Two problems with silver

C

Cheepo

New Member
There are two problems that haven't been discussed yet:

1) Since 70% of the silver mined is a by-product of mining other metals, there isn't really a bottom price, where you can say "below this it doesn't make sense to mine silver, so it won't drop below this". As a by-product, the only cost of mining silver is that of transforming the digged out ore into coins and bars, which I guess is well below $1/oz. So, that's your bottom price :(

2) 50% of its consumption is for jewellery, stacking, etc, i.e. not industrial. Maybe younger people have less of an affinity to silver as PM because they haven't experienced a time when there were silver coins in circulation. As a jewellery material it has also lost some lustre to platinum, which doesn't tarnish, is harder, etc. (though of course it's more expensive). If most stackers and jewellers stop buying silver, its demand from industry will not be sufficient to justify silver mines, which means that all silver mined will be by-product of mining other metals, and the price is likely to drop to $1/oz, or something.

Neither of these things are true for gold. These things might go some way to explain why the price of gold has kept increasing compared to the price of silver.

Thoughts?
 
Statistics don't lie. But liars use statistics.

And, 90% of statistics are made up on the spot.
 
So how many of you folk can name the 5 top world producers of silver and their major mines?

I thought so!

Fact is...most of you spread rumours and BS and have never investigated the facts.
 
Your point 1. is off the mark. Even as a by-product of other metals there are significant costs in separating the silver ore from the tailings. If the cost is greater than the reward, these are kept to one side in order to revisit when silver spot increases.
 
sammysilver said:
Your point 1. is off the mark. Even as a by-product of other metals there are significant costs in separating the silver ore from the tailings. If the cost is greater than the reward, these are kept to one side in order to revisit when silver spot increases.
Click to expand...
So what is the cost of making bars from the tailings? I guessed $1/oz. How much is it?
 
Did someone ask for primary silver mines = here is a list of primary Silver mines based on production volumes for 2011.
Rank Name Country
1 Cannington Australia
2 Fresnillo Mexico
3 Dukat Russia
4 Uchucchacua Peru
5 Palmarejo/Trogan Mexico
6 Pallancata Peru
7 San Bartolome Bolivia
8 Pirquitas Argentina
9 Greens Creek USA
10 Arcata Peru
11 Imiter Morocco
12 Saucito Mexico
13 San Jose Argentina
14 Ying China
15 Alamo Dorado Mexico

Sorry adjusted for production figures being 2011....
 
A mine in Aus is a copper mine and it happens to produce 10 ounces of silver per tonne.
South america some ground tested 25 gpt gold, 151 gpt silver.
the super pit in western australia operates on 1.6 gram per tonne gold. each truck carries 215 tonne, only every 6th truck on average has any gold in it. Around 800 000 oz gold per year.

MacPhersons Resources (ASX: MRP) plans to go ahead with the mining of its Nimbus Silver-Zinc-Gold Project after pit optimisation studies on the recently upgraded resource confirmed the original two open pits at Nimbus can be merged into a single silver superpit.

This is a significant milestone for the company and the Nimbus project still has more exploration upside with mineralisation open along strike and at depth.

This development has paved the way for the release of mining contracting tender documentation for the Western Australian Project that is located 10 kilometres east of Kalgoorlie's Super Pit gold mine.

The pit optimisation studies were carried out on the recently announced 46% upgrade in the JORC Resource to 4.4 million tonnes at 129 grams per tonne (g/t) for 18.3 million silver equivalent ounces.

Morrie Goodz, managing director, commented: "The pit optimisation studies all support a single superpit model, which is what we predicted when the new mineralisation zone at Lens 3 was intersected.

"The drilling results, resource upgrade, and new pit model support the directors decision to approve the plant expansion and the new Merrill-Crowe plant scheduled for delivery in October 2013."

Various optimisation scenarios are still being modelled, however all of the options have the new proposed operation being a single superpit of around 900 metres in length by 500 metres wide and 205 metres deep.

The first pit is proposed to deliver 8.6 million ounces silver-equivalent (6.6 million ounces silver plus 2 million ounces silver equivalent from gold-zinc credits.

It will mine 1.5 million tonnes at 179g/t silver equivalent (137g/t silver plus gold-zinc credits).

Measured and Indicated Resources continue along strike and beneath the pits and are anticipated to support further extensions to the silver superpit in future mine planning scenarios.

The pit cutback in year one will have four shallow pits to focus on the oxide ore and the new gold zone and Lens 4, and then in year two will commence the merging of the pits as the primary ore is developed.


Historic Nimbus mine

The Nimbus silver mine operated from 2003 to 2007, producing 3.6 million ounces of silver at an average grade of 352g/t silver.

The mine had various additional silver and polymetallic deposits in the advanced stages of exploration.

A review of the historical project economics has shown that the cost curve from 2007 has remained relatively flat, while the silver sale price is 400% of that obtained by the operations.

To maintain lower costs, in 2011, MacPhersons completed the construction of a 5.5 kilometre HV electricity line to connect the Nimbus mill to the state electricity grid, which would reduce 2007 costs where power was from diesel generation.

In late 2011, MacPhersons began a diamond drilling program to test a multi-million ounce exploration target associated with up to nine VHMS massive sulphide lenses.

Targets include various silver, silver-gold, silver-zinc-gold-lead deposits and the Boorara Shear Zone which includes several gold deposits at Boorara and Nimbus.

Recent diamond drilling has defined additional thickness and continuity of the silver bearing VHMS zones, and the extension of mineralisation between the Discovery and East Pits.

This mineralisation is associated with large haloes of disseminated sulphides carrying in excess of 12g/t silver as background.

There are several zones of high grade polymetallic mineralisation that have been previously reported.

Drilling of one massive sulphide zone returned a highlight intercept of 17.4 metres at 860g/t silver, 16.6% zinc, 3.5% lead and 0.3g/t gold; including 7 metres at 1,660g/t silver, 31.1% zinc and 6.9% lead.

Individual metre thick samples have assayed up to 3,270g/t silver and 41.1% zinc.

This VHMS mineralisation is intersected from 20 to 70 metres below the existing Discovery Pit floor.

There are 10 massive sulphide lenses at Nimbus and a further nine other silver-zinc prospects on the tenements to be tested in 2013-14.
 
sammysilver said:
Your point 1. is off the mark. Even as a by-product of other metals there are significant costs in separating the silver ore from the tailings. If the cost is greater than the reward, these are kept to one side in order to revisit when silver spot increases.
Click to expand...

Actually, sammy, some of these joints don't need to retreat their tailings, the ag is within the mineral they're chasing, and it carries across - au also. This is the case in most base metals concentrators that get paid for au/ag in their cconcentrates.in this case, it costs sfa extra to aachieve the metal... (this is what i do...)
 
Silver being the by-product of Zinc and Lead Mines is not in the Tailings (unless it is waste material)... it is included in the final concentrate product (usually zinc or Lead) which is paid for by the buyer of the product.
 
Top 5 silver producers in 2013


Fresnillo
Gold and Silver mainly

BHP Billiton
Many commodities. Silver and gold are just side benefits from mining apart from a couple of mines.

KGHM Polska Mied S.A. focused on growth in copper.

Glencore Xstrata
Many commodities. Silver and gold are just side benefits from mining apart from a couple of mines.

Goldcorp
Gold mainly. Silver is a side line.

3 out of 5 biggest producers are more focused on the other commodities. Silver and gold are just a by product of the process. They are seen as a nice bonus, a bit of a hedge to keep the mining profitable in hard times.

So when Goldcorp and Fresnillo hit hard times the other will still produce.
 
Actually, the STATED cost of mining silver viably/sustainably appears to be more or less largely irrelevant anyway; I can recall 24-30 months ago reading some articles or blogs where some miners were claiming that they can't deliver silver at below $34 USD/oz. Ever since reading those STATED viability levels I've noticed that the price of silver has been vociferously falling in spite of those claims.

The spokespeople for miners are either not being entirely honest or they have greatly miscalculated things....as I see it, because most if not all have been delivering silver (as far as I can tell) even though the price has been below $34 for a long time now. If non-secondary silver mines were actually losing money on delivering silver, I would think they would halt processing tailings or whatever form their silver resides in and just stick to delivering the other metals that they are not being allegedly crippled by.



.
 
billbob78 said:
Did someone ask for primary silver mines = here is a list of primary Silver mines based on production volumes for 2011.
Rank Name Country
1 Cannington Australia
2 Fresnillo Mexico
3 Dukat Russia
4 Uchucchacua Peru
5 Palmarejo/Trogan Mexico
6 Pallancata Peru
7 San Bartolome Bolivia
8 Pirquitas Argentina
9 Greens Creek USA
10 Arcata Peru
11 Imiter Morocco
12 Saucito Mexico
13 San Jose Argentina
14 Ying China
15 Alamo Dorado Mexico

Sorry adjusted for production figures being 2011....
Click to expand...

for starters Cannington is not a primary silver mine it produces LEAD with silver as a byproduct.

If no 1 is wrong on your list I doubt the rest of your list as "primary" silver mines as well.
 
Court Jester said:
for starters Cannington is not a primary silver mine it produces LEAD with silver as a byproduct.

If no 1 is wrong on your list I doubt the rest of your list as "primary" silver mines as well.
Click to expand...
Are you sure?
 
Gold is valuable because it is hoarded. The more silver that is hoarded it will act more like gold. It will be seen as a store of wealth rather than industrial.
 
wrcmad said:
Court Jester said:
for starters Cannington is not a primary silver mine it produces LEAD with silver as a byproduct.

If no 1 is wrong on your list I doubt the rest of your list as "primary" silver mines as well.
Click to expand...
Are you sure?
Click to expand...

pretty:



The mine is expected to have a life of 25 years, with an annual production of 750 tonnes silver, 265,000 tonnes lead and 111,000 tonnes zinc. These metals are produced by a range of metallurgical processes undertaken at the site including grinding, sequential flotation and leaching

Cannington is the world's largest single silver producer, representing about 6% of the world's primary silver production, while its lead production represents about 7% of the world's primary lead output. The lead concentrate contains 70% lead and over 3,000g/t silver with low levels of impurities. Long-term contracts for concentrate sales have been agreed with Pasminco (now Zinifex) in Australia, Metaleurop in France, Berzelius in Germany, and various smelters in Japan and Korea Zinc.

At the end of 2005, the orebody contained proved sulphide ore reserves of 18.0Mt grading 477g/t silver, 10.7% lead and 3.9% zinc. Measured resources totalled 2.3Mt at 536g/t Ag, 11.94% Pb and 4.49% Zn. The metallurgical recovery rates for zinc, lead and silver were 66%, 88% and 84% respectively
 
Just clarify, producing more than one product does not mean that a mine produces only the one product. Yes it may produce lead, zinc and silver, it's silver is not considered a by-product because it is specifically targeted. Base on the production number reported in 2013 Cannington did produce the highest volume in 2013. Do you have any backup printed where it states that silver is a by-product? If so I will humbly apologise.


"In 2010 it was the largest and lowest cost silver and leads mine in the world, representing 6 per cent of the world's primary silver production." As noted in the article below... I would like to highlight ... 6 per cent of the world's primary silver production...... I take it the article seems to think it is a primary product...

http://www.miningoilgas.com.au/index.php/products/a-z?sobi2Task=sobi2Details&catid=10&sobi2Id=130


But I am looking forward to any reference you can make... And again my apologies if I am wrong.
 
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