What CIBC thinks of silver miners

Because we at IKN Nerve Centre™ love you readers out there more than your own parents, we know you're all worried and fraught and het up about the current state of the silver market. So due to this supra-parental love we feel for you, the best thing to do is to share the report CIBC published ysterday May 2nd on the sector. 

You can download the 57 page 1.1Mb report by clicking this link right here, but to get you in the mood, here's a pasteout of the intro on page one. Please you be having nice day yes thankyou.

Indecent Silver Exposures
Can Rising Silver Prices Lift Lagging Equities?

• As of May 2, we are rolling out our new silver price deck. Our 2011 and 2012 silver prices move to $45/oz. (from $28/oz.) and $50/oz. (from $30/oz.), respectively. Our long-term silver price moves to $30/oz. from $20/oz. As expected, this causes some changes to our ratings.

• As of May 2, we are upgrading Silver Standard to SO from SP and Gammon Gold to SP from SU. We are also downgrading Allied Nevada to SP from SO and First Majestic and Silvercorp to SU from SP. Our top picks in the primary silver producer space remain Pan American and Fortuna Silver.

• Our detailed analysis of silver supply and demand reveals that no additional silver investment demand is required to maintain silver prices at, or near, current levels. However, our analysis of seasonal trading patterns urges caution in the silver space for the next few months.

• An analysis of the silver equities reveals that most are trading below 1x NAV when the forward curve is used. This implies that the market does not believe all the ounces drilled can be produced at spot prices. We concur, so our long-term silver price forecast remains well below spot.

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