There are many silver mines in the us that are sitting idle. They will wait until its profitable. It's not a problem.
Silver Spike...
- Thread starter SilverSale
- Start date
I had a deja vu moment, and had to look back at previous discussions - we've been here before.
Fantastic. Now we are getting somewhere.
As pointed out in previous discussions, silver ore is prevalent at good concentrations.
So, following your logic above, price rises will cause an increase in production. New mines will open if price makes it feasible, or old mines will reopen.
In this case, a price ceiling will develop as supply soaks up increases in demand. This is feasible because of the relatively small 30% dependancy on primary production - with only 5 major producers, it would only take 1 or 2 new primaries to cover a doubling to 60% demand.
It works both ways.
Yes, we have had this same conversation previously and I intend to debunk your theories with the same logic. Ore grades aren't the important factor by itself, it's production output that is important. I am still baffled that you believe we can just open more silver mines and/or ramp up production and that will be the end of the story. Where are these silver deposits? Majority of the largest deposits have already been discovered and are already being mined. Most mines are already at or very close to their ore processing capacity, so where do you propose this new silver comes from, and in what timeframe? It can take over 10 years for a new mine to produce 1oz of silver and once it's up and running that mine still has annual production limits.
Your comment: "with only 5 major producers, it would only take 1 or 2 new primaries to cover a doubling to 60% demand.".. Is absurd.
The 5 major producers you mention happen to be sitting on the largest silver deposits ever discovered. 1 Primary mine, sitting on a large deposit with high ore grades and production output, would only translate to 20-40Moz of increased annual production...once its operational.That's just a little bit over SWEET F@#K ALL when you factor in declining production outputs of existing mines, the lack of new discoveries and yearly supply deficits.
We have already agreed that the global mining ratio of silver to gold is approx. 9:1 (Allegedly 8:1). That is double what Silver's natural ratio in the earth's crust is, and this mining ratio is gradually narrowing.
The facts are, we still have the issue that silver is a finite resource and is the second most useful commodity on the planet with growing industrial demand. Add on the fact that we've have an 85% reduction in above ground available reserves since 1950, declining ore grades, production outputs, fewer discoveries and increased production costs... The opportunity for silver has never been better.
Opportunity aside, the "Production cost floor fallacy" (as you like to refer it) is very real. Why do you believe we aren't we back at $4 levels per Oz of silver that we had in the early 2000's? Production costs! We simply cannot produce silver at that price and still achieve the required mine supply on a global scale. Production costs keep up with inflation, and in-turn so does the production cost floor. To say that productions costs have no bearing in the floor in the Silver price is just non-sense, especially when you factor in the points I have raised above.
How long does it takes to make them operational again? And where's the workers coming from?
They are probably at different stages but they are just sitting on it for now. It's not worth digging up.
Silver mining process: First Majestic Silver
How coins and bars are made - Endeavour Silver:
Videos like these make me really appreciate the price of silver today, especially once you factor in logistics, distribution and operating costs of Bullion dealers.
"Shut up and take my currency!" (I don't care...I love it)
It's crazy to think that at $14 USD you can essentially buy silver for less than the cost of production for most Primary Silver mines.
How coins and bars are made - Endeavour Silver:
Videos like these make me really appreciate the price of silver today, especially once you factor in logistics, distribution and operating costs of Bullion dealers.
"Shut up and take my currency!" (I don't care...I love it)
It's crazy to think that at $14 USD you can essentially buy silver for less than the cost of production for most Primary Silver mines.
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If I were a miner, i rather mine gold or bitcoin. Silver is not worth mining even if the price doubles because it may fall back again.
it’s easy to say silver supply will increase if the price of silver rises. It takes capital to reopen a closed mine. And you can’t get back the investment unless the price stays high for another 10-20 years. There are not many bankers that are willing to fund gold mining companies, let alone hopeless silver.
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Yeah, I'm not going to bother going over the same ground.
All I will add is that I have already shown there is silver everywhere ready to be mined if the price is right.
And that a 10 year lead time is BS - the reserves have already been discovered.
Just in Australia alone, there are way more reserves than operating mines. And this is a world-wide phenomena:
Not 10 years, and FIFO.
Yes but why would anyone want to mine silver if gold is more profitable? I’ve been reading reports of primary silver miners that have been shifting to gold that many are actually no longer primary silver miners even though they have the word silver in their company name.
That's exactly the point. If silver price rises, and becomes profitable, then it will be mined to fulfil demand.
But silver tracks gold. So if the price of silver rises, so will gold, so money will still rush into gold mines rather than silver which is considered unreliable and proven to be unreliable since the 2017 spike and plunge.
I’m not concerned about the supply of silver. What will happen is the paper price of silver will continue to lag gold until suddenly people realise there is no more silver just like what is happening to palladium.
Yep not worth it at all. They can just hold the mines until whenever, theres no time limits.
There is still alot of prospecting going on and locating minerals and lots of mining land changing hands.
I've even got a guy that wants to help me dig my gold claim. He has the capitol and the machinery to get it done and that's what I need.
It might be a couple years before then but he isn't the first to offer the help. Everyone wants a piece!
There is still alot of prospecting going on and locating minerals and lots of mining land changing hands.
I've even got a guy that wants to help me dig my gold claim. He has the capitol and the machinery to get it done and that's what I need.
It might be a couple years before then but he isn't the first to offer the help. Everyone wants a piece!
They make more money trading mothballed mines. Buy a mine, flip it, and then next person does the same. You don’t need to get into the dirty business to make money.
From my understanding this is what’s happening to Novagold though it’s a gold mine. They are just sitting on it.
Silver deposits usually run much more rich than gold. There might be a couple ounces of gold in a ton but there could be hundreds of ounces of silver in the same ton.
Gold is often a secondary metal in those instances.
Gold is often a secondary metal in those instances.
Theres plenty of claim flippers. There are gold claims around here that are for sale and they have NO GOLD haha.
They just stake claims along the edges of mining areas and sell them to unsuspecting people.
It's mostly out of staters that buy those and they dont know any better. At least no one will steal their gold I guess.
They just stake claims along the edges of mining areas and sell them to unsuspecting people.
It's mostly out of staters that buy those and they dont know any better. At least no one will steal their gold I guess.
Palladium is mined almost 1 to 1 or 2 to platinum in South Africa so platinum is a byproduct that floods the market at below cost, heavily subsidised by palladium that sells for $1500 more. Pt is silver on steroids.
Your arguments are too easy to poke holes in. The map you've shown reveals that all of the largest silver deposits are currently being mined. From what I can see, there are 4.
Look at the map and do the maths:
The smallest circles on the map represent deposits of 10 Metric tonnes of (MT) less.
1 MT is equal to 32,150 Troy ozs.
10 MT = 321,500 Oz's!
And this is TOTAL DEPOSIT size, not annual production!!
The largest silver mines produce up to
40,000,000 Oz's annually.
You would require over 100 of these mines to produce the same annual production of a primary silver mine. Barely a feasible deposit unless silver price was in the 1000's of dollar range and the time to setup a mine would exceed the mines lifespan significantly.
The second smallest circles are at 10-30 MT.
Again, you'd need over 30-100 of these mines to produce the same annual volumes as 1 of the world's primary mines...and guess what!? Once there mined, there gone.
All of those smaller and mid-sized deposits on the map would fit into a larger deposit by volume. You can exclude them due to economic feasibility and also exclude them from your ideas of a long-term sustainable solution to the growing demand and declining production of silver.
You have inadvertently proved my point by attempting to quash it.
Mining ratio of silver to gold is 9:1 globally. Deposit density and ore grades do not correlate with the mining ratio. It only matters what can be produced and we are far from a 100+:1 mining ratio.
Believe what you want to believe - makes no difference to me.
You can take the worst-case Australian smallest deposits and argue the main - makes no difference to me.
You can compare Australian potential production to World production and pretend it's relevant - makes no difference to me.
You can ignore world total deposits - makes no difference to me.
You can ignore available world-wide deposit grades - makes no difference to me.
You can pretend 10 year lead-times - makes no difference to me.
You can imagine poked holes - makes no difference to me.
You can look at your investment returns in 10 years and weep at lost opportunity - makes no difference to me.
I agree to disagree.
You can take raw data based on today's price in isolation - makes no difference to me.
You can ignore economics and feasibility of future demand - makes no difference to me.
Over and out.
Honestly, even though I've been reading many articles / posts over the years on the whole mining debate, I've avoided having an opinion because the entire subject seems to be littered with FUD, and a good dose of "opinion" thrown in.
But ironically, the one thing that everyone seems to agree on, is the core concept that "if the price is right".
I consider myself a student of history, as in I'm always looking to the past for clues to the future. And history, shows me, that most extracted resources are demand side driven, with a supply cost floor.
What's the cost floor?. Inflation, ever decreasing ore quality, and accessibility. We've been digging crap out of the ground for thousands of years. Yea, I'm sure that asteroids or the ocean maybe loaded with Gold / Silver, but what's the extraction cost?
In other words, before a significant number of new Gold or Silver mines open, the price would need to rise to new stable levels. Therefore being a self fulfilling appreciation.
Just my thoughts on the subject
But ironically, the one thing that everyone seems to agree on, is the core concept that "if the price is right".
I consider myself a student of history, as in I'm always looking to the past for clues to the future. And history, shows me, that most extracted resources are demand side driven, with a supply cost floor.
What's the cost floor?. Inflation, ever decreasing ore quality, and accessibility. We've been digging crap out of the ground for thousands of years. Yea, I'm sure that asteroids or the ocean maybe loaded with Gold / Silver, but what's the extraction cost?
In other words, before a significant number of new Gold or Silver mines open, the price would need to rise to new stable levels. Therefore being a self fulfilling appreciation.
Just my thoughts on the subject
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