Silver Conference Featuring Maria Smirnova, Sprott CIO

February 14, 2026 | (18 mins 56 secs)

Maria Smirnova, Sprott Chief Investment Officer, joins James Connor of Bloor Street Capital to discuss Sprott's outlook on silver. Smirnova views recent gold and silver volatility as a healthy correction in a bull market, driven by strong fundamentals like supply deficits and rising global demand rather than speculative excess. Smirnova outlines Sprott’s long-term, disciplined approach and stresses patience and conviction.

Video Transcript

James Connor: Maria, thank you very much for joining us today. You are the Senior Portfolio Manager and Chief Investment Officer at Sprott Asset Management, and the perfect person to speak to about precious metals. But before we dive into your methodology, why don't I first ask you about the volatility we've been seeing in markets lately? Silver started the year at $70 an ounce and went as high as $120. Then, one day, we saw a 30% pullback, the largest single-day pullback since 1980. We continue to see these metals come under pressure here. Do you have concerns about the sustainability of this rally going forward?

Maria Smirnova: Hello everyone, and thank you very much for joining me. Volatility for portfolio managers can be good or negative. You always wonder how you will come out on the other end. But I think for us, we're long-term believers in gold and silver. From that perspective, we are pretty much fully invested at all times. We sit and watch what happens. We don't really concern ourselves with the short-term swings. Of course, the rise in gold and silver towards the end of last year and the beginning of this year was spectacular. One could argue that things may have gotten overheated.

From that perspective, I always say nothing goes up in a straight line. You do need a longer-term view, and so do we. I think we go from there. Am I concerned? I actually like pullbacks. Pullbacks are good because you can add to your positions, and you can rethink your positions. I think volatility could be a good thing in this case.

James Connor: If I'm hearing you correctly, the pullback we have seen over the last week or two, you're seeing it as an opportunity?

Maria Smirnova: I believe it is an opportunity for investors who, maybe in January, people began chasing, particularly silver. Let's see how this plays out and settles. But silver just went on sale. Gold just went on sale. You can think of it that way. Certainly, for those interested in the sector or space, this could be an opportunity to add to their positions.

James Connor: Maria, as I mentioned, we saw a day recently where silver dropped 30% in one day, but the biggest drop was in 1980 when it fell 63%. It was a totally different environment at that time. It had to do with the Hunt Brothers, changes in margin requirements and other issues. But in the ensuing months, silver dropped 70% from its peak. Do you see this happening now?

Maria Smirnova: That's a great question. You're referring to the famous Silver Thursday, when, as you mentioned, the Hunt Brothers were forced to cover their positions, and they were trying to corner the market. I think today is a very different situation, in that we don't have Hunt Brothers trying to corner the market. We got to the silver price we did squarely on the back of fundamentals, I would argue. It's a situation that's been building for years. We've been in deficit in the silver market. We are not aware of a Hunt Brother-type situation.

At the end of last year, we saw much higher retail demand, particularly for coins and bars. A lot of demand was driven by China, India, and even the Middle East. It's a very different situation, and to us, silver has long-term fundamentals. Demand is growing, and investment demand has been growing alongside industrial demand, whereas supply has been stagnant to declining. It's a very different situation, and I would be very surprised if silver lost 70% of its value again. What has happened over the last couple of days and weeks is a correction, and they're very different situations.

James Connor: I'm sure the market now is significantly larger than it was back in the 1980s, so it would be that much harder to manipulate.

Maria Smirnova: It is still a very small market. If you think about it, we produce about a billion ounces. We have a supply of about a billion ounces a year times $80. That's $80 billion. It's nothing in comparison to some other markets. Individual companies are traded for trillions of dollars in the market. Silver is still a very small market, and that's partly why it's so volatile: it doesn't take much money to push the price up or down.

James Connor: Why don't we move on now and look at equities and how you value them? Why don't we just start with a top-down approach? What are your primary criteria for picking equities?

Maria Smirnova: We manage various portfolios, and the criteria will depend slightly on the portfolio. But we do look around the world. We invest in North American companies, as well as companies listed in London and Australia. There are certainly size and liquidity constraints, and these depend on the company's stage. I think how we view an exploration company will differ from how we view a production company.

James Connor: You mentioned that there are size constraints, and I hear this from a lot of buy-side people. But do you have a minimum market cap you look for before making an investment?

Maria Smirnova: We don't have a minimum market cap. Maybe a couple of hundred million dollars at least, but it's more about the liquidity of the name. We have some portfolios that need a certain size to reach critical mass. Otherwise, adding a new name won't make a difference. It is also about how quickly we can trade it. We do look at liquidity in particular.

James Connor: If I'm hearing you correctly, you have to be able to buy the name, but you have to be able to sell the name, too. To do that, you need liquidity.

Maria Smirnova: Absolutely.

James Connor: What about jurisdiction? Are there regions that you stay away from?

Maria Smirnova: As I mentioned, we do go global, but there are certainly some jurisdictions that we don't touch. For example, some areas in Africa and some in Asia. We do go to Latin America and North America. We publish a map on our website at sprott.com, and that's where we rank: not every country in the world, but many countries. We give them a ranking from 1 to 5, and anyone can go and pull it up online [see Sprott Heat Map].

James Connor: What about valuation? Maybe you can speak to how you value an explorer, a developer and a producer.

Maria Smirnova: If we're looking at an earlier-stage company, an exploration company, they don't have production, they don't have cash flows or earnings. In that case, we pay much greater attention to the deposit itself. In any company, we look at management, capital structure, cash levels and balance sheet. But if we're looking specifically at the start of the chain at exploration, we pay a lot of attention to geology and metallurgy. I always say, "How big can it get?"

Basically, we're looking for things that can become a sizable mine. I'm not interested in something that can produce a small amount of gold, because there's not much room for error. There's very little margin for error, in fact. I try to look for size, quality and jurisdiction. There are a lot of factors. Infrastructure is also important. Where the deposit is located in terms of access to water, power and roads. There are many factors we consider. As we move up the chain to development and then production, we start layering on a potential mine plan, cash flow and free cash flow generation.

That stems from the beginning, from the quality and size of the deposit. In terms of what metrics we look at, we look across the board from price-to-NAV to price-to-cash flow and free cash flow. We are also increasingly challenging management teams to provide us with per-share metrics. I think someone like Agnico Eagle Mines Ltd. (Agnico) talks about that. More companies are talking about their per-share metrics, which is fantastic. But we would like to make sure that management teams emphasize building mines in a capital-responsible manner, that they don't dilute shareholders too much and that they use debt where appropriate. There are many things we consider.

James Connor: What gold and silver prices do you use to value equities? Are you using spot, or do you use a discount to spot?

Maria Smirnova: At any given point in time, I will use something close to spot. The reason for that, for me, is that I'm not making an assumption about where gold or silver will be in a year or two years from now. That flat line is just something. I can compare a lot of different estimates and different companies. It just equalizes everyone in that.

James Connor: Maria, how many names are in your portfolio?

Maria Smirnova: It varies, but our goal is usually to have 30-40 names in the portfolio. Not too few where you're not diversified, but also not too many where you can't track what the company is doing, what news they have coming up, etc. We find that 30 to 40 is usually a good size, allowing you to layer production, development and exploration. You can vary by jurisdiction. It gives you enough room to play with the various factors. Like I said, at the same time, you're still able to focus in, and our team can cover the names quite nicely.

James Connor: A big part of your job is boots on the ground, going out to the site and checking out the various operations. How many site visits would you do in a given year?

Maria Smirnova: We have a team of about five individuals who are involved day to day. I'm not sure how many a year. I know Justin does quite a few. I try to get out. We all try to get out and do a few a year, I would say. We also don't want to be out of the office too much, but we do try to be smart about it. Like I always say, I like to combine site visits. If I'm going to a foreign country, especially, I'd like to see a bunch of things in one week so I can make it productive and efficient.

James Connor: I want your view on juniors versus producers. We saw many major names, like Newmont Corporation (Newmont) and Agnico, reach all-time highs, but many juniors have not. I'm just going to use the TSXV as a basis for comparison. It's currently trading around $1,100, give or take, but still below the high that we saw in 2011, which was $2,400. Does this tell you juniors are still cheap?

Maria Smirnova: Juniors are still cheaper. Even if we look at price-to-NAV, which is probably the easiest way to compare seniors to juniors, they are trading at a discount relative to seniors. That's natural because, again, as you progress your company through its stage of development, your valuation should increase as you move into production. If you don't have production, you're not going to trade at the same multiple. Now, that also shows me we're not at the market peak. I would expect the juniors to be flying high. If that were to happen, I would think that we're peaking, really. The fact that we're not doing that tells me we're still at the beginning of the bull market, not at the end.

James Connor: This discussion has been focused on precious metals, but I want to get your views on some other metals. The U.S. government has been very bullish on mining investment. They've made several equity investments in a few mining companies. They've also recently announced the formation of a $12 billion critical minerals reserve fund. They call it Project Vault, and it's going to invest in what they deem to be critical minerals. But what other metals besides gold and silver do you like?

Maria Smirnova: We do have products that give investors exposure to non-precious metals. Metals like copper, lithium and nickel. We invest in steel and various other things. If you asked me to highlight another metal, I would talk about copper. Copper is similar to silver in that there are few high-quality deposits. We've mined out a lot of the big copper deposits in the world. If you think about Escondida, etc, the big ones. Copper is also in a deficit situation like silver, and we like it going forward.

James Connor: Before we wrap it up, you were trained by one of the greatest investors in precious metals, and that is Eric Sprott. What was the most important thing he taught you?

Maria Smirnova: Eric pretty much taught me most of what I know. He truly did, and I was very fortunate to work with him. You know my question of how big it can get? That came directly from Eric. Eric is always interested in finding big deposits and big mines. He has placed his emphasis on grade, so how rich the ore is. He's an optimist, and I strive to be more like him in that sense. He believes in gold and silver very much, and he has for a long time. From that, he just always says it'll work out. He believes the stories, and if he likes the story, he'll go big. I think that's another lesson for me, that if something is working, you try to press that button more, and vice versa. I think he's taught me a lot, and those are the big things. Think big, be optimistic and increase the position if it's working.

James Connor: The other thing I always take away from Eric is that you have to be patient sometimes for it to work out.

Maria Smirnova: That's like any resource investor. We have to be patient.

James Connor: Sometimes you might have to wait five years.

Maria Smirnova: Mining is a long-cycle business. That's right.

James Connor: Maria, as we wrap up, there are a lot of investors out there that are watching this, and they're very concerned about the volatility we've seen in recent weeks. What would you say to them?

Maria Smirnova: I think we touched upon this in the beginning, but I will reiterate, mining is a volatile business. It goes through cycles. I do believe we are in a bull market cycle right now. Corrections are healthy. They take the air out of a bit, which is healthy to me. Use the volatility to your advantage. If you like something, be patient and add to your positions based on the volatility. Do your research on the metals as well. Don't forget, as investors, we wouldn't be doing what we're doing right now if we didn't believe in these things on a very fundamental, long-term basis. I think that's message number one. You need to invest in something you don't necessarily know inside out, but you need to invest in something you believe in. Sprott.com, our website, is a great resource for investors. Not only does it outline all the products we offer, which include many different products, but we also publish a lot. I say our marketing department is a machine. We do articles, webcasts, podcasts and Sprott Radio.

We try to educate investors about gold, silver, copper, uranium and all these wonderful things. I highly recommend that investors visit our website and explore it.

James Connor: Maria, this has been a great discussion. Once again, I want to thank you. Good luck in the markets.

Maria Smirnova: Thank you for having me.

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