If Silver rises to $USD25, Then gold would be in the $USD1400-1450 range. On the USD front I can see it weakening since there has been an inverse correlation between gold price and the USD strength. Just my guess but I would say AUD=0.8USD or USD = 1.25AUD. Essentially a $USD25 Silver price is $AUD31.25.
I agree that for plays such as Bowdens it will need a sustained period of Silver price being greater than $USD25 or $AUD31.25.
I think when KCN had the project the CAPEX was $AUD350m-400m ($USD350-400m as I remember the USD and AUD being on par). The Bell Potter research report is saying the new smaller scale is $AUD150m. The other issue is that how much of this $AUD150m will be debt financed and how much will be equity financed. I know most big banks are not lending for mining projects however there are still "sub-prime" mortgage but the interest rate will be close to 10-12% per annum. My guess is that SVL will do well if its 50% debt.
Ideally I think Bowdens will be really attractive with Silver Price being at $USD30 or $AUD36 (I factored that a higher precious metals price means lower USD so I used USD = 1.20AUD).
At a higher Silver Price especially at >$USD30 per ounce, If I was management just flog it off to an another interested party for say $AUD500m. SVL picked up the asset for $AUD25m (assuming SVL will pay $AUD5m to get the remaining 15% by September 30th). SVL raised $AUD38m (I am counting the last 3 capital raisings). To flog it off for $AUD500m+ (say $1 per share) would be phenomenal.
If there is a long term underlying $USD25-30 Silver Price, I can see that Silver will rally to $USD50-60 peak then have a pull back. Means Gold would likely rally to $USD2000-2200. Would love to see SVL share price when Silver Price is $USD50-60.
As for Silver Prices going to $USD1000 theories, I will bet you that the governments around the world will be confiscating Gold, Silver, Platinum as everything else with the economy would just go to crap. Western Governments will use the "its unpatriotic to hoard gold, silver, platinum" excuse. The Communist will just throw you in jail and take your wealth while claiming you are a menace to the "harmonial social fabric" BS. Gangster States like Russia will just take it because they just can.
Some of these commentators may be right that "Fundamentally" Silver should be $USD1,000 and Gold at $USD20,000 but if I am the government what are the odds that I let anarchy set in. Also if there is anarchy and a breakdown of law, its very tempting to find someone with physical gold, silver, platinum and just take it off them using an iron fist. Under this scenario would love to see how "fundamental or technical" analysis will help when a baseball bat clanks against one's head.
SVL Price at posting:
22.0¢ Sentiment: None Disclosure: Held
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