A good read on mining costs

[rodmadman]

http://thecrux.com/mining-expert-dont-be-fooled-by-these-gold-and-silver-bargains/

 

[Holdfast]

And of course there's miners who have hedged their product.

 

[Pirocco]

"Shares of Pan American are now down around 84% since their peak in April 2011. But they could head even lower if the company continues to struggle."

"In short, investors looking for bargains in the mining industry need to be extremely wary today."

Extremely wary today?
Haha.
How should those investors back in april 2011 then have been?
Extremely galactical megasuperzord infinite wary?
What did those good reads on mining costs say back in april 2011?

 

[willrocks]

Mining costs are irrelevant to the silver price.

 

[SpacePete]

Mining costs are irrelevant to the silver price.

What wold happen if eventually many go out of business and existing stockpiles are depleted?

 

[Porcello]

Mining costs are irrelevant to the silver price.

What wold happen if eventually many go out of business and existing stockpiles are depleted?

Stock to flow ratio is apparently 20-30 years. There is plenty of time for new miners to enter the market before stocks are depleted. Plus, silver is mostly obtained as a byproduct of other metals.

 

[Jim4silver]

Mining costs are irrelevant to the silver price.

What wold happen if eventually many go out of business and existing stockpiles are depleted?

Stock to flow ratio is apparently 20-30 years. There is plenty of time for new miners to enter the market before stocks are depleted. Plus, silver is mostly obtained as a byproduct of other metals.

Those mines that produce silver as a "byproduct" are losing $$$ on their main commodity, just like primary silver mines. Copper, lead, gold and zinc are dropping and they produce much silver as a byproduct. So if a copper mine shuts down that means less byproduct silver is being mined.


Jim

 

[willrocks]

Trying to justify a market price based on production cost is pointless. For example: In theory I could pay all my bills and get-by earning $20 per hour, so that is in theory my base production cost. Does that mean I should earn $20 per hour? No, because the market rate for my contracting skills is a lot higher than that, so I'm able to charge the market rate. And the only reason I'm able to charge higher is because my clients (buyers) are willing to pay.

The point is, market forces determine price, not production costs.

 

[Porcello]

What wold happen if eventually many go out of business and existing stockpiles are depleted?

Stock to flow ratio is apparently 20-30 years. There is plenty of time for new miners to enter the market before stocks are depleted. Plus, silver is mostly obtained as a byproduct of other metals.

Those mines that produce silver as a "byproduct" are losing $$$ on their main commodity, just like primary silver mines. Copper, lead, gold and zinc are dropping and they produce much silver as a byproduct. So if a copper mine shuts down that means less byproduct silver is being mined.


Jim

Yes, that's a given. But again, stock to flow ratio is expressed in decades so we have to think of a commodity crash that last decades before we see a stock depletion.