Hi, Does anyone on here know the approx production cost of Silver per ounce? I did a forum search but could not find anything. Thanks in advance.
I guess it would vary depending on the mine, the amount of silver, the country's laws, age of the mine, etc.
That depends massively on the individual mine. Costs differ a huge amount and are difficult to figure out for mines that produce silver as a byproduct of lead etc mining.
here is a link.. http://www.silverminesltd.com.au/IRM/content/home.html They say that they can extract about 8 ounces of silver per tonnes of overburden (rock and dirt) using opencut mining methods. There are heaps of factors as explained - these include how large the silver deposit is, whether they are mining silver alone or as a by-product from other mineral mining, the size of the company (the bigger the operation the smaller the operating costs per ounce.. similar to Big W buying in bulk..I think). Also if the silver deposit is in very remote or difficult terrain, there are additional expenses such as flying in labour or setting up temporary towns as well as building powerlines, water pumps and dams etc. Also, if the area is relatively unknown, exploration and surveying expenses can also add to the overall production cost of mining silver (or any resource in dirt). I think one of the factors I found interesting is that much silver is only mined as a by-product of other metal mines. If copper price reduces significantly without a similar spike upward in silver, than a copper/silver mine may go offline. These mines could be reopened if the price of silver goes high enough to validate spending more money getting it online again. I'd love to hear more from someone who has worked in a silver mining operation. I'm sure it is fascinating.
I heard a few years ago it was around $8- $10 an oz, but things must have changed since then. When it was $8 an oz it was comming out of the ground at a loss! Shows how much he price of silver has been out of wack!
I believe McEwen stated that the expected cost of the above ground silver mine for UXG would be about $5oz. The $8-10 mark1 posted seems very reasonable for below ground mines. As others posted, there are so many variables with each mine (above/below ground, transportation, other mineral credits, etc.) that an average cost is not useful. The factor that has kept me in pm stocks through all this volatility and rigged markets is the fact that the p/e multiples at the end of the last pm bull market were 35 for gold and 53 for silver. And gold stocks doubled in the 9 month period after gold peaked in price. The potential return on the right stocks is phenomenal, but you have to suffer through tremendous volatility.
I m sure the cost of open cut mining silver would be a lot more than $5 per ounce. Open cut gold is now estimated costing around $1000 an ounce in Australia to produce after all expenses but maybe someone has more accurate figures. There are very few silver only mines in the world. Most silver is produced as a by-product.
major example. Zinefex had the Century mine in western Qld Lead/Silver/zinc and was costing approx $40 a ton to mine and ship and making $4000 at market. They posted the 4th biggest profit in Australian corporate history, the next year they sold the lot for a song, after a cyclone hit there dock, and 2 major explosion halted smelter production in SA. And a good deal of bad corporate governance. Not sure of grades but approx 100 oz silver per ton @ $20 something an oz. plus lead and zinc sales and trace gold that's them, for me to set up / find a new mine, exploration cost are minimal as i target old workings and new magentics, IP data, vegetation mapping and a good deal of common sense. cost break down for me is find / mine / store / transport / process/ treat/ refine/ sell. or as i do, find / mine / transport and sell, so i eliminate some steps and end up getting more $ than if i went the whole process.
