Disseminated on behalf of Sierra Madre Gold & Silver Ltd.
Silver prices surged in December 2025, drawing new attention from investors, industrial users, and mining companies. On December 9, spot silver price broke the level of US$60 per troy ounce, marking a historic high for the metal.
Five Years of Shortage: Why Silver Supply Can’t Keep Up
The rally comes as the global silver market continues its longest streak of supply deficits in recent years. According to the 2025 World Silver Survey by Silver Institute, the global deficit in 2025 will persist, again, continuing a five‑year structural shortfall.
Mine production, meanwhile, remains largely flat. The Institute notes that the total mined silver supply in 2025 is expected to stay roughly at 813 million ounces, about the same as in prior years. Recycling provides some additional supply, but not enough to close the gap.
That persistent imbalance between supply and demand underpins much of the upward pressure on prices. As one analyst recently noted, silver is “quietly outperforming gold” because of structural deficit conditions and rising demand from renewable energy and industrial sectors.
Source: World Silver Survey 2025, The Silver Institute
Rising Demand: Industry Needs + Investor Interest
Demand for silver remains multifaceted. Industrial use, especially in electronics, photovoltaics (solar panels), green technology, and other sectors, continues to be a major driver. According to the 2025 survey, industrial fabrication hit a record, buoyed by strong demand from these sectors.
At the same time, investment demand has surged. Many investors are reallocating to silver, drawn by its dual role as both an industrial commodity and a hedge amid macroeconomic uncertainty, inflation concerns, and currency volatility.
Compared with the start of 2025, silver has nearly doubled in value – a dramatic return that outpaces many other precious metals, including gold.
The Supply Crunch and Why Prices Keep Rising
The year 2025 has seen sharp gains for silver. From early in the year, silver’s price more than doubled as the market tightened and demand surged.
At times in late November and early December, spot silver traded in the upper $50s, with intraday highs reaching or exceeding $58.84 per ounce. The December 9 breakout to the $60 level represents a new peak, marking a milestone for silver’s 2025 rally.
On December 11, after the markets opened, silver extended those gains, touching an intraday high of $64.2062 per ounce, a new historical all-time high.
Source: Bloomberg
What’s Behind the Surge?
Several factors are converging to support silver’s rally:
- Persistent supply deficit — mine production has stagnated while demand continues to grow, particularly from industrial sectors.
- Strong industrial demand — especially from sectors tied to renewable energy (solar), electronics, and emerging technologies that rely on silver’s conductive and other properties.
- Investor demand and macro trends — with economic uncertainty, inflationary pressures, and potential interest‑rate shifts, silver is once again being viewed as a hedge and store of value.
- Structural constraints on supply growth — silver is often a by‑product in mines for other metals; as such, higher prices do not always lead to proportionally greater new supply.
Analysts Speak: What’s Next for Silver in 2026
Industry forecasters predict a continued silver deficit through 2026. The Silver Institute forecasts ongoing silver deficits through 2026, with 2025’s projected shortfall alone at approximately 117 million ounces (3,660 tonnes)—one of the largest in recent years.
While some analysts see narrowing gaps ahead, persistent structural imbalances from stagnant mine production (~813 Moz annually) and record industrial demand continue to exert upward price pressure.
Rising demand from green technologies, industrial use, and investment are driving this rebalancing. Bank of America raised its 12-month silver target to $65 per ounce after real yields narrowed and ETF inflows strengthened. Major banks are even more bullish, with BNP Paribas suggesting silver could climb as high as $100 per ounce by the end of 2026 as investors seek safe-haven assets amid persistent inflation and geopolitical risks.
Potential Pitfalls: Risks That Could Stall the Rally
Despite the strong rally, the silver market is not without risks. Industrial demand, particularly for sectors like solar, may slow if companies find cheaper substitutes or reduce silver intensity due to higher prices. Indeed, some analysts expect silver demand to decline this year compared with prior years.
Investor demand could also wane if macroeconomic conditions change — for example, if interest rates rise, or inflation subsides, making non‑yielding metals like silver less attractive. Market sentiment and speculative flows remain a major variable.
Finally, while the structural supply deficit is real, supply responses (mine expansion, recycling, substitution) could eventually ease tightness. Though such adjustments tend to lag behind price moves because mining and processing silver takes time.
Beyond Investors: Silver’s Role in Industry and Green Tech
The surge in silver prices has consequences beyond investors. For industries relying on silver — electronics, solar energy, medical devices — cost pressures may rise. Conversely, mining companies stand to benefit, especially those with high‑grade, efficient operations.
For the broader global economy, silver’s rally signals renewed interest in “real assets” in a time of inflation, interest‑rate uncertainty, and structural shifts toward renewable energy and clean technology. Silver may be emerging as a strategic material once again.
Amid this tightening market and rising prices, attention is turning to producers capable of delivering high-grade, reliable silver supply, including Mexico-based Sierra Madre Gold and Silver, whose projects exemplify the type of production needed to meet growing industrial and investor demand.
Mexico’s Hidden Gem: Sierra Madre Gold and Silver
Sierra Madre Gold and Silver (TSX-V: SMV | OTCQX: SMVVF) is emerging as a key silver producer in Mexico. The company operates two major projects, both contributing to the global silver supply amid ongoing deficits.
La Guitarra Mine (State of Mexico)
La Guitarra, acquired from First Majestic Silver Corp., is a fully permitted and producing underground mine. Commercial production began in January 2025 at 500 tonnes per day, with expansion plans targeting up to 1,500 tonnes per day by 2027. The project could restore one of Mexico’s historically significant silver mines to prominence, providing immediate cash flow and operational experience for Sierra Madre.
Tepic Project: High-Grade Epithermal Gold-Silver Potential
The Tepic Project features a high-grade epithermal gold-silver deposit with extensive near-surface mineralization, offering significant exploration upside and multiple pathways for scalable development.
The company’s leadership team includes experienced mining professionals with a track record in developing large-scale silver projects, giving investors confidence in execution and operational efficiency.
Why Silver May Be the Strategic Metal of the Year
Together, Tepic and La Guitarra position Sierra Madre as a potentially significant silver supplier during a period of constrained global supply. Tepic’s projected annual production, combined with La Guitarra’s ramping output, demonstrates how high-grade, reliable projects can support industrial demand, renewable energy expansion, and investor appetite for silver.
With silver prices breaking historic highs and the global market facing its fifth consecutive year of deficit, the spotlight is firmly on both supply and demand dynamics. Industrial growth, renewable energy adoption, and investment inflows continue to drive demand, while constrained mine output and structural supply limitations keep the market tight.
Companies like Sierra Madre Gold and Silver demonstrate the type of high-grade, reliable production needed to stabilize supply chains, support industrial growth, and meet investor demand. In this environment, silver’s role as both a critical industrial metal and a strategic investment asset has never been more pronounced, signaling that the rally may have staying power well into 2026 and beyond.
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CAUTIONARY STATEMENT AND FORWARD-LOOKING INFORMATION
Certain statements contained in this news release may constitute “forward-looking information” within the meaning of applicable securities laws. Forward-looking information generally can be identified by words such as “anticipate,” “expect,” “estimate,” “forecast,” “plan,” and similar expressions suggesting future outcomes or events. Forward-looking information is based on current expectations of management; however, it is subject to known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those anticipated.
These factors include, without limitation, statements relating to the Company’s exploration and development plans, the potential of its mineral projects, financing activities, regulatory approvals, market conditions, and future objectives. Forward-looking information involves numerous risks and uncertainties and actual results might differ materially from results suggested in any forward-looking information. These risks and uncertainties include, among other things, market volatility, the state of financial markets for the Company’s securities, fluctuations in commodity prices, operational challenges, and changes in business plans.
Forward-looking information is based on several key expectations and assumptions, including, without limitation, that the Company will continue with its stated business objectives and will be able to raise additional capital as required. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, or intended.
There can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially. Accordingly, readers should not place undue reliance on forward-looking information. Additional information about risks and uncertainties is contained in the Company’s management’s discussion and analysis and annual information form for the year ended December 31, 2024, copies of which are available on SEDAR+ at www.sedarplus.ca.
The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. Forward-looking information reflects management’s current beliefs and is based on information currently available to the Company. The forward-looking information is made as of the date of this news release, and the Company assumes no obligation to update or revise such information to reflect new events or circumstances except as may be required by applicable law.
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