Decline in mining production.

V

Vw1972

Member
APMEX writes that: "The Wall Street Journal reported that Silver mining companies, affected by the recent low Silver price history, won’t have enough capital to fund new mining ventures to keep up with coming demand. “Silver minesupply lagged demand by 4.9 million ounces last year,” which means the gap between supply and demand is only going to grow."

https://www.apmex.com/education/his...=7312019educationcenter&utm_content=awareness

What do they mean by "recent low silver prices". Silver prices has been around the current level since 2013, so wouldnt the mining-companies had been affected years ago by the low prices?

Does anybody have any other news about silver mining companies that struggles with low silver prices, wich means they cant expand their mining ventures?
 
Perhaps the stagnation of silver prices is actually the issue - All of the costs of silver mining will have risen every year just like in any other industry but unlike many other industries silver producers cannot charge more for their product to offset the costs of production because the market value of silver is not based on supply and demand and is artificially determined by people in the financial industry rather than people in the silver production industry.

I look at the analogy of a cafe in a place like Sydney - The price of rent, wages, electricity, gas, insurance, compliance, raw materials and equipment rise every year. So the usual price of a regular take-away coffee has risen over the last decade from $3:50 to $4:50 in the city and inner suburbs, meals are more expensive too. The cafe will absorb some of the expense increases by taking less profit, it will pass some of the cost on to customers until the customers go elsewhere and they will reduce staff hours and finally reduce portion size and quality.

They silver miners will be facing yearly operation cost increases just like the cafe but they can’t raise their prices and often the “market” value of silver will fall (or be pushed) even lower for years on end.

So maybe it’s not that the main issue for silver miners is “low silver prices” as such, it’s that ever increasing costs of extraction of a product that they cannot charge more for in the marketplace is strangling them.
 
Perhaps because JP Morgan have accumulated much more silver than the Hunt brothers and Warren Buffett combined in recent times which would normally drive the price up but they have sold the futures on that silver which in turn keeps the price down.

They'll keep buying physical and selling futures until silver catches up with the other commodities.

Jp Morgan know that a financial sihtstorm is just around the corner and silver is where to invest.

This is probably why physical silver is down and the price is lower than it should be.
 
If we had the 7 dwarfs mine the silver it would fix everything and they'd mine for free except theres no pathway to citizenship for them.
I have a few that work my gold claim for me that I've snuck in the country and they are better than other illegals.
They dig all day for fun and for free and I keep all the gold! They just do that cuz they are dwarfs and pretty weird but they dont eat much.
 
If silver prices maintain their current trajectory miners are not going to have any trouble to raise capital moving forward. They are playing catch up so let’s see where it all goes.

When the price is right it is amazing what can be found.
 
Isn't most silver production a welcome by-product of base metal production? There are very few ore bodies or miners that are solely silver. I know the one near Texas, QLD is solely a silver deposit and three companies have had a go at it and they have all gone broke trying.

A decline in silver output is probably a reflection in a decline in output of copper, lead, zinc elsewhere.
 
I think you right although improvements in silver price makes some of those mixed ore bodies that much more viable.
 
JohnnyBravo300 said:
If we had the 7 dwarfs mine the silver it would fix everything and they'd mine for free except theres no pathway to citizenship for them.
I have a few that work my gold claim for me that I've snuck in the country and they are better than other illegals.
They dig all day for fun and for free and I keep all the gold! They just do that cuz they are dwarfs and pretty weird but they dont eat much.
Click to expand...

You are referring to the story of the runaway girl living with the seven miners I believe. They in fact had a diamond mine. They all went to a party where everyone felt Dopey, so Dopey went home.
 
Maybe silver is up because of buying pressure.

Bank investment rates are very low.

Who can afford to buy real estate?

So why not pump cash into silver and give a bs impression of its value.

Stop buying into the SHTF scenario. It will only bring sadness.

BTW ... what S?
... what F?
 
swoydaz said:
Maybe silver is up because of buying pressure.

Bank investment rates are very low.

Who can afford to buy real estate?

So why not pump cash into silver and give a bs impression of its value.

Stop buying into the SHTF scenario. It will only bring sadness.

BTW ... what S?
... what F?
Click to expand...

I agree, I don't hope for a SHTF scenario to take silver and gold high because I would not like to live through whatever event causes metals to "go to the moon".
 
Shaddam IV said:
Perhaps the stagnation of silver prices is actually the issue - All of the costs of silver mining will have risen every year just like in any other industry but unlike many other industries silver producers cannot charge more for their product to offset the costs of production because the market value of silver is not based on supply and demand and is artificially determined by people in the financial industry rather than people in the silver production industry.

I look at the analogy of a cafe in a place like Sydney - The price of rent, wages, electricity, gas, insurance, compliance, raw materials and equipment rise every year. So the usual price of a regular take-away coffee has risen over the last decade from $3:50 to $4:50 in the city and inner suburbs, meals are more expensive too. The cafe will absorb some of the expense increases by taking less profit, it will pass some of the cost on to customers until the customers go elsewhere and they will reduce staff hours and finally reduce portion size and quality.

They silver miners will be facing yearly operation cost increases just like the cafe but they can’t raise their prices and often the “market” value of silver will fall (or be pushed) even lower for years on end.

So maybe it’s not that the main issue for silver miners is “low silver prices” as such, it’s that ever increasing costs of extraction of a product that they cannot charge more for in the marketplace is strangling them.
Click to expand...


Very interesting. I never thought about it in that way.
 
swoydaz said:
Maybe silver is up because of buying pressure.

Bank investment rates are very low.

Who can afford to buy real estate?

So why not pump cash into silver and give a bs impression of its value.

Stop buying into the SHTF scenario. It will only bring sadness.

BTW ... what S?
... what F?
Click to expand...

Try telling the residents of Yugoslavia,
Grease, Venezuela and Zimbabwe SHTF will never happen.

The world isn't depression or hyperinflation proof.

With interest rates dropping fast and the printing presses running hot printing fiat, the next one is probably just around the corner.

By failing to prepare, you are preparing to fail.
 
Last edited:
Shaddam IV said:
Perhaps the stagnation of silver prices is actually the issue - All of the costs of silver mining will have risen every year just like in any other industry but unlike many other industries silver producers cannot charge more for their product to offset the costs of production because the market value of silver is not based on supply and demand and is artificially determined by people in the financial industry rather than people in the silver production industry.
Click to expand...


Aside from financial manipulation, it appears to me that Silver is rather price inelastic, because 70% of the supply of silver comes as by product of base metals mining. Even among primary silver miners, most of them have actually shifted to mining for gold so they are not pure silver miners. A fall or stagnation in silver price will not see much reduction in world silver supply - thus explains the low silver prices and glut since 2011. Likewise, in the event of an increase in price, the supply of silver will not increase by the same proportion because most of it comes from base metals mining. In an economic downturn, where base metal mining activity falls, silver supply will not rise much even as price rises.
 
swoydaz said:
Maybe silver is up because of buying pressure.

Bank investment rates are very low.

Who can afford to buy real estate?

So why not pump cash into silver and give a bs impression of its value.

Stop buying into the SHTF scenario. It will only bring sadness.

BTW ... what S?
... what F?
Click to expand...

We dont have to have a SHTF scenario for metals to rise in value. Under the last crisis silver almnost rose 400%, and the World didnt end, we all got trough it.

I stack silver because I bet on the next crisis/recession will send silver prices way higer than today, but I dont think our monetary system will collaps and anarchy will roam the streets, like all the stupid doomsday youtube videos that are in the silver community.
 
I'm not sure that "stupid" is the best description for those who prepare for the worst.
If their worst nightmare comes true they won't be looking stupid at all they'll be looking extremely smart.

They might seem paranoid, but they're certainly not stupid.
 
Interesting to know That silver is mined along other metals, with means low silverprices Will have little influence on the mining companys overrall financial status.


That means apmex and Wall street journal Are not to be trusted, when they forget to mention the above.
 
Mismanaged Primary Silver Mines go bankrupt all the time....
New owners than buys it and tries to make it work competing against mines that produce millions of ounces as a byproduct.

What’s a big deal.

Lots of dairy farms closed does that mean there a is shortage of milk?
 
You mentioned that the world don't need silver but needs copper. It maybe true in some extent, but that's not how we will make money from silver. When central banks start to remove paper money, and banks start to do bail-in and gold is restricted (or gst-ed), the world will want silver.

Maybe by then, they will try to restrict silver too, but this is not as easy to implement as silver is used in the industry and is already taxed (gst, vat-ed) in most jurisdictions. And besides, the market cap of silver is too low to threaten government fiat.
 
Last edited:
99% world population no longer value silver. Hence if the “government” says silver is valuable why would the masses believe it.... if so why not digital or paper money?

Don’t get me wrong I have a sizeable amount of paper silver as an investment that I’ll sell and buy just like I have shares in bhp.

Just consider how bad the economy has to be for silver/gold to be traded as currency in the street. It still hasn’t happened yet in Venezuela... so how much worse would it have to get.
 
Last edited:
You must log in or register to reply here.
Back
Top