What is the Silver Institute?

Silver Institute’s mission

In attempt to acquire information on the subject, we couldn’t not notice certain structural similarities to World Gold Council. And although not tit for tat, Silver Institute is an interesting case of yet another precious metals popularisator and propagator, focused entirely on silver market. But, while history and actions of o similar ‘golden’ entity - World Gold Council - seem to be well documented and accessible easy to be found, same could not be said on Silver Institute.

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And so, in its 990 / 990-EZ filings for fiscal year 2023, Silver Institute’s describes its general programs as: providing several services benefiting global silver industry, including increasing awareness and education about silver through its website, issuance of press releases, maintaining active social media program and releasing bi-monthly newsletter that highlights trends in the silver marketplace.

To above activities we should also add podcast ‘Talking silver’ and coordinated webinars on subjects important to the silver industry. Institute’s executive director appears in variety of podcasts and media, but also precious metal conferences, actively supporting and advocating for white metal. Worthy emphasizing, that Silver Institute monitors and reports on global technical developments that affect silver consumption. After all, technical usage is main source of demand for white metal.

Of course, Institute’s most acclaimed release is annual World Silver Survey. It’s being released with purpose (as Silver Institute describes):

...to bring timely and reliable silver supply and demand to our members, market participants, analysts and general public. The Breadth of the silver industry reads World Silver Survey, and the publication remains the most widely referenced and quoted annual report on the silver market.

Apart of this, Silver Institute periodically issues market trend reports on various aspects of silver demand. These are brief although detailed reports on different topics related to the silver market and authored by experts in their respective fields.

But Silver Institute is also present at where exactly silver is. During decades of its existence, it created market development programmes in Mexico, Peru (both, major silver suppliers), India and China (both, major silver consumers).

And so, to wrap it up, Silver Institute defines its goals as:

• To encourage development and uses of silver and silver products,

• To help develop markets for silver and its products,

• To foster research and development related to the present and prospective uses of silver,

• To collect and publish statistics and other information about production, distribution, marketing, consumption and the uses of silver and silver products,

• To spread knowledge and understanding of the uses of silver,

• And last but not least, to develop methods for improving the welfare of the silver industry.

All of that, in purpose of promoting usage of silver, which in effect should impact positively figures of Institute’s member entities, benefit sector in general, and of course, support price action, which is something, stackers and investors hope for.

The 1971 establishing case

On its website, Silver Institute introduces itself as a ‘nonprofit international association that draws its membership from across the breadth of the silver industry’. Among them are leading silver mining houses, refiners, bullion suppliers, manufacturers of silver products and wholesalers of silver investment products. It has been established in 1971 and serves as the industry’s voice in increasing public understanding of the many uses and values of silver.

What else had happen in August 1971? Infamous Nixon shock. On 15th of August 1971, US president Richard Nixon, among many things announced that day, unliterally suspended international convertibility of US dollar to gold.

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Now, what these two have in common? Silver wasn’t part of monetary system of Bretton Woods, although minted in 1935 silver Peace Dollars were in circulation. At the same time, USA had silver certificates (pre-war and 1957 issued) in the form of 1 USD notes circulating alongside Federal Reserve notes. Idea behind silver certificates was to provide 1:1 exchange mechanism, so upon exchange to Peace Dollar, paper note was being destroyed. We covered this subject in our analysis ‘History of the US silver dollar’. However, in the 60’s, keeping dollar pegged to gold became increasingly difficult task, due to growing number of imprinted USD. And this affected market price of silver – not pegged to dollar, but simply in certain intrinsic value to gold. In effect, this incentivised many savvy investors to exchange their paper silver certificates (nominal value 1 USD) to official silver coins (with nominal value 1 USD) but with silver content now being priced more than this and growing. Opportunity window ended officially in 1967, but exchanges were being conducted until mid-1968. Soon, silver showed what it was capable to, reaching 48,70 USD in early 1980 from approx. 1 USD. Since de-pegging in 1971, gold started doing the same (850 USD an ounce during that time).

For the context - this was a period of technology advancement and economies of scale. Larger mines and equipment were to be accompanied by increased adoption of ammonium nitrate, SAG mills and SXEW tech, which in effect improved supply. In addition – nowadays we’re used to dominance of South and Latin America in silver supply. But in the mid-60’s and through mid-70’s, it was USA and Canada dominating the environment. Demand for silver and its increasing price, was incentivised to create a body, which would propagate silver among general population or investors, and benefitting interests of silver miners. And this is historical background on how nonprofit corporation of Silver Institute has been created.

What ‘nonprofit’ means? If you’re looking to accomplish certain statutory objectives, as well as to make financial profit, then best choice to pick would be certain form of for-profit, llc or benefit corporation. However, if you are not looking for profit but rather statutory targets, then you should consider the benefits of forming a nonprofit company. Most nonprofits are formed to provide a benefit to the public, as opposed to clubs, cooperatives, etc. that are formed to benefit their members. So generally, Silver Institute follows its statutory mission as a non-profit corporation, subject of tax exemptions, and with its officers operating under limited liability.

Silver Institute is being registered in 1971 in Washington DC, USA, under address 1400 I Street NW 550. Although its legal domicile state remains New York. Mentioned two paragraphs earlier year 1971 serves here as not only establishing date but also in purpose of ‘ruling year’ in this case, which means year in which IRS gave organisation a tax-exempt status. As a registered non-profit entity, it operates with EIN number (23-7108453), but also under NTEE code (S41). This is National Taxonomy Exempt Entities system, used by US IRS to classify primary charitable activities of non-profit organisations. More specifically, IRS defines code S41 as to be associated to Chambers of Commerce & Business Leagues:

Organizations like chambers of commerce, business leagues and commercial trade associations whose members are businessmen and women and merchants who have affiliated for the purpose of promoting the general commercial interests of the community or the interests of their own trade.

Silver Institute’s Board and Members

So we established Silver Institute to be non-profit organisation. But to be more specific, back in the beginning of 21st century and earlier, it kept introducing itself as ‘Worldwide Association of Silver Miners, Refiners, and Fabricators & Manufacturers’. This section dropped in time from main page, remaining only in archived, historical versions of Institute’s website.

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For tax year 2023, Silver Institute consisted of 23 voting members of the governing body and 21 member organisations. During 2024, number of voting members increased by additional five, which were: The Australian Bullion Company, Bunker Hill Mining Corp, Glencore, Silver Bullion Pe Ltd and Sunshine Minting. There is only one class of membership. Each member in good standing is entitled to one vote on any and all matters discussed at member’s meetings.

And so, under Silver Institute’s list of members we’ll find following (we’ve added 2023 silver production if applicable):

• A-Mark Precious Metals, Inc. (trading company, member of LBMA),

• Andean Precious Metals (equivalent of 5.2 mln ounces, member of LBMA),

• Asahi Refining USA, Inc. (refiner, member of LBMA),

• The Australian Bullion Company (trader, LBMA member),

• Ava Global Logistics (transport services, LBMA affiliate member),

• Avino Silver and Gold Mines Ltd (equivalent of 2.4 mln oz),

• Brink’s Global Services USA Inc. (LBMA, full member, transport services),

• Bunker Hill Mining Corp. (project in development),

• Coeur Mining, Inc. (10 mln ounces in 2023),

• Dillon Gage Metals Division (trader, affiliate LBMA member),

• Endeavor Metals Group LLC (trader),

• Endeavour Silver Corp. (trader),

• Fresnillo Plc (54 mln ounces),

• Gatos Silver (8.8 mln oz in 2023),

• Glencore (20 mln ounces),

• Hecla Mining Company (14.3 mln ounces),

• Hochschild Mining plc (10 mln ounces),

• Industrias Peñoles S.A.B. de C.V. (2.3 mln oz, refining giant),

• MAG Silver Corp. (16.8 mln silver ounces),

• Pan American Silver Corp. (20 mln ounces),

• San Cristobal Mining (approx. 11.3 mln ounces of silver per annum),

• Silvercorp Metals Inc. (6.5 mln oz in 2023, multiple projects in development stage),

• Silver Bullion Pte Ltd (Singapore based trader, affiliate LBMA member),

• Sunshine Minting (major fabricator, LBMA full member),

• Tanaka Kikinzoku Kogyo K.K. (major refiner, LBMA full member),

• Valcambi sa (major refiner, LBMA full member),

• Vizsla Silver Corp. (mine under development, est. 15.2 mln oz annual production over 10,6 year mine life),

• Wheaton Precious Metals (17 mln ounces).

As per Silver Institute’s World Silver Survey 2024 publication, silver mine production for year 2023 was at 823.5 mln ounces. Based on the 2023 output figures we compiled above, seems that voting members were responsible for delivery of approx. 200 mln ounces mined, which is roughly ¼ of primary silver supply. Worthy mentioning is, that list consists some heavy-weight market members (Fresnillo, Glencore, Pan American etc.), but also mid-tier and juniors, often listed individually in US and Toronto, but also being part of junior silver miners ETFs.

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This makes Silver Institute’s role in the world of white metal, significant. And in this equation we’ve only counted miners, however presence of recognisable refiners and mints – i.e. Valcambi, Tanaka and Sunshine Minting, dealers & traders, but also specialised transport entities, adds to institute’s weight.

The Silver Institute Officers are:

• Chairman - Octavio Alvidrez (Fresnillo Plc),

• Vice Chairman - Dale Andres (Gatos Silver),

• Treasurer - Carlos Quiroga (Coeur Mining, Inc.),

• Assistant Treasurer - Jeffrey Melody (Coeur Mining, Inc.),

• President and CEO - Michael DiRienzo.

Mr DiRienzo serves as the Executive Director of the Silver Institute since 2004. He manages Institute’s overall daily activities, budget development and management, implementing annual plans, public affairs, and government relations activities. From 1999-2002, Mr. DiRenzo served as Vice President of the Gold Institute, managing that association’s government and public relations activities. Prior to 1999, he served as a government affairs representative for Janus/Merritt Strategies, a political and strategic management firm. He also represented a member company of the Toyota Group as Director of Government Relations. Formerly, he served as Legislative Assistant and Press Secretary to the Chairman of the House Rules Committee, U.S. Congressman David Dreier (Republicans). During his tenure with the Chairman, Mr. DiRienzo worked on House Banking Committee and Rules Committee issues.

Silver institute’s tax filings

Form 990 – Return of organisation exempt from income tax – provides some info about organisation’s financing. For financial year 2023, Silver Institute’s revenue stood at 1,444,778 USD. Figure was composed of 1,444,487 USD marked as Program Service Revenue and 291 USD marked as Investment Income. However this could be understood as possible dividends, interests and other similar. On the other hand, Program Service Revenue are membership dues at 1,220,092 USD, accompanied by 224,395 USD coming from World Silver Survey revenue – flagship annual report on silver market.

Comparison of revenue incurred between 2019-2023 shows that above two remain main and only revenue generating pillars for the organisation, with membership dues remaining mains source of financing. Within above timeframe, number of members remained the same and equalled 23 each tax year. As value of Membership Dues & Assessments vary y/y (1,795,922 USD in 2019, 1,451,100 USD in 2020, 1,169,621 USD in 2021, 1,048.759 in 2022 and 1,220,092 USD in 2023), most likely it must be dependent on mined or traded volume, taking price factor among other factors under consideration as well. At the same time there is an increase in revenue coming from publications – from 160,127 USD in 2019 to 224,395 USD in 2023, which proves growth in interest in silver and its market trends.

For 2023, expenses tallied at 1,226,731 USD. These are being composed of several, mostly standard for such form categories.

• Accounting: 13,642 USD,

• Other: 123,544 USD (this section is split between Technical Monitoring, fundraising expenses at 54,900 USD and Consulting Fees, fundraising expenses 68,644 USD),

• Advertising and Promotion: 141,609 USD,

• Office Expenses: 27,928 USD,

• Travel: 23,209 USD,

• Conferences, Conventions and meetings: 61,200 USD,

• Expenses related to World Silver Survey: 387,448 USD,

• Media / General public Relations: 344,522 USD

• Publications: 103,629 USD.

There is a y/y decreasing trend visible on expenses. Year 2019 expenses tally at 1,812,299 USD, for 2020 at 1,561,981 USD, for 2021 at 1,438,448 USD, for 2022 at 1,231,875 USD, and for 2023 at 1,226,731 USD. So in general terms, organisation managed to decrease its expenses, however it also decreased its revenue over period of time. However on the revenue side of T-account, there is an increase on revenue from publications. Of course let’s not forget on cash assets at over 500k USD and simple fact, that Silver Institute is non-profit organisation.

Revenue less expenses leave organisation with 218,047 USD in profit for 2023. Regards to assets held, at the end of 2023, total these held by Silver institute were at 515,361 USD, while liabilities at zero. Silver Institute started 2023 with 270,420 USD in form of non-interest bearing cash and 26,893 USD as savings and temporary cash investments. By the end of 2023, these were respectively 134,337 USD and 381,024 USD.

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IRS filings of Silver Institute also consist required by law Statement of Activities outside the United States. This is form 990, Schedule F, which is not present in prior filings. This is with relation to development programs in Mexico, Peru, India and China, which we mentioned before. Respectively for North and South America, Silver Institute incurred expenses of 20,000 USD each region, described as Increasing awareness and education of the silver industry. For East Asia and the Pacific, Silver Institute spent 14,830 USD for conferences. Highest individual expenses had been incurred for South Asia region – 46,184 USD had been described as events. In total – 101,014 apportioned between above listed expenses for a period.

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Form 990 also provides some information on highest compensated independent contractors that received more than 100k USD during tax year. For 2023 Silver institute reported two:

• First would be KSG LLC, bearing same address as Silver Institute, which received 523,000 USD as a management fee. This is determined annually by the Institute’s Executive Committee. KSG LLC provides association management services in connection with the implementation and administration of Silver Institute. As Silver Institute doesn’t have any employees, is being managed by KSG LLC, with institute’s President and CEO being paid by KSG LLC.

• Other significant contractor listed is Metals Focus, located in London. It has received 333,000 USD from Silver Institute as a compensation for research activities.

However, while for preceding years, KSG LLC management fee could be easily found in Statement of Functional Expenses, under section 11a (Management), this has been changed in 2023. Silver Institute probably made cost apportion between categories.

Metal Focus appears on the list since 2021. Up until said year, Michael Barlerin Associates is also being listed as independent contractor, dealing with silver promotion. The company was found to provide marketing and management services to the various sectors of the jewellery industry. Michael Barlerin Associates was retained in July 2008 by the Silver Institute to develop and implement programs for the Silver Promotion Service. Its Chief Executive was Mr. Michael Barlerin. Before creating its own company, he held position of Chief Executive at World Gold Council branch America, for 15 years. The primary function of the WGC in the region at that time was to increase demand for gold jewellery. Means, he’s well known throughout the jewellery industry.

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Silver Institute’s program services

We’ve only managed to find two programmes that Silver Institute was involved into. Of course it establishes its presence on convents, events, podcasts and webinars. However we’ve been trying to check on long-term silver popularisation programmes.

First would be Silver Institute’s involvement with a major bank (would It be ‘bank’ or BlackRock itself?) as an advisor on the creation and launch of the iShares Silver Trust (SLV) in 2006. This info appeared in article on Mexico Business News on 21st Oct 2013, but we failed to find any other info on the subject.

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Other, would be creation in 2008 the Silver Promotion Service (SPS), which seemed to be flagship programme designed to raise awareness about the fine work in sterling silver jewellery. Mr. Barlerin shed more light on the matter in October 2015 InStore – The magazine for the American jewellery store owner.

(SPS objective is) to develop and implement programs designed to enhance the image of and to stimulate demand for silver jewellery in major international markets. (…) When we started, our focus was on identifying designers and branded lines that we thought epitomized what silver was all about. Over the years, we realized we had to have increased interaction with and support for the retail community.

He also admitted that before SPS, there had not been any marketing entity behind silver for a long time. And so, SPS raised various silver jewellery focused campaigns, among them Virtual Holiday Silver Market 2020/2021 and Virtual Silver Pavilion. They also launched trade website savorsilver.com, designed as a source for silver jewellery from multiple associated brands and source of information about silver. According to American Gem Trade Association, SPS’s programmes helped to increase silver sales during pre-pandemic seasons and up to 2021, which would be 12 consecutive years.

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The Silver Promotion Service is pleased that silver jewellery continues to grow in importance for American jewellery retailers, maintaining double-digit sales increases and strong margins, despite the challenges related to the COVID-19 pandemic. We are also excited by the robust expression of optimism for silver jewellery’s continued future growth.

However, since then there are no further data on SPS, and savorsilver.com website doesn’t seem to exist anymore, with domain being on sale. Would it mean that in 2021 cooperation ceased?