Silver Companies | Silver Wheaton in Tough Economic Times

Silver Wheaton

There has been a lot of significance attached to the price of silver and the price ratio of silver to gold, which usually stands historically at about 20 to 1. For some time now it has hovered at around 70 ounces of silver for every ounce of gold, and that has many silver investors thinking there is an inevitable rise that is bound to come.

An number of silver industry and silver stock watchers believe Silver Wheaton may be in a strong position to take advantage of this expected move, as its business practices lend themselves to being strong as a silver investment.

One such practice of the silver miner is to buy a percentage of silver that comes from other silver mines, and has significant reserves that are up 24 percent year over year.

So the Silver Corp has a record amount of silver in reserve, standing at 429.7 million ounces. If Silver Wheaton could have even more ounces on hand, with increases possibly being as high as 33 percent and attributable measured and indicated silver resources increased to 213.5 million ounces.

With the endless, careless government spending, there are increasing inflationary pressures that are expected and sure to push up the prices of silver and gold, and more than likely Silver wheaton will climb with it.

Another postive factor for the company is investors are expected to remain actively in pursuit of the metal, and should be net buyers of silver this year, with projections of about 182 million ounces exchanging hands. Global record sales of silver stands at 222.2 million ounces which were acquired in 1980.

As far as industrial demand, it fell in 2008 to 701.2 million ounces, a decline of 3.1 percent from the 724 ounces in 2007. Higher silver prices and a tougher economic climate were a major part of the fall in fabrication demand in 2008.

In 2009, projections are silver demand will plunge to 641 million ounces because of countries and companies cutting back on buying.

Much of the product demand for items using silver like photography, silverweare, batteries, jewelry and electronics are expected to continue to be slow, putting downward pressure on demand.

Taking all of that into account, it seems its more the investors that will decide silver prices this year, more than industrial demand. If tough economic times and uncertainty remain for some time, investors will continually look for safety in both silver and gold. That should remain for the rest of 2009 and into next year.

For last year, overall silver supply is estimated to have risen to over 800 million ounces.

Last year silver mining production increased by around 14 million ounces over the year before, while secondary supply rose by about 11 million ounces. That could rise even more under the present conditions. As of 2008, silver investors were net buyers for the third straight year, and that should continue. In 2008 net buyers of silver were at the highest levels since the early part of the 1980s.

Again, all of this should play well to the positioning of Silver Wheaton and its usual practices to take advantage of this. They and other silver stocks should do well over the next year or so.

Just recently Silver Wheaton President and CEO John Shanahan, who was accepted in that position after serving an interim stint with the company since September 10, announced they have exercised a participation right to acquire 3,855,558 common shares of Revett Minerals, bringing its total percentage of shares owned in Revett to 16.4 percent.

Shanahan says he looks at it as a solid bakcing of Revett and a commitment over the long haul to increase production at the Troy Mine, while increasing the exploration stage at the Rock Creek project.

Silver Wheaton