How many years are there left of silver supply?

M

milled

Active Member
This was a topic that used to come up breathlessly back in the hysteria days about 8-10 years ago.

An example (from 2013) here:
https://siamkidd.blogspot.com/2013/01/silver-to-become-extinct-by-2020.html

So I'll open up with a guesstimate based on data from the USGS and Silver Institute

Screen Shot 2019-07-21 at 13.36.33.png

So, we have 560000 remaining world reserves (this may not account for existing above ground existing inventory)
https://prd-wret.s3-us-west-2.amazo...ium/production/atoms/files/mcs-2019-silve.pdf

Per the Silver Institute, physical demand is around 1000 million troy ounces per annum
https://www.silverinstitute.org/silver-supply-demand/

Therefore as I calculate it - should demand remain at 1000 MOz, then the estimated reserve would be exhausted in 560000/(31.3)(1000) years or 17.89 years.

We would also have to factor in the year on year deficit which in the last 10 or so years has run a mean of 79.9MOz (I've averaged it from Silver Institute data).

As a percent deficit this is around 80/1000 or around 8%

This means that supply would be exhausted somewhat faster. I will assume 8% faster which equates to total time to exhaustion of 16.45 years.

That does not take into account existing above ground supply and I would think ore reserves of a lower grade which become economic to mine at a higher spot price

What is does suggest is higher prices will come as mine supply fails. Obviously there are several assumptions, one being that the next 20 years demand will be around 1000MOz and around 20% of that is coin and bar stacking, jewelry about the same again. Fabrication around 60%. The balance is silverware.
 
Screen Shot 2019-07-21 at 15.58.38.png
https://sdbullion.com/blog/how-much-silver-gold-is-there/

That's a lot of supply tucked away and at the rate of 1000Moz per year demand, equivalent to 4 more years of supply

Of course at some point coin and bar fabrication will fall with higher prices and some of the above supply will be cashed in by ageing stackers

This does not account for increased scrap supply from jewelry when the price rises
 
There’s enough silver left to produce non essential fancy coins and jewellery etc.
I wouldn’t panic just yet.
 
Remembering that it's all based on known ore deposits either Inferred reserves, Indicated reserves or a mixture of both.

There have been some rather large ore deposits discovered very recently that contain silver, I'd bet London to a brick that the silver models don't account for those yet.

There's still plenty of deposits waiting to be discovered and one day in the future, mining below the sea might become economically viable... There's plenty of ocean floor to explore.

We're not about to run out any time soon, but we may see a reduction in silver produced in 2024 if no other world class silver deposits are found before then.

Olympic Dam alone is producing 100,000 ounces of gold and even more silver annually and has enough ore to keep that going for another 200 years at the current rate of production... that doesn't include BHP's latest find 65 kilometres to the south of its Olympic Dam project which included one strike which was described as "probably the best drill intersection in the world over the past year"
That newly discovered deposit holds plenty of gold and silver.... They're be years of drilling to better define the deposit.

I'll be interested to see what happens to the price of silver when Fresnillo silver mine winds it's operation up in about 2024, 7 years from now. They alone produce about 1/4 of the world's supply..... 25% price increase?
 
Last edited:
A nice quick 7 minute pep-talk for the faithful. Note there is only 1/4 of the above-ground silver supplies that there is of gold.
 
Actually it doesn't even matter because the same applies to all other materials, so what you may get more for your silver due to eventual shortage of silver, you will pay more for other stuff, due to eventual shortages of materials in those too.
 
You must log in or register to reply here.
Back
Top