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SilverCrest Mines Inc.

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Silver Producers: A Call to Action
By Eric Sprott & David Baker
-- Sprott Asset Management --

As we approach the end of 2011, the silver spot price has admittedly endured a tougher road than we would have expected. And let's be honest - what investment firm on earth has pounded the table on silver harder than we have? After the orchesetrated silver sell-off in May 2011 (please see June 2011 MAAG article entitlted, "Caveat Venditor"), silver promptly rose back to US$40/oz where it consolidated nicely, only to drop back below US$30 within a two week span in late September.¹ The September sell-ff was partly due to the market's disappointment over Bernanke's Operation Twist, which sounded interesting but didn't involve any real money printing. Like the May sell-off before it, however, it was also exacerbated by a seemingly needless 21% margin rate hike by the CME on September 23rd, followed by a 20% margin hike by the Shanghai Gold Exchange - the CME's counterpart in China, three days later.

1. Sprott, Eric and Morris, Andrew (June 2011) "Caveat Venditor!". Sprott Asset Management LP. Retrieved from: http://www.sprott.com/Docs/MarketsataGlance/2011/0611128_Caveat%20Veditor_E_V14_WEB.pdf

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