Royal Silver Company Panama Offer Unique Investment Opportunity

Posted by admin on Wednesday, August 3rd, 2011

There appears to be a new way to invest in silver, though those wishing to should conduct their own research before doing so. The Royal Silver Company, headquartered in Panama and with a wholly owned subsidiary in Bolivia, is offering a unique opportunity which promises a steady stream of 1 ounce silver coins and the return of capital invested on top.

Headquartered in Panama, its current silver operations are centred on its silver processing plant in Bolivia, though it has plans to expand into Peru and Mexico. It employs 75 people.

At its plant in Bolivia, the company uses an advanced hydro-metallurgical method for producing silver from mined ores. It employs zero emission technology to produce independently certified .99999 silver. To date they are best known for their blue throated macaw coins, that bear the image of one of the world’s rarest species of birds.

The investment opportunity they are offering is very much like a bond. The investor pays money up front, and through the life of the bond receives interest. When the bond matures, the company pays back the original capital. In this case, the interest payable is in the form of silver coins.

Royal Silver Company is offering 400 ‘memberships’ at a cost of $5,000 each, though this initial payment will rise to $5625 should silver move above $40 an ounce. In return, the member will receive a 1 ounce silver coin each month until the membership matures in 2 years. This may appeal to investors, because it is rare to find an investment that pays interest or dividends in physical silver.

The company’s website has more details, and explains the procedure for selling the membership before the two-year maturity date.

Silver: ETF’s Sector Of The Month In July

Friday’s article ‘Silver Investments Explained’ described how an Exchange Traded Fund works, and its appropriate that the ETF’s sector of the month for July was the white metal.

The debt crisis and ensuing flight to safe haven investments, has meant demand for instruments that give exposure to silver (and gold) has been strong. This has shown through in silver coin sales, the share prices of silver mines, the return to favour of silver after May’s pullback from all time highs, and now silver ETF’s have responded positively.

Up around 18% in July, and approximately 30% year to date, silver has put in an impressive investment performance despite the May decline. There have been many factors pushing the price of silver northwards: the debt situation as already stated and the US Federal Reserve’s Quantitative Easing policies, and demand form China have all contrived to make silver in vogue again.

Even though the US debt ceiling crisis has been averted – at least for the time being – around the corner stands the spectre of further quantitative easing in the US, and a possible downgrading of the credit rating of the United States will underpin the silver price in the near term.

Why A Credit Downgrade Is Good For Silver

The USA benefits from a AAA rating, and many large investment funds are required to invest only in funds that are AAA rated. If the US loses its AAA rating, this will mean that the holdings of US Treasuries would have to be sold by those funds that are only permitted to invest in AAA rated securities.

This will be bearish for those securities, and could lead to a sell off of equities and the US dollar. Such moves would be bullish for gold and silver, however, as investment funds are switched to the precious metals.

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