Silver’s critical status and price surge put fresh focus on Silver Mines’ pure play Bowdens

• US critical minerals list update confirms silver’s strategic status, likely triggering stronger investment and policy support.
• US inclusion supports NSW Government decision to add silver to its Critical Minerals and High-Tech Metals list in 2024
• As Australia’s largest undeveloped silver project, Silver Mines’ Bowdens can play a key supply role while offering strong leverage to record prices

Special report: Silver has long been a highly favoured asset for a broad range of American investors but its status has been officially elevated thanks to its inclusion on the US critical minerals list.

The addition by the US Geological Survey (USGS) recognises the metal’s crucial role in defence, clean energy technologies, and the electronics and medical equipment modern consumers have come to expect in their lives.

The US will now treat silver as a strategic resource for its economy and national security. This, in turn, could open the door to potential funding support for projects in allied nations such as Australia under the landmark US-Australia Critical Minerals Framework.

Silver switch

Silver’s rocket fuel is its periodic table leading conductivity for electrical and heat applications. This makes it indispensable for almost anything with an on-off switch right through to the growing number of industrial scale solar farms.

The Silver Institute says solar applications alone could account for up to half of industrial silver demand by 2030, with global usage forecast to rise 20% in that timeframe.

At the same time mine output remains stagnant at a forecast 1,030.6Moz and the Institute forecasts a looming supply deficit of approximately 117Moz in 2025, the fifth consecutive shortfall.

How low can ratio go?

Prices have reflected the looming squeeze with silver at US$52/oz, even after pulling back from October records of above US$54.

With gold trading around US$4,140/oz, the gold-silver ratio of ~80:1 is well above the 20-year average range of 40–80:1, indicating more price acceleration as noted by Blue Ocean Equities.

If the ratio normalises, silver could push above the US$100/oz mark.

Billionaire investment manager Eric Sprott is even more bullish, seeing potential for US$250–500/oz over the next decade and the ratio hitting a low, but previously seen, ~15:1.

Bowdens waits in wings

Standing out as Australia’s largest undeveloped silver deposit – and one of the biggest in the world – is Silver Mines’ (ASX:SVL) Bowdens project.

With its current resource of 180Moz silver (334Moz silver equivalent) and a 71.7Moz reserve, it has a forecast 16-year mine life with the already robust economics of an AISC at US$16/oz and a post-tax NPV of $253m. But that’s based on a silver price of just US$29/oz applied in its December 2024 Optimisation Study and with silver prices now 75% higher, there’s more upside in sight.

Bulk samples have returned grades 43% above block model averages and deeper drilling has hit bonanza zones of up to 1,251g/t silver.

Another significant hallmark for Bowdens is that more than 85% of its revenue is expected to come from the silver price, among the highest of any undeveloped silver mines globally, giving it rare pure play appeal.

The company is now awaiting final development consent following changes to NSW planning laws that have clarified the approvals pathway. The project’s alignment with the NSW Critical Minerals Strategy 2024–35 further supports its strategic positioning.

Silver Mines managing director Jo Battershill said the project’s leverage to the silver price, in addition to its scale and grade, put it in a class of its own:

“There aren’t many scalable, long-life, low-cost silver assets out there, and given where silver is now, there’s understandably a lot of interest in Bowdens.”

After completing the Optimisation Study in late 2004, the company is advancing the project through a definitive feasibility study with results expected in 2026.

Into critical market

Adding to its strategic edge, Silver Mines has also moved into the US with the acquisition of the Calico North silver, and Kramer Hills gold and silver project. Both are in California’s San Bernardino County, home to MP Materials’ operations.

Calico North sits within the fourth-largest silver camp in North America, containing 38 historical mines and ~40km of prospective strike where Silver Mines plans to start drilling next year.

This article was developed in collaboration with Silver Mines, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.