why silver will continue to outperform gold.

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why silver will continue to outperform gold.

Economist Peter Schiff, President and Chief Global Strategist of Euro Pacific Capital Inc, made public this month his opinion on precious metals with silver continuing to outperform gold due to the fact silver has a historical ratio of 16:1 and was historically pegged in the Coinage Act of 1776 at 20:1, plus silver is favoured for possessing the properties of both a precious metal and an industrial metal.

Peter Schiff has made a number of accurate economic prediction over the last half decade from the real estate crash in December 2006 to the bullish rise of precious metals. With spot gold now at ~US$1,419/oz and Silver at ~US$35.28/oz the Gold-Silver ratio now sits at ~40:1. Schiff aptly pointed out that when the dollar was established in the Coinage Act of 1776 the Act essentially pegged the gold-silver relationship at 20:1 because the dollar was defined as '1/20th an ounce of gold or 1 ounce of silver." With the ratio up high like it is now Schiff believes it makes sense to favour silver. Schiff did however state "If it got to 25:1 or 30:1 then I would think you could certainly back-off".

Peter Schiff offered insight into how he views ownership of physical precious metal versus ownership via equities (in related mining stocks) - Schiff believes people should own both and stated he is weighted towards equities; "I have more of my money in investments in gold mining companies than I do bullion." Schiff sees the physical metal as representing stored value (money), whereas mining companies are 'investments'; a precious metal mining company takes on risks in exchange for the reward that comes with discovery and value creation from when it takes gold and/or silver that is buried in the ground and brings it out of the ground where it has practical value. Schiff views his mining stocks as a shareholder in these companies saying "I own the ounces they have in their reserve in the ground, part of which you own".

Schiff did not offer specific investment vehicles to capitalize on however Market Equities Research Group offers below some possible ways for exposure to precious metals including a review of Abcourt Mines Inc. a unique Canadian-based mineral exploration mining company with two near term production scenarios in northwestern Quebec.

A full review of Abcourt is available at http://www.miningmarketwatch.net/abi.htm online.

Simple ways to gain exposure to precious metals are to buy a senior producer focused ETF such as Market Vectors-Gold Miners (GDX), Global X Silver Miners ETF (SIL), or a junior focused ETF such as Market Vectors Junior Gold (&Silver) Miners ETF (GDXJ). However the problem with these ETFs is that they funnel attention to a select few companies whereas there is a large universe of fast growing gold and silver stocks that offer exceptional risk-reward scenarios. One such company that appears poised for upside share price appreciation in 2011 is Abcourt Mines Inc. which has two projects of significance located in stable, mining friendly Quebec, Canada. The current infrastructure value alone on Abcourt's two quality past producing projects is over $CDN20M; the current market cap of Abcourt is close to its infrastructure valuation alone, ignoring the sizeable economically recoverable resource deposits (1 billion+ dollars in Zinc and silver alone) that are wide open for expansion, and the 215K+ oz gold resources at Elder.

Both of Abcourt's projects have significant inherent resource value and currently undergoing programs to expand the resource base and improve metrics:

1) Elder Gold Property: An advanced past producing gold mine project with equipment and infrastructure in place, 215,758 ounces gold in all categories, a drilling program that will see 10,000m drilled in 2011 from surface and the dewatering of the mine. The dewatering is a ~nine month process that will reexpose the the vein and set up for reopening of Elder for gold mining within 18 - 24 months, with by then management is confident at least a doubled gold resource.

2) Abcourt-Barvue Silver-Zinc Property: An advanced past producing open pit silver-zinc mine project with infrastructure in place, NI 43-101 compliant 19,644,354 ounces Silver, 278,820 Metric Tonnes Zinc, feasibility study on a 500 million lb. Zn, 13+ million ounce Ag orebody over a 13 year minelife, plus recent developments and improved metrics that appear to justify upgrading plans from 650,000 TPY (tonnes per year) operation to 1 million TPY.

Shares of Abcourt are poised to move higher as they are currently trading at less than $0.04 per Zn-equivalent lb found at the Abcourt-Barvue project alone, a level generally attributed to earlier stage exploration companies with resources. The current share price is only attributing value to the in-ground zinc resources at the Abcourt-Barvue project - ignoring its large ~20M oz silver resources, the 215K+ oz gold resources at Elder, other properties and the significant infrastructure the Company possesses from when it was a past producer at the silver-zinc operation and the Elder Gold mine sites.

With only ~110M shares outstanding (151M fully diluted) and trading under CDN$0.25 shares of Abcourt are ripe for significant upside revaluation to better reflect the inherent resource value and immense gold, silver, and zinc potential; closer to $1.00 per share would seem a more appropriately discounted trading price.

This release may contain forward-looking statements regarding future events that involve risk and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual events or results. Articles, excerpts, commentary and reviews herein are for information purposes and are not solicitations to buy or sell any of the securities mentioned. Readers are referred to the terms of use, disclaimer and disclosure located at the above referenced URLs.