As governments and companies worldwide shift their attention back to uranium as a clean energy source, some are now pivoting their sights towards a different metal – silver. And these voices are experienced in yellowcake, even anticipating its rise, as they helped set up the Sprott Physical Uranium Trust.
Peter Grosskopf, former CEO of Sprott Inc. and CEO of SCP Resource Finance LP, said that he sees silver as the new commodity of choice due to its growing demand.
“We’ve really liked, at SCP, finding markets that have been under invested in, and where investor interest and demand is turning,” Grosskopf said to S&P. “And I see that happening now in silver.”
Drawing a parallel between silver and uranium, Grosskopf and his team at SCP see market dynamic similarities between the two.
Uranium, which is currently experiencing a 16-year-high, was for a long stretch of time overlooked, but is now booming. The price of uranium has experienced a significant upward surge in the past few months, driven by factors such as COP28, new funding for US uranium enrichment, and supply shortages from the top two uranium mining companies.
In 2021, the Sprott Physical Uranium Trust (aided by Grosskopf and his team) launched and made significant purchases of the metal ahead of the current price surge. Grosskopf points to the potential for echoes of this in silver with higher silver loadings in next-generation solar panels and the tight supply situation as factors that make the silver sector attractive.
“The demand and supply is finally rolling over,” said Grosskopf.
Grosskopf revealed SCP Resource Finance, a mining finance advisory firm, will focus on silver equities in contrast to Sprott’s play for uranium, which has been in the physical commodity itself.
While some market experts anticipate less tension between supply and demand due to strong aboveground inventories and ongoing innovation in solar panels, Grosskopf remains bullish.
Grosskopf also sees increasing investor interest in precious metals like silver because of its hedge against government monetary policies, with central banks like China’s increasing their gold holdings in recent years.
Grosskopf expects that when this demand eventually flows into the silver market, it will flood it. He commented, “”When that (demand) trickles down to silver, the silver market explodes because it’s too small to handle all that investment demand.”
