR)
To press the button on development of its flagship Paris project, Investigator needed a sustained silver price somewhere around the $US19.20/oz mark, managing director Andrew McIlwain told Stockhead in September 2019.
With prices well above that at ~$US27/oz Investigator is now making moves.
The stock is currently working on a pre-feasibility study for the 43moz Paris project in South Australia — the highest grade deposit in the country — which it hopes to complete in June 2021.
A quarterly recap shows the company completed ~25,000m of drilling into its flagship Paris project and raised $7m for a total bank balance of $13m.
