Countdown To A Silver Boom (Uncut) 02-24-2025

Countdown To A Silver Boom: The Triggers For Next Record High | Galen McNamara

Donald Trump is set to impose 25% tariffs on steel and aluminum. What does this mean for precious metals, industrial metals? What does this mean for the commodities complex overall? And the mining sector. We’ll go over this with our next guest, Galen McNamara, CEO of Sumer Silver.

Welcome to the show, Galen. Good to see you. Hi, David.

Good to see you as well. Thank you for having me on. Before we talk about exactly what’s going to happen with these tariffs and how they may impact the commodities market, let’s talk about what’s been happening with the commodities market up until now.

As you know, silver has had a pretty good run in the first month of 2025. It’s up about 12% year to date. Gold is up as well.

So what’s been driving this rally up until now? You know what, I think big picture, look at all the uncertainty in the world politically, economically, and gold and silver are just a place that I think increasingly investors want to be. As we’re speaking right now, I think we’ve got gold at an all time high in the spot market bid at $2,900. Silver is still lagging a little bit behind.

It’s at 32 and we’ve been trading there on and off for the last give or take eight months. So generally, that’s what I think it is. So much uncertainty in the world, great to own precious metals.

What kind of uncertainty are we talking about? Can you elaborate? Well, I mean, look at the ongoing conflicts in Eastern Europe. Look at the new administration that you don’t know for better or for worse, you don’t know what they’re going to say one day to the next. You don’t know what curveballs are coming at you.

And I think that like me living here in Canada, we just narrowly averted 25% tariffs on everything a week ago. So it’s that type of uncertainty that I think is starting to drive people to owning more gold and silver, just a very, very high level. How does global uncertainty translate to higher silver prices? Because, I mean, just speaking for me personally, in times like this and when inflation has been going on for how long, I think that generally we want to own precious metals and look at gold first.

But sure, silver has always been the poor man’s gold. And even just a little bit differently, there’s just so much more industrial demand for silver and new uses, new technological applications that we didn’t have even three, four years ago at scale that are now scaling out like solar, new car batteries, a little bit of silver goes in a lot of things. And that’s really impossible to substitute.

So is it something like a perfect storm coming? You know, that’s what we’re feeling. Sorry, you said there’s new industrial applications for silver. Can you name a few of these? Yeah.

So I think the really well known ones, the most well known one is something like solar panels. That’s been very much increasing demand is silver going into solar panels and only a little bit of silver goes in every solar panel. But when you have big buildouts, you start talking about hundreds of millions of ounces demanded, you know, year over year that goes up not exponentially, but very significantly into a market that supplies something like a billion ounces of silver every year.

So it’s significant. Right. So solar panels, that just to clarify, isn’t really a new development, but are you saying that there’s going to be a wrap up in solar panel demand from 2025? Yeah, that’s what the data has been showing is happening over the last couple years and is projected to increase in the next couple several years as well.

How is the mining industry coping with the onslaught of tariffs and the potential for it? Suppose, you know, I know this was not enacted because Trump had threatened 25 percent tariffs across the board for Canada and Mexico. And then within 48 hours, he rescinded that after Canada and the U.S. came to terms on several things. So suppose that were to have happened, your, you know, the ores under the ground of your deposits, for example, would have been tariffed for a larger producing company.

How is that going to impact your… Not for us. Not for us, David. Actually, that’s an important point you make.

Well, how does the mining industry cope with that? I mean, you’re always in reaction mode. You know, you’re constantly reacting to new information. But for us at our company, at Summa Silver, we’re working in the U.S. and our silver deposits are in the United States.

So we would have been not subjected to those tariffs. And silver deposits in the United States that are high grade like ours are very, very rare. Okay.

So let’s say tariffs happen. Let’s say Trump announces tariffs on all Canadian goods. Suppose that were to come back.

What’s your initial reaction as a CEO of an explorer? You know, because my initial reaction is that, hey, look, like our deposits are in the United States. We’re not going to be subjected to these tariffs like, you know, the biggest silver producer in the world, Mexico, you know, would be. That’s an advantage for us competitively.

Well, tell us about Summa Silver. Tell us about the deposit that you have, where you’re operating, the size of the deposit. And then we’ll start from there.

Yeah. So Summa Silver is a silver development company with two projects in the United States. One is in Nevada.

One is in New Mexico. A couple of weeks ago, we announced mineral resource estimates for the first time on both of these projects that total 78 million ounces of high grade silver equivalent. So a combination of silver and gold.

That was after founding the company about four years ago. We’ve been diligently drilling these deposits out. We’re able to start to wrap our arms around what’s left remaining in these places because they’re old mining places that go back to the Wild West.

But the main point is that, OK, now we’ve got a starting point of 78 million ounces and there’s still excellent potential to grow these deposits out significantly larger. And I’m a geologist. So this is, you know, my specialty is going into these places and defining resources and making discoveries.

And I think there’s still a lot more silver left to find here. So you’ve recently put out a resource estimate. I’ll just leave this on the screen here.

Tell us about what happened here. Yeah, exactly. Exactly.

So here we go. This is a good one to show because it shows the split between the two projects. So in Nevada, in the green bars there, and I have to throw a bunch of numbers out just because they split the way that they’re defined.

But in the indicated category, we’ve got 10.47 million ounces. And then in the inferred category, an additional underground 33 million ounces. And that’s at the Hughes property in Nevada.

And then move to New Mexico, the blue bar at the top on the left, an additional 32 million ounces on that project as well. And when you look at, OK, well, why does this really matter in terms of American silver ounces in the ground? Well, if you look at high-grade projects that aren’t in the hands of a major mining company, depending on how you define what high-grade silver is, you can almost count them on one hand. And we’ve got two of them.

And I think, again, why does it matter? OK, well, they’re in the US. Well, just to put context on the geopolitical situation, finding our metals and our commodities from domestic sources is becoming more and more important these days. And a lot of people maybe think that, hey, America doesn’t have big metal deposits.

Well, they absolutely do. And developing them domestically, I think, is really important because it’s not like if you get your oil or anything from other places, maybe in the third world or different places, whatever, it can sometimes be dollars for dictators. And I just think that’s fundamentally wrong.

We have good mineral resources in our countries and in the Western world. So let’s develop them. What can the government do to incentivize more development and exploration of silver and other critical minerals in North America? Yeah.

Yeah. Well, look to the Trump administration. They’re already cutting red tape and taking out the gatekeepers.

We’re seeing changes. We’re hearing about changes. I’m from a high level, just like everyone else is in the bigger picture.

But just in commodities development, you know, we’re hearing about changes already. And this administration has been in the White House for only over a month. So, number one, cut red tape.

Number two, remove some of the gatekeepers. And number three, you just have to the some of the agencies need more staffing the environment, the regulatory agencies need a bit more staff to handle the regulatory requirements that they need to oversee environmental regulations and things like that. Because one thing that, you know, I don’t think any mining company suggests is that, hey, we need we necessarily need to loosen up on things like environmental regulations at all.

You know, we just do things differently than they did, say, 50 or 100 years ago. It’s just getting access to speeding up permit times is a really, really key challenge for the mining industry in the first world. And I’m encouraged by the signs I’m seeing from the Trump White House so far.

Great. Investor sentiment for the miners in 2024 have been pretty bad compared to sentiment in the bullion market is what I’ve heard. Absolutely.

Earth miners have not outperformed the bullion. That’s not to say that GDX and GDXJ have not done well. They have.

It’s just that people were expecting more leverage, more performance to the upside. So why that why this shift in sentiment away from equities last year? Yeah, that’s a that’s a really good question and something that frustrates me to, you know, at very high levels, like why has have both silver and gold run, but the mining equities have not caught up with them? And, you know, I don’t really have an answer to that. But I do know that when I look at things like, OK, well, when the generalist investor wants to come into the precious metals markets, you know, what percent allocation should they have in precious metals, whether it’s physical mining stocks or what have you? And it’s probably less than 1% now.

Conventional wisdom say maybe it should be 5%. So, you know, when that actually happens, you know, I expect equities to catch up and maybe even outperform, you know, the precious metals. But why hasn’t it happened yet? You know, I don’t know.

You know, I don’t know. Well, what does the industry need to do to attract that interest back? You know what? I think we need to start making people money like the overall bigger mining industry. There’s you know, mining is a very difficult business and it’s hard to build a mine.

You know, there’s it’s hard to get exploration ready and discover things. It’s getting harder and harder. What we need to start doing is start starting to make people money, you know, in terms of successful businesses.

And that’s starting to happen with the gold majors now. I think there’s a few majors out there that are starting to do very well. And number two, avoid the major missteps that have hurt us in the last 10 years or more, whether it’s a tailings dam collapse, you know, in some place or whether it’s insane cost overruns on building a mine in another place.

Now, that’s the type of thing that I think we can do to help ourselves. So what’s your plan to add shareholder value? You know, for for us, you know, we’re just going to keep doing what we’re doing. We’ve been very successful in taking these two projects that we’re working on, starting with zero ounces and growing them out systematically in the last four or five years.

And now for us, it’s it’s about now that we have an original resource estimate quantified, you know, we can now start to aggressively step out and continue to continue to add ounces to our book very systematically and very aggressively because not to get too far into the details of our technical understanding the geology, what really drives discovery, but we have that very well understood. We’re very efficient at adding ounces. Just to put that into perspective, we discovered Silver taken from zero to 78Moz at a cost of about $0.29 per ounce discovered in the ground.

And Silver’s worth, hey, like $32 now. I think that’s a pretty good value proposition. You know, discovering Silver in the ground for $0.29 when it’s worth $32 is a pretty good value proposition.

So we’re going to continue to do that and just grow these in the most efficient way that we can. So when you say that you’re adding ounces to the ground, what do you mean by that? Are you buying other deposits? Are you just drilling for more? Are you acquiring other companies? Yes. Thank you.

That’s a good clarification. It’s by drilling for more is what we’re looking at and doing now. We’re drilling right now on our project in Nevada and stepping out and hitting those veins that hold the Silver, just like we thought we would.

All the assays are pending. That’s the main way that we’re doing it. But of course, like a company like mine, I’m always looking for M&A opportunities.

And it’s probably, in my opinion, just a matter of time before we find something that makes sense. But I’ll tell you, David, Silver deposits are really difficult to find. They’re very rare.

So there’s just not that much out there. It’s the opposite from the Gold deposit equivalent, just speaking as a technical person now. We’ve got 2 that are really good, which is nice, and we’ll continue to grow those out.

But I really want to make sure that if we do some M&A and maybe combine with another company, that it makes sense for our shareholders. There are just very few other Silver developers out there. And when you say that Silver is difficult to find, are you referring to pure Silver deposits that are difficult to find? Because from my understanding, a lot of Silver comes as a byproduct of other minerals.

Yeah. I would say that where Silver is like half to more than half of the value of the geological deposit. Yes, very rare and therefore valuable.

What’s the rough breakdown of geological components of your deposit, for example? Us, we’re just Silver and Gold. Okay. All right.

But primarily Silver? Yeah. It’s primarily Silver to split 50-50, depending on the project. In Nevada, it’s primarily Silver.

In New Mexico, it’s kind of more like 50-ish, 50-ish, depending on the prices of the metals and depending on the potential. Well, what are some of the advantages of operating in the U.S., New Mexico and Nevada versus, let’s say, South America, Latin America, or even Canada, for example? Yeah. I think Canada and the U.S. are probably comparable, but say the Western world compared to other places as well, especially in the United States, like property rights matter, number one.

Those are enshrined, I think it’s safe to say. Number two, there’s a very well-known and defined regulatory path that a company can follow that if they check the boxes, do what they say they’re going to do, there’s a clear path to development, which provides certainty for investors, which I think is very important. We might look and say, hey, the permitting timeline is too long, and it is, or the environmental regulations are too strict, and maybe in some cases they are, although I’m certainly not an advocate for that by any means.

But I think that it’s an opportunity to do things the right way and develop projects in the right way, which you might not have in other places. I’m not saying that any of those other places are necessarily bad, but I think it’s important for people and investors may want that certainty of operating in places like the US or in places like Canada, where you know that, number one, property rights matter. Number two, we have good labor and environmental laws that help protect everything.

So that’s part of the reason, I think, for sure. So what’s ultimately next for us, Silver? What’s your next step after having completed this resource estimate? Yeah, so right now, it’s continue to step out with the drilling and continue to add more ounces via exploration. And we’re already doing that now.

And we’re drilling on our Nevada project, stepping out around the deposit and starting to hit some interesting veins. And although the assays are still pending, that’s fine. We’re going to continue to do that and really go for it.

And instead of there being, you know, in Nevada, 46Moz of Silver, we’re looking for a pathway to 100Moz plus. And where is that geological sweet spot? That’s what we’re trying to find right now. This is your management team.

Tell us a little bit about the background of, well, your professional history, but also some of the other members of the management team. Yeah, yeah. So myself, Galen, I’m a geologist going back over 15 years now.

I’m always concentrating on exploration, generally in precious metals. But interestingly enough, before founding SUMA in 2020, I was managing the exploration for NextGen Energy between about 2014 and 2018, give or take. Of course, we drilled out a very large Uranium deposit in Saskatchewan.

But other than that, I’ve always been focused on precious metals. This is a development company, we’re in a bit of an exploration story. So, you know, concentrate on the people who have histories and making big discoveries.

One of them is Christopher Leslie. He discovered the Blackwater Gold deposit here in British Columbia. I believe that’s something like 8Moz in the reserve categories now, which was, of course, a great discovery.

And then Chris York, our VP Exploration, manages all of the exploration work in Nevada, joined us from Hekla, where he was managing much of their exploration programs in Nevada. He joined us from that company about 3-years ago now. So right now, our company is very built fit for purpose, as we try to add value through the drill bit and through exploration success.

And we’ve been quite successful so far. Okay, excellent. Well, congrats on your success so far.

Galen, where can we learn more about your company and follow company updates? Yeah, of course. So our website is sumasilver.com. And we’re also very active on Twitter and LinkedIn, just add Sumasilver. Okay, good.

Thanks for your time today. Okay, great. Thank you, David.

Thank you for watching. Don’t forget to like and subscribe.