Alt Thinking December 31, 2024
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Ninepoint Silver Strategy

Ninepoint Silver Strategy
Investment Team
  • Ninepoint Partners Sub Advised by Sprott Asset Management (SAM)
    Ninepoint Partners Sub Advised by Sprott Asset Management (SAM)
    Sprott Asset Management LP is an alternative asset manager and a global leader in precious metal and real asset investments. Through its subsidiaries in Canada, the US and Asia, the Corporation is dedicated to providing investors with best-in-class investment strategies that include Exchange Listed Products, Alternative Asset Management and Private Resource Investments. The Corporation also operates Merchant Banking and Brokerage businesses in both Canada and the US. Sprott is based in Toront...
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Key Takeaways
  • Silver rose 21.46% during the year, reaching its highest price since 2012 at nearly $35/oz, driven by strong industrial demand and rising premiums, particularly in China.
  • Silver is expected to remain in a supply deficit for the fourth consecutive year in 2024, with demand outpacing supply.
  • Industrial silver demand is forecasted to increase by 7%, surpassing 700 million ounces for the first time.
  • Precious metals remain in a bull market, with silver highlighted as the standout opportunity for 2025 due to continued strong demand and undervalued mining equities.

Silver’s Outlook Remains Robust

Silver had a strong 2024, rising 21.46% through the year. The Silver Institute expects that silver will yet again be in a deficit for 2024 as robust industrial demand for silver is expected to continue. The supply demand deficit is expected to continue for the fourth consecutive year. During the first three quarters of 2024, strong demand for silver and rising premiums seen in China catalyzed a move to nearly $35 per ounce—the highest level since 2012. If it were not for the large pullback silver experienced in Q4, silver would have outperformed gold’s exceptional returns.

According to Philip Newman, Managing Director, and Sarah Tomlinson, Director of Mine Supply at Metals Focus, global silver demand is expected to reach 1.21 billion ounces in 2024. This growth is underpinned by record-breaking industrial consumption and a recovery in the jewelry and silverware sectors, while mine supply is anticipated to rise by just 1%.

"During the first three quarters of 2024, strong demand for silver and rising premiums seen in China catalyzed a move to nearly $35 per ounce—the highest level since 2012."

Industrial silver demand is forecasted to increase by 7% in 2024, surpassing 700 million ounces for the first time. This expansion is primarily driven by green economy applications, particularly within the solar energy sector. Additionally, the increasing sophistication of components in the automotive industry is expected to elevate silver usage. Other sectors are also forecasted to grow, with silver jewelry and silverware demand projected to rise by 5%, led by strong consumption in India. Jewelry demand in the United States is similarly expected to experience growth, according to Metals Focus.

Exchange-traded products (ETPs) are on track to record their first annual inflows in three years, bolstered by expectations of Federal Reserve rate cuts, periods of dollar depreciation, and declining bond yields, which have enhanced silver’s attractiveness as an investment. However, physical investment in silver, including coins and bars, is expected to decline by 15% to a four-year low of 208 million ounces. This decline is largely concentrated in the United States, where coin and bar demand has fallen by 40%, reflecting the absence of new crises to drive investment.

Amid rising demand, global mine production is projected to grow modestly by 1% year-over-year, reaching 837 million ounces. Silver’s supply demand deficit is highlighted by limited growth in silver mine production versus demand that continues to outpace supply. We are likely to witness yet another year of silver deficit in 2025, which in turn points towards a potential for a silver supply squeeze as above ground stockpiles reach precipitously low levels. We saw an analogue of this play out in palladium. As demand outgrew supply without a supply response, palladium ran from ~$520/oz in 2016 to north of $3000/oz in 2021.

Miners continue benefiting from record margins

Through 2024, gold averaged $2388/ounce while silver averaged just over $28/ounce. Despite the weakness in gold and silver during Q4, both metals were trading above their 2024 averages. The strength in gold and silver have been a boon for producers who are expected to generate record profit margins in 2024 at prevailing metal prices while also delivering strong EPS and FCF growth. Valuation multiples remain historically low as general investors have not ventured into precious metal equities. We believe general investors remain hypnotized to the AI/tech flame. In the meantime, precious metal equities have continued to post strong price returns while sporting the sweet combination of low multiples and rising earnings.

Precious Metals Miners Valuations in the Trough vs Buoyant Valuations on the S&P 500
Source: Bloomberg, Sprott

It is important not to lose sight of the big picture here. We are in a precious metals bull market and the all-round performance of precious metals through 2024 will likely be seen as an opportune entry point.

We remain bullish towards silver above all things precious in 2025. 

 

Maria Smirnova and Shree Kargutkar 
Sprott Asset Management
Sub-advisor to the Ninepoint Silver Equities Fund and the Ninepoint Silver Bullion Fund

NINEPOINT SILVER BULLION FUND - COMPOUNDED RETURNS¹ AS OF DECEMBER 31, 2024 (SERIES F NPP326) | INCEPTION DATE: MAY 9, 2011

MTD

YTD

3M

6M

1YR

3YR

5YR

10YR

Inception

Fund

-3.05%

30.28%

-1.45%

3.78%

30.28%

10.59%

10.79%

6.67%

-0.98%

NINEPOINT SILVER EQUITIES FUND - COMPOUNDED RETURNS¹ AS OF DECEMBER 31, 2024 (SERIES F NPP866) | INCEPTION DATE: FEBRUARY 28, 2012

MTD

YTD

3M

6M

1YR

3YR

5YR

10YR

Inception

Fund

-8.71%

18.25%

-7.76%

2.75%

18.25%

-7.80%

1.30%

5.47%

-1.87%
All Funds
  • NPP326
    (Series F)
    Mutual Funds Bullion
    $9.70 -$0.11 (-1.14%)
    As at 2/21/2025
    Growth of $10,000 Invested as at 1/31/2025
    Performance as at 1/31/2025
    1 Year
    45.74%
    3 Year
    15.18%
    5 Year
    12.16%
    10 Year
    5.68%
    Incept.1
    -0.33%
    1 Inception Date 5/9/2011
    Go To Fund

    All returns and fund details are a) based on Series F shares; b) net of fees; c) annualized if period is greater than one year; d) as at 1/31/2025. Top ten holdings, sector allocation and geographic allocation as at 1/31/2025. Top ten holdings based on % of net asset value. Sector allocation based on % of net asset value. Geographic allocation based on % of net asset value and excludes cash. Numbers may not add up due to rounding. Cash and cash equivalents include non-portfolio assets and/or liabilities.

    The rate of return is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of the investment fund or returns on investment in the investment fund.

    The Fund is generally exposed to the following risks: commodity risk; concentration risk; credit risk; currency risk; cybersecurity risk; derivatives risk; inflation risk; interest rate risk; market risk; series risk; sub-adviser risk; substantial securityholder risk; tax risk; uninsured losses risk.

    Ninepoint Partners LP is the investment manager to a number of funds (collectively, the “Funds”). Commissions, trailing commissions, management fees, performance fees (if any), and other expenses all may be associated with investing in the Funds. Please read the prospectus carefully before investing. The indicated rates of return for series F units of the Funds for the period ended 1/31/2025 are based on the historical annual compounded total returns including changes in unit value and reinvestment of all distributions or dividends and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. This communication does not constitute an offer to sell or solicitation to purchase securities of the Funds.

    The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial advisor to determine whether securities of the Fund may be lawfully sold in their jurisdiction.

    Ninepoint Partners LP: Toll Free: 1.866.299.9906. Dealer Services: CIBC Mellon GSSC Record Keeping Services: Toll Free: 1.877.358.0540

  • NPP866
    (Series F)
    Mutual Funds Sector Equity
    $8.61 -$0.41 (-4.55%)
    As at 2/21/2025
    Growth of $10,000 Invested as at 1/31/2025
    Performance as at 1/31/2025
    1 Year
    50.98%
    3 Year
    -0.60%
    5 Year
    4.76%
    10 Year
    4.93%
    Incept.1
    -0.83%
    1 Inception Date 2/28/2012
    Go To Fund

    All returns and fund details are a) based on Series F shares; b) net of fees; c) annualized if period is greater than one year; d) as at 1/31/2025. Top ten holdings, sector allocation and geographic allocation as at 1/31/2025. Top ten holdings based on % of net asset value. Sector allocation based on % of net asset value. Geographic allocation based on % of net asset value and excludes cash. Numbers may not add up due to rounding. Cash and cash equivalents include non-portfolio assets and/or liabilities.

    The rate of return is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of the investment fund or returns on investment in the investment fund.

    The Fund is generally exposed to the following risks: borrowing risk; commodity risk; concentration risk; currency risk; cybersecurity risk; derivatives risk; exchange traded funds risk; foreign investment risk; inflation risk; liquidity risk; market risk; performance fee risk; Rule 144A and other exempted securities risk; securities lending, repurchase and reverse repurchase transactions risk; series risk; short selling risk; small capitalization natural resource company risk; specific issuer risk; sub-adviser risk; substantial securityholder risk; tax risk; uninsured losses risk.

    Ninepoint Partners LP is the investment manager to a number of funds (collectively, the “Funds”). Commissions, trailing commissions, management fees, performance fees (if any), and other expenses all may be associated with investing in the Funds. Please read the prospectus carefully before investing. The indicated rates of return for series F units of the Funds for the period ended 1/31/2025 are based on the historical annual compounded total returns including changes in unit value and reinvestment of all distributions or dividends and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. This communication does not constitute an offer to sell or solicitation to purchase securities of the Funds.

    The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial advisor to determine whether securities of the Fund may be lawfully sold in their jurisdiction.

    Ninepoint Partners LP: Toll Free: 1.866.299.9906. Dealer Services: CIBC Mellon GSSC Record Keeping Services: Toll Free: 1.877.358.0540

1All returns and fund details are a) based on Series F shares; b) net of fees; c) annualized if period is greater than one year; d) as at 12/31/2024. 

The Ninepoint Silver Equities Fund is generally exposed to the following risks: borrowing risk; commodity risk; concentration risk; currency risk; cybersecurity risk; derivatives risk; exchange traded funds risk; foreign investment risk; inflation risk; liquidity risk; market risk; performance fee risk; Rule 144A and other exempted securities risk; securities lending, repurchase and reverse repurchase transactions risk; series risk; short selling risk; small capitalization natural resource company risk; specific issuer risk; sub-adviser risk; substantial securityholder risk; tax risk; uninsured losses risk.

The Ninepoint Silver Bullion Fund is generally exposed to the following risks: commodity risk; concentration risk; credit risk; currency risk; cybersecurity risk; derivatives risk; inflation risk; interest rate risk; market risk; series risk; sub-adviser risk; substantial securityholder risk; tax risk; uninsured losses risk.

Ninepoint Partners LP is the investment manager to the Ninepoint Funds (collectively, the “Funds”). Commissions, trailing commissions, management fees, performance fees (if any), and other expenses all may be associated with investing in the Funds. Please read the prospectus carefully before investing. The indicated rate of return for series F shares of the Fund for the period ended 12/31/2024 is based on the historical annual compounded total return including changes in share value and reinvestment of all distributions and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial advisor to determine whether securities of the Fund may be lawfully sold in their jurisdiction.

The opinions, estimates and projections (“information”) contained within this report are solely those of Ninepoint Partners LP and are subject to change without notice. Ninepoint Partners makes every effort to ensure that the information has been derived from sources believed to be reliable and accurate. However, Ninepoint Partners assumes no responsibility for any losses or damages, whether direct or indirect, which arise out of the use of this information. Ninepoint Partners is not under any obligation to update or keep current the information contained herein. The information should not be regarded by recipients as a substitute for the exercise of their own judgment. Please contact your own personal advisor on your particular circumstances.

Views expressed regarding a particular company, security, industry or market sector should not be considered an indication of trading intent of any investment funds managed by Ninepoint Partners LP. Any reference to a particular company is for illustrative purposes only and should not to be considered as investment advice or a recommendation to buy or sell nor should it be considered as an indication of how the portfolio of any investment fund managed by Ninepoint Partners LP is or will be invested.

Ninepoint Partners LP and/ or its affiliates may collectively beneficially own/control 1% or more of any class of the equity securities of the issuers mentioned in this report. Ninepoint Partners LP and/or its affiliates may hold short position in any class of the equity securities of the issuers mentioned in this report. During the preceding 12 months, Ninepoint Partners LP and/or its affiliates may have received remuneration other than normal course investment advisory or trade execution services from the issuers mentioned in this report.