Is silver spot below cost?

[pug]

Take a look at the http://www.store.firstmajestic.com/
They haven't dropped the price from $27. Ever since silver fell below that point.

We know other dealers have just raised their premiums.

Silvertowne is currently asking $26 per oz. Which is about a 15% premium.

I bet if spot fell further you'd just see the premiums go up further.

Any more examples you can find of this?

 

[Argent47]

Depends. For some miners, yes, for others, no. Some mine it for ~$5.

 

[Holdfast]

pug - plenty of miners in business mate as can be seen by the chart.

Like anyone else, blokes are in business to make a dollar, so while demand is high, of course dealers are going to try to benefit; you'd do the same thing.

What we can do, is shop around to find the best on-line price or if you have purchased a lot of metal from one particular dealer, don't be scared to ask for a discount or at least price match.

The other thing to remember is to support those dealers that do go the extra mile, not only now but in the future.

 

[Pirocco]

Last week The Silver Institute reported the 2012 figures, and also this:
"Primary silver mine cash costs rose to $8.88 an ounce, reflecting higher prices for labor, electricity, and maintenance charges."
So the cash cost is about $9 an ounce. Spot $22-9=now 13 dollars left to divide as profit in the production & distribution chain.
Keep in mind that this cash cost only refers to primary silver mines, which account for only 28% of the total mine production. For the 72% others it's a more complex story due to byproduct and silver thus only a smaller part of the story. One may assume though that above higher costs apply to them too.

 

[monopolize]

http://www.financialsense.com/contr...tions-large-surpluses-and-low-production-cost

I think the above article whilst probably exaggerated somewhat is closer to the reality. I don't know how silver institute calculate their numbers, but it's not reflective of what I'm seeing in stock prices. If costs were really that low then primary silver producers should be raking it in. All I'm seeing are 52 week lows.

 

[pug]

Its more accurate to refer to 'all in costs' as the cost of silver, rather than cash cost. All-in cost includes borrowing interest, tax, office costs, advertising, environmental fees, exploration expenses, and administrative expenses, and is a a much more realistic measure of what it costs to produce an ounce of PM. Cash cost is really a misrepresentation, misleading, and the miners love to give it to investors because it makes them sound like they are more profitable than they really are.

Last week The Silver Institute reported the 2012 figures, and also this:
"Primary silver mine cash costs rose to $8.88 an ounce, reflecting higher prices for labor, electricity, and maintenance charges."
So the cash cost is about $9 an ounce. Spot $22-9=now 13 dollars left to divide as profit in the production & distribution chain.
Keep in mind that this cash cost only refers to primary silver mines, which account for only 28% of the total mine production. For the 72% others it's a more complex story due to byproduct and silver thus only a smaller part of the story. One may assume though that above higher costs apply to them too.