Under pressure: Silver supply deficit faces further stress

“Prior to the introduction of the new export requirements, supply of physical silver was already tight,” said Checkan in a January 6 email. ‘Last year was the fifth straight year of deficit production, bringing the physical silver deficit to just under a quarter of a billion ounces … 230 million to be exact.”

Silver’s entrenched supply-side challenges are the product of several factors, he explained.

One is increasing demand for silver in the energy sector, whether from artificial intelligence data centers or cleantech applications, such as solar panels and electric vehicles.

That reality has merged with declining mine supply — it takes around a decade to bring a new silver discovery through to production, making it difficult to meet rising demand.

“Couple that with the fact that export restrictions (80 ton minimum of production, increased capital requirements, etc.) will take a significant portion of Chinese silver producers out of the mix for potential silver exports, and you get an immediate and significant supply stressor,” added Checkan.

Under China’s silver export restrictions, only 44 companies are licensed to send their silver to the global market.

Silver gains strategic metal status

China’s silver export restrictions are considered part of a broader trend of governments around the world tightening control over natural resources considered critical to industry and national security.

“The energy transition, the expansion of the solar industry, the development of electric vehicles and advances in high-precision electronics have steadily increased domestic demand for the metal.”

By placing silver under a strict state-controlled licensing system with designating approved exporters, the Chinese government is treating the metal in much the same vein as rare earths. Controlling supply of both commodities not only addresses its national economic goals, but also helps to control global markets as well.

The US also elevated silver to strategic metal status in November with its inclusion on its US Geological Survey’s critical minerals list due to its important role in building out advanced energy and defense technologies.

Silver’s inclusion on the list makes it a potential subject for a future Section 232 investigation — a formal process conducted by the Department of Commerce to determine if imports of certain products or materials are harming national security. The result of such proceedings could result in tariffs on silver.

What China’s silver restrictions mean for the market

It’s too early to determine the full impact of China’s new silver export restrictions, but there is potential for much tighter global supply, which could translate to increased price volatility for the white metal.

“The new regulatory framework limits exports exclusively to a small group of companies previously authorized by Chinese authorities. In practice, this scheme directly reduces the volume of silver available to international markets, as not all refining companies can obtain export permits,” wrote Di Giacomo.

“The importance of this measure is amplified by China’s dominant role in silver refining and processing, which gives it structural influence over global supply,’ he added.

That’s because China holds a very prominent position in the global silver market. The Asian nation is the world’s second largest silver producer, producing 3,300 metric tons of the metal in 2024.

It also hosts the third largest silver reserves at 70,000 metric tons.

China’s largest primary silver-producing operation is Silvercorp Metals’ (TSX:SVM,NYSEAMERICAN:SVM) Ying mine in Henan province, which yielded approximately 6.43 million ounces of silver in the company’s 2025 fiscal year. The asset has a mine life that is expected to last through 2037.

Although China follows Mexico in global silver production, it leads the world in globally traded refined silver, accounting for roughly 70 percent of the market. Silver exports out of China in 2024 reached a whopping US$3.8 billion.

China’s export curbs are sparking concerns about supply chain disruptions and higher costs for solar panels, electric vehicles and electronics makers worldwide. Commodities analyst Anton Kharitonov sees the potential for the silver price to rise as much as 30 percent over the next 12 months “if China applies these export rules strictly.’

“Looking ahead to the coming quarters, the silver market may operate under conditions of greater structural rigidity. If industrial demand maintains its growth pace and restrictions remain in place, any additional disruption to global supply could amplify price movements,” said XS.com’s Di Giacomo.

China’s silver export restrictions also have the potential to further widen the growing disconnect between silver prices in the physical and paper markets. Premiums are especially high in Asia and the Middle East.

For example, analyst Stjepan Kalinic wrote on January 5 that the heaviest‑traded Comex March 2026 contract closed on January 2 at US$72.265, while in Dubai the lowest price for a 1 ounce silver coin was US$99.93.

Key iron ore price drivers in 2025

All in all, prices for iron ore didn’t fare too badly in 2025.

The biggest factor affecting growth was a significant fall-off during the first half of the year as pressures mounted from a continuing slump in the Chinese property sector and the threat of US tariffs.

The Chinese real estate sector has been in steep decline since 2021, when two of the nation’s top developers — Country Garden and Evergrande — declared bankruptcy after incurring hundreds of billions of dollars in debt. Since then, the government has introduced various stimulus measures, but has failed to turn the sector around.

As mentioned, because of the sheer size of the property market in China, it is a significant demand driver for steel products and has an outsized influence on the global iron ore market.

Another noteworthy headwind for iron ore price levels this past year was the threat of US tariffs. In early April, US President Donald Trump announced his “Liberation Day” tariffs, which applied a 10 percent levy across the board, and threatened retaliatory tariffs to close trade deficits with most countries.

The move sparked fears of a global recession and triggered a rout in equities and commodities markets, sending prices plunging. However, most markets rebounded quickly as plans were dialed back after a squeeze in the bond market that sent 10 year treasury yields up by more than half a percentage point.

Further iron ore price pressures came later in the year, when the massive Simandou mine in Guinea shipped its first iron ore, destined for smelters in China, on December 2.

Two consortia of companies own the mine. Blocks three and four have a 45/40/15 ownership split between Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO), Chinalco and the Guinea government, and blocks one and two have a 45/35/20 split between Winning International, China Hongquiao Group (HKEX:1378,OTCPL:CHHQF) and United Mining Supply.

The mine will ramp up production over the next 30 months, and is expected to produce 15 million to 20 million MT in 2026 and 40 million to 50 million MT in 2027.

Iron ore price forecast for 2026

Sardain expects iron ore prices to remain muted in 2026.

“We believe that price should drop below the US$100 per MT mark, although it could stay above this level in H1 due to seasonality … so, overall, prices staying between US$100 to US$105 per MT in H1, then declining below US$100 per MT in H2, with the ramp-up of the Simandou mine being a determining factor,” he said.

This is largely in line with estimates from other firms. BMI is predicting a 2026 price of US$95, while RBC Capital Markets sees iron ore averaging US$98; the overall consensus stands at US$94.

Q1: Cobalt moves from glut to supply shock

As mentioned, cobalt metal prices hit their weakest level since 2016 in January. Global mine output had more than doubled over five years, far outpacing demand growth from electric vehicles and other end uses.

That dynamic changed abruptly in late February, when the DRC — which supplies roughly three-quarters of the world’s cobalt — imposed a four month suspension on cobalt hydroxide exports.

The news lifted cobalt from US$24,495 at the start of the year to above US$34,000 by the end of March, with intra-month highs nearing US$36,300. The move marked the sector’s first meaningful rebound in nearly two years.

As the DRC exhibited control over cobalt supply, the market began to look to the world’s second largest cobalt-producing nation: Indonesia. Indonesia’s cobalt output is largely a by-product of its laterite nickel industry, produced through high-pressure acid leaching (HPAL) plants that process nickel-rich ores.

These facilities generate mixed hydroxide precipitate (MHP), an intermediate containing both nickel and cobalt that can be further refined into battery-grade materials. The model has enabled Indonesia to rapidly scale its cobalt supply, leveraging its dominant nickel position and integrated processing infrastructure.

Indonesia produced about 31,000 metric tons of cobalt in 2024 — roughly 10 percent of global supply — cementing its position as the world’s second largest producer behind the DRC.

Output growth is being driven by HPAL projects targeting up to 500,000 tons per annum (tpa) of mixed hydroxide precipitate, potentially yielding 50,000 tpa of cobalt, though scaling up may prove challenging.

Indonesian MHP, a lower-cost intermediate that is rich in nickel and cobalt, is increasingly viewed by Chinese refiners as a substitute for DRC-sourced cobalt hydroxide.

Q2 and Q3: A fragile equilibrium forms

The DRC’s export ban continued to underpin prices through the second quarter.

Standard-grade cobalt metal was trading near US$15 to US$16 per pound at the time, while cobalt sulfate posted even sharper gains. Despite the rally, sentiment remained cautious. Chinese refiners drew on existing inventories, and trade data showed cobalt units still flowing into China, particularly from Indonesia.

By June, prices had begun to ease as uncertainty mounted over how long the DRC would maintain controls.

Although China imported significant volumes earlier in the year, analysts warned Indonesian supply would be insufficient to fully offset reduced DRC cobalt shipments. Later that month, the DRC extended its export restrictions through September, reinforcing expectations that the market would move toward balance.

By mid-year, Chinese import data confirmed the impact — cobalt hydroxide inflows had fallen sharply, with analysts projecting constrained refinery feed into late 2025 or early 2026.

Prices stabilized in a broad US$33,000 to US$37,000 range through Q3, supported by tightening supply and diminishing inventories. Market participants increasingly viewed the DRC’s actions as a structural shift rather than a temporary correction, signaling the end of the cobalt surplus that had defined the previous two years.

By late 2025, the cobalt market had transformed from one of chronic oversupply to one approaching equilibrium — a reset driven not by demand growth, but by decisive supply-side intervention.

Q4: Cobalt quotas replace DRC ban, prices climb

After months of supply disruption, the DRC lifted its full cobalt export ban in mid-October, replacing it with a rigid quota system that will shape the market through 2026.

Under the new framework, annual DRC exports are capped at about 96,600 metric tons, roughly half of 2024 levels, with just 18,125 metric tons scheduled for shipment in Q4 2025.

This structural tightening helped sustain elevated prices that surged above US$47,000 by late October, levels not seen since early 2023, amid persistent feedstock shortages and constrained exports.

DRC quotas have provided a degree of market clarity, with major producers like CMOC Group (OTCPL:CMCLF) receiving significant allocations that underpin production plans. Despite robust output guidance, inventories outside the DRC remain tight, and market participants see continued upward price pressure as the quota system curtails supply.

“The DRC’s quota system is set to squeeze supply in the next two years — unless the country revises quotas higher,” wrote Fastmarkets’ Oliver Masson in a December market update.

“Prices are already considerably higher than they were at the beginning of the year, and they are likely to remain elevated for as long as current quota levels remain in force,’ he said. ‘Cobalt is mostly used in batteries, and the longer prices remain elevated, the more likely it is that EV manufacturers will seek to move to low-cobalt or cobalt-free chemistries where feasible. This could slow demand in the medium term.”

Cobalt price forecast for 2026

Looking ahead to 2026, analysts see the cobalt market shifting into a deficit as export caps bite and global feedstock availability shrinks. Fastmarkets projects a structural shortfall of about 10,700 metric tons against demand near 292,300 metric tons, driven by DRC quota limits and ongoing drawdowns of stocks.

Industry forecasters also anticipate that reduced shipments, combined with a stubbornly tight pipeline, will support stronger average prices next year. Some forecasts suggest cobalt could average near US$55,000 in 2026 as export quotas supplant the 2025 ban. Indonesian supply is emerging as a secondary source, with production climbing, but most analysts agree it will be insufficient to offset DRC constraints in the near term.

After a year of dramatic swings driven by supply policy in the DRC, 2026 is shaping up as the first sustained deficit environment in the cobalt market, with prices expected to remain elevated amid structural tightening.

“Prices have substantially recovered over 2025 and are expected to remain elevated in 2026 as the DRC limits exports,” said Aubry. “There is a significant potential upside risk as dwindling ex-DRC stocks present the risk of demand destruction towards the end of the year.”

Gold spot price chart, January 4 to 12, 2026.

The yellow metal’s latest rise adds to an ongoing historic run.

After starting 2025 around US$2,640, gold had risen to the US$3,200 level by April. It stayed within a fairly flat range until the end of August, when it launched higher once again, breaking US$4,300 in mid-October.

The price of gold took a breather following that move, even falling briefly below US$4,000; however, its retracement was neither as steep nor as long as many market watchers expected it to be.

Gold began gaining steam again in mid-November, and took off again in earnest at the end of 2025. This week it’s powering even higher along with silver, which posted its own all-time high of US$86.06 per ounce on Monday.

Both metals benefit from geopolitical tensions and economic uncertainty, which have been present on a global scale over the past the year. Interest rate cuts from the US Federal Reserve have provided support too, as have expectations of easier monetary policy after Fed Chair Jerome Powell’s term ends later this year.

This latest precious metals price surge comes as US President Donald Trump’s feud with the Fed over interest rates has taken an eyebrow-raising turn. On January 9, the US Department of Justice (DOJ) served the Fed with grand jury subpoenas targeting Powell with a criminal indictment.

The subpoenas to the central bank are related to Powell’s June 2025 testimony before the Senate Banking Committee concerning the Fed’s US$2.5 billion renovation of two Washington, DC, office buildings.

In a statement released on January 11, Powell said the DOJ investigation has nothing to do with the renovation project and everything to do with Trump’s goal to goad the Fed into lowering interest rates.

“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,” said Powell. “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.”

When asked about the probe by NBC News, Trump denied any involvement or knowledge of the investigation: “I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings.’

When further questioned if the investigation has anything to do with the pressure his administration is placing on the Fed to lower rates, Trump replied, “No. I wouldn’t even think of doing it that way. What should pressure him is the fact that rates are far too high. That’s the only pressure he’s got.”

Ozkardeskaya explained that the economic data currently coming out of US jobs and consumer price index reports would in normal situations lead the Fed to put rate cuts on hold.

“If the Fed can’t set policy based on economic data and inflation picks up, you want assets that temper inflation risks: gold, commodities, inflation-linked bonds, dividend-paying stocks, and tech,” she added.

“In my opinion, while these concerns do not imply an imminent collapse of the dollar, they are sufficient to reduce its appeal relative to gold, particularly during periods when markets demand clarity and credibility in monetary policy.”

The Trump administration’s criminal investigation into Powell adds another layer to the already-volatile economic and geopolitical environment that has investors seeking safe-haven assets.

Eugenia Mykuliak, founder and executive Director of B2PRIME Group, believes that a threat to Fed independence also poses significant risks to the US economy.

Gold also continues to benefit from strong central bank buying, while silver’s industrial side is attracting attention. Although it is valued as an investment metal, silver is key for technology such as solar panels.

Elsewhere in the precious metals space, platinum rose close to record highs on Monday, reaching US$2,360.50 per ounce. Palladium remains below its top price level, but is elevated above US$1,900 per ounce.

Investor Insight

Brixton Metals offers high-impact copper-gold discovery potential at its flagship Thorn Project, supported by strategic investment from BHP and partner-funded exploration on non-core assets with Ivanhoe Electric and Eldorado Gold, providing diversified upside, technical validation and non-dilutive funding.

Overview

Brixton Metals (TSXV:BBB,OTCQB:BBBXF,FRA:8BX1) is a Canadian mineral exploration company focused on copper, gold, silver, and critical minerals across North America. Its flagship Thorn Project in British Columbia is a district-scale project with multiple porphyry and epithermal targets.

In addition to Thorn, Brixton Metals is strategically advancing non-core projects through partnerships and option agreements with companies such as Ivanhoe Electric (NYSE American:IE;TSX:IE) and Eldorado Gold (TSX:ELD,NYSE:EGO). These partnerships provide partner-funded exploration, allowing Brixton Metals to retain upside exposure while conserving capital and strengthening its balance sheet. This approach enables the company to focus on high-impact targets while mitigating exploration risk.

Brixton Metals’ management team, led by chairman and CEO Gary R. Thompson, brings decades of experience in resource exploration, project development, and capital markets. The team’s expertise allows the company to efficiently advance multiple projects while maintaining exposure to a diversified portfolio of metals.

With global demand for copper and critical minerals set to surge over the next 25 years—driven by renewable energy, electrification, and industrial decarbonization—Brixton Metals is well positioned to capitalize on this green revolution. By combining discovery potential at its flagship project, strategic monetization of non-core assets, and disciplined exploration, Brixton Metals is advancing toward its next growth milestones while delivering significant value for investors.

Company Highlights

• Flagship Project: Thorn Project in BC, Canada – a fully owned, district scale copper-gold porphyry project on a 2,945 sq km claim block, on trend with BC’s prolific Golden Triangle.
• Pipeline Projects: Includes Langis Project (Ontario, Canada), Hog Heaven (Montana, USA), Atlin Goldfields (BC, Canada), providing diversified exposure to copper, gold and silver
• Partnerships: Strategic option agreements with tier-one companies such as Ivanhoe Electric and Eldorado Gold provide technical validation and fund exploration on non-core projects.
• Shareholder Base: Strategic investors include, but are not limited to BHP (approx. 14.8 percent) and Crescat Capital
• Management Expertise: Led by co-founder Gary Thompson, the management team has an average tenure of nearly 15 years, showing significant stability.
• 2026 Outlook: With a recently closed $12.2 million financing, the company is fully funded for a 2026 program that includes a winter drill campaign at the Langis Silver Project (Ontario) to capitalize on record-high silver prices.

Key Projects

Thorn Project (BC, Canada)

The Thorn Project is Brixton Metals’ flagship project, covering approximately 2,945 sq km in northwestern British Columbia and located on trend of the province’s Golden Triangle, renowned for world-class porphyry and epithermal systems. The project hosts porphyry-style alteration with copper, gold, silver, and molybdenum, with significant exploration potential. The project is accessible via a 45-minute flight from Whitehorse, Yukon.

Project Highlights:

• Camp Creek Corridor: An 8-kilometer-long northeast-southwest trending corridor that hosts multiple underexplored porphyry-style prospects.

• Trapper Target: High-grade gold intercepts demonstrate multiple vein systems with near-term resource potential.
• Catalyst Target: First-ever drilling confirms copper-gold porphyry mineralization, advancing the exploration pipeline.
• Tempest Target: Initial drilling reveals a multiphase porphyry system with copper-gold-silver-molybdenum mineralization and strong hydrothermal alteration.

Langis and Hudson Bay Projects (Ontario, Canada)

The Langis and Hudson Bay projects are primary silver-cobalt-nickel brownfield opportunities located in the historic Cobalt Mining District of Ontario, which has a regional production history of over 600 million ounces of silver. Both are past-producing, high-grade mines.

Since 2016, Brixton Metals has actively explored these sites, with drilling at Langis yielding over 220 intervals exceeding 100 g/t silver, including high-grade intercepts such as 15,436 g/t silver and 1.98 percent cobalt. The projects benefit from year-round road access and proximity to existing infrastructure, including a railway and the Electra Battery Metals cobalt refinery 10 km away.

Project Highlights:

• Historic Mineralization: High-grade silver and cobalt intercepts in historical drilling.
• Strategic Opportunity: Winter drill program to unlock additional shareholder value.
• Exploration Upside: Property hosts brownfield exploration targets with known mineralization.
• Critical Minerals Exposure: Adds battery metals to Brixton Metals’ diversified portfolio.

Hog Heaven Project (Montana, USA)

Located in western Montana, Hog Heaven is a historical silver-gold-copper property with significant porphyry potential. Hog Heaven is currently under an earn-in agreement where Ivanhoe Electric can earn up to 75 percent interest through staged cash payments and exploration expenditures. This arrangement provides funding for exploration while retaining Brixton Metals’ upside exposure.

The property contains multiple mineralized zones, including historical drill targets with notable copper, gold, and silver intercepts. Ivanhoe’s initial drilling has confirmed mineralization and highlighted the project’s potential for large-scale porphyry systems. Brixton retains exposure to exploration success while de-risking development costs.

Project Highlights:

• Option Agreement: Ivanhoe Electric can earn up to 75 percent through funding exploration expenditures of US$40 million and cash payments of US$4.5 million to Brixton.
• Mineralization: Historical drilling confirms copper, gold, and silver mineralization across multiple targets.
• Exploration Focus: Targets include porphyry-style and epithermal systems.

Atlin Goldfields Project (British Columbia, Canada)

The Atlin Goldfields Project is located in northwestern British Columbia, an area historically known for placer gold production, offering strong potential for hard-rock gold discoveries. Brixton Metals has optioned the project to Eldorado Gold, which is funding exploration activities under a structured earn-in agreement.

Exploration at Atlin focused on identifying orogenic and intrusion-related gold targets, with early work confirming continuity of mineralization in key areas. The property benefits from proximity to historic mining infrastructure and geology conducive to high-grade gold zones, providing an attractive exploration and growth opportunity.

Project Highlights:

• Option Agreement: Eldorado Gold can earn 100 percent interest through staged exploration and cash payments: C$1.1 million cash and $5.35 million in work over five years. At the end of the option period, Eldorado has the right to exercise the option to acquire 100 percent ownership for a final cash payment of C$7 million.
• Historic Production: Located near areas of historic placer gold production, indicating strong geological potential.
• Exploration Targets: Focused on orogenic and intrusion-related gold deposits with high-grade potential.
• Fully Funded Program: Partner-funded exploration reduces capital requirements while advancing project knowledge.

Management Team

Gary R. Thompson – Chairman, CEO, President and Director

Gary Thompson is a co-founder of Brixton Metals with over 25 years of experience in the resources sector, spanning precious and base metals, oil and gas, and geothermal energy. He has led public companies since 2006 and has held senior roles in both junior and major mining companies, including Newmont Mining, NovaGold Resources, and Encana Corporation. Thompson took Cayley Geothermal public in 2006 through the acquisition of Sierra Geothermal Power and served as CEO until its acquisition by Ram Power in 2010.

Cale Moodie – CFO and Director

Cale Moodie, a co-founder of Brixton Metals, has over 15 years of public markets experience. A CPA and serial entrepreneur, he has served as founder, CEO, CFO, director, and audit committee chair for multiple publicly traded companies on the TSXV and CSE. Moodie holds a Bachelor of Science from UBC and earned his CPA designation while working at KPMG in Vancouver. He has been involved in over $150 million in financings for resource and technology companies.

Michael Rapsch – Vice-president, Investor Relations

Michael Rapsch has over 18 years of capital markets experience in the resource sector, including senior roles in corporate communications and corporate development. He led investor relations and marketing programs for SilverCrest Mines until its acquisition by First Majestic in 2015, and from 2015 to 2018 managed investor relations for SilverCrest Metals, owner of the Las Chispas silver-gold project in Mexico. In 2019, he founded Cologne Communications, providing investor relations consulting to publicly traded resource companies, and has been instrumental in capital raises and market communications throughout his career.