Silver’s Structural Deficit: What the Demand Cycle Ahead Means for Investors

This article is disseminated on behalf of Aftermath Silver Ltd., Metallic Minerals Corp., Minaurum Silver Inc., Kootenay Silver Inc., and Peter Krauth.

At A Glance

• Silver has run a structural supply deficit for six consecutive years, with the cumulative shortfall between 2021 and 2025 exceeding 820 million ounces.
• Industrial fabrication now accounts for 60% of annual silver demand, driven by solar, semiconductors, and AI data centers, creating a demand floor that is largely unresponsive to price.
• 72% of silver is produced as a byproduct of base metal mining, meaning supply cannot respond quickly to rising silver prices.
• Exploration has shifted from major miners to smaller, venture-stage firms.
• Permitting and skilled labor, rather than capital availability, are the primary bottlenecks for advancing silver projects toward production.

The silver market has consumed more metal than it has produced for six consecutive years. Between 2021 and 2025, the cumulative shortfall exceeded 820 million ounces, roughly equivalent to an entire year of global mine output. With demand continuing to outpace supply, the market is projected to remain in deficit in 2026, with an estimated shortfall of approximately 67 million ounces.

This is not a temporary imbalance. Industrial demand continues to outpace supply growth, and the gap between the two is widening. We brought together silver company executives and capital markets experts to examine what this means for investors and where the industry may be headed.

Panel Overview

InvestorTV’s panel discussion, titled “The Silver Opportunity Set: Developers, Producers & the Demand Cycle Ahead,” featured Jeff Sundar, Capital Markets Advisor at Aftermath Silver; Greg Johnson, Chairman and CEO of Metallic Minerals Corp.; Darrell Rader, President and CEO of Minaurum Silver Inc.; James McDonald, President, CEO, and Director of Kootenay Silver; and Peter Krauth, author of The Great Silver Bull and editor of Silver Stock Investor and Silver Advisor. The panel mainly represents companies advancing silver projects across Mexico, the United States, and Canada.

The discussion explored silver’s evolving role as both an industrial and investment metal, the implications of sustained global supply deficits, and how developers and producers are positioning themselves to meet growing demand from sectors such as renewable energy and emerging technologies.

The Demand Side: Industrial Silver Is No Longer Optional

Silver’s demand profile has fundamentally shifted. As moderator and consulting geologist Jon Franklin noted, “This is no longer about jewellery and retail coins, but industrial fabrication now accounts for 60% of that total.” In 2024, solar photovoltaics alone command nearly one-third of global industrial silver use. AI-powered data centers are adding a new layer of demand that did not exist in previous cycles. 

What makes this demand different is its inelasticity. Industrial consumers such as solar manufacturers, semiconductor producers, and data center operators cannot simply reduce silver usage in response to higher prices. The metal is embedded within the product itself.

For Krauth, this shift is already visible in the physical market. He noted that while Western bullion dealers continue to be net buyers, the opposite is occurring in Asia, where strong demand is driving dealers to sell more into the market. This suggests that physical demand, particularly in Eastern markets, is actively drawing down available inventories.

The Supply Side: Constrained

While demand for silver remains strong, Johnson described the market as supply-constrained, shaped not just by rising consumption but also by the industry’s limited ability to bring on new supply. According to the US Geological Survey, approximately 72% of all silver mined globally is produced as a byproduct of copper, gold, zinc, and lead mining. 

A key issue is the lack of new discoveries. Over the past decade, Johnson noted that the mining sector has identified fewer silver deposits.

Even when capital returns to the sector, supply cannot respond quickly. Johnson noted that bringing a discovery into production typically takes 10 to 15 years, highlighting the structural lag between price signals and new output.

Rader reinforced this point from an operational perspective. “Permits are number one,” he said, pointing to regulatory and community-related constraints as key bottlenecks in project development. Beyond permitting, the industry also faces challenges in securing labor, especially experienced operating teams.

McDonald added that success in this environment depends heavily on execution. “Back the rider, not the horse,” he said, emphasizing the importance of experienced management teams capable of navigating long development cycles.

Silver’s Junior Tier

Exploration has largely shifted from major miners to smaller, venture-stage firms, creating a thin pipeline of projects capable of advancing toward production. As Johnson noted, the industry increasingly resembles pharmaceutical biotech: large companies excel at building and operating mines, while exploration is left to juniors.

According to Krauth, silver producers currently trade at approximately 2.1x net asset value (NAV), reflecting a scarcity premium attached to the relatively small number of primary silver producers globally.

Johnson observed that the large-cap producer index is at all-time highs, adding that “there’s still room for the producers to go more with metal prices higher.” McDonald outlined what he sees as the likely sequence within the cycle: “The next thing that’ll happen is that the developers will start to move and then the explorers at the end of the day.” 

The companies on this panel are advancing silver projects at various stages of development:

• Aftermath Silver is advancing the Berenguela Project in southern Peru, which hosts 122 million ounces of silver in the measured and indicated category alongside significant copper and manganese credits, with a pre-feasibility study expected later in 2026.
• Metallic Minerals is advancing two projects: the Llata copper-silver-PGE project in Colorado, which expanded its resource by approximately 23%, and the Keno Silver Project in the Yukon, adjacent to Canada’s largest primary silver mine.
• Minaurum Silver is drilling at its fully permitted Alamos Silver Project in Sonora, Mexico, where a maiden resource of approximately 55 million ounces of silver equivalent has already been established.
• Kootenay Silver has made four discoveries in Mexico totaling 223 million silver equivalent ounces in the measured and indicated categories.

For investors navigating this space, portfolio construction matters. Sundar was direct: “Buying cheap is not always better…It’s important to think hard about what assets a com

“Buying cheap is not always better…It’s important to think hard about what assets a company actually owns and what supports the market cap.”Jeff Sundar, Capital Markets Advisor at Aftermath Silver

Jeff Sundar, Capital Markets Advisor at Aftermath Silver

Strategic Implications: Silver, Supply Chains, and the Policy Shift

Silver now appears on the US critical minerals list. The industrial applications driving silver demand, including solar panels, EV batteries, and semiconductors, are the same sectors Western governments are actively trying to onshore.

This policy tailwind is real but slow-moving. Government designations do not immediately translate into project financing or production decisions. What they do is reduce the long-term demand risk for companies advancing silver projects in stable, allied jurisdictions.

Companies that have invested early in community relationships and permitting are building competitive advantages that are difficult to replicate. Rader noted that Minaurum Silver began permitting at the same time it made its discovery, placing the permit timeline ahead of the project’s broader development schedule.

Silver’s Structural Deficit Is Becoming Harder to Ignore

The silver market’s structural dynamics are well documented. Six consecutive years of supply deficits, inelastic industrial demand, and a supply side that cannot respond quickly to price signals were central themes throughout the discussion, and the underlying data continue to reinforce them.