(Kitco News) – Gold and silver‘s extraordinary bull-run in the last few months is attracting many new investors to the marketplace. For one mining CEO, the best advice he can give to these generalists is to pay attention to management teams.
In an interview with Kitco News, on the sidelines of the virtual Beaver Creek Precious Metals Summit, Eric Fier, chief executive officer of SilverCrest Mines, said that in the current environment, investors should pay attention to management teams more than projects. He added that with so much money flowing back into the exploration sector, good management teams know how to manage that capital effectively.
“Good management can take a bad project and do pretty [well] with it, but bad management can’t do much at all,” he said.
Fier said that investors should look at management teams that have successfully built projects and value for their shareholders.
Fier’s comments come as his company continues to work on “SilverCrest 2.0.” The original SilverCrest project was sold to First Majestic Silver Corp in 2015.
“The, sale to first majestic was an all-share deal in 2015; it turned out to be a billion-dollar deal,” he said.
The company is currently developing its Las Chispas property in Sonora, Mexico. Last year SilverCrest released a Preliminary Economic Assessment (PEA), which showed an initial mine life of 8.5 years. The PEA forecasted average annual production of 5.38 million ounces of silver and 55,700 ounces of gold.
Fier said that the company is currently finalizing its feasibility study, which it expects to release by the end of the year. Although the COVID-19 pandemic has created some delays for the company, he added that he expects to start mine development within two years.
Looking at the silver price, Fier said that he expects prices to continue to move higher. He added that he is paying attention to the gold/silver ratio, which has seen a drastic drop in the last few months.
Currently, the gold/silver ratio is trading around 72, down dramatically from the March record highs around 125 points. Fier said that the current ratio is a good indication that the precious metals are in a bull market. In the near-term, he added that he could see the ratio falling back to 50.
The second piece of advance Fier has for investors is to ignore the short-term volatility and pay attention to the long-term trends. He added that gold and silver’s current consolidation period is a time for the market to build new momentum for the next run higher.
“Every indication to me shows is that we’re going to rise up from here,” he said. “You got a lot of instability in the world; a lot more than you had a year ago. That pretty good for gold and silver. If you get a bad day or a bad week in the market, don’t be disappointed that you’re driven down. It’ll catch up; gold will catch up and you’ll rise again.”
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