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Anyone know what the average silver mining production cost is and the average operating margin on top of that? It must be near the stage where mining companies are making losses?

 

This stuff doesnt materialize out of air, there must be a floor here somewhere? :blink:

 

I have just looked this up on the silver institute website and by the looks of this it is only $1.52 per ounce. I wish i had looked this up before loading up at $17. I have pasted the quote below.

 

Silver Production

Global silver mine production rose by 4 percent in 2007, with particularly solid gains from Chile, China and Mexico. Total silver mine production reached 670.6 Moz last year. Peru was the world�s biggest silver mining country in 2007, followed in the rankings by Mexico, China, Chile and Australia. Last year, silver generated at primary mines drove global totals higher, increasing by 11 percent to account for 30 percent of all silver mined. Cash costs at primary silver mines rose to a weighted average of US$1.52 per ounce, driven by a combination of labor, consumables and energy cost rises.

 

 

 

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I have just looked this up on the silver institute website and by the looks of this it is only $1.52 per ounce. I wish i had looked this up before loading up at $17. I have pasted the quote below.

You ain't alone there, buddy :angry:

Thank goodness sterling has gone down the U-bend, otherwise I'd be looking at a 50% loss. Bunch of arse, I say.

 

Um, rant over.

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An average of $1.52 looks very low. I'd be surprised if any of the North American mines can produce at these costs. It's a wonder then that silver mining shares are so depressed. They should make shed loads of profit, all of them (maybe that's a sign that the figure is somewhat off?).

 

Frizzers might know more on these kind of mining issues.

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If you havnt caught the Financial Sense Hour this week.

Ted Butler, bit silver bull, Talks all about production costs both secondary by-product silver production that is clearly tanking, which accounted for around 40% of the production last year, and that the primary production mines, which arnt able to produce at 9$.

 

Second interview also very interesting and worth a listen, again about the PM market and price manipulation.

 

3rd Hour with Eric King and Special Guests

Select an Audio Format for Part 2

 

Ted Butler, Butler Research

Big Picture with Eric King and

Dr. Alan Lemerand

http://www.netcastdaily.com/broadcast/fsn2008-1025-3b.mp3

 

 

 

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If you havnt caught the Financial Sense Hour this week.

Ted Butler, bit silver bull, Talks all about production costs both secondary by-product silver production that is clearly tanking, which accounted for around 40% of the production last year, and that the primary production mines, which arnt able to produce at 9$.

 

Second interview also very interesting and worth a listen, again about the PM market and price manipulation.

 

3rd Hour with Eric King and Special Guests

Select an Audio Format for Part 2

 

Ted Butler, Butler Research

Big Picture with Eric King and

Dr. Alan Lemerand

http://www.netcastdaily.com/broadcast/fsn2008-1025-3b.mp3

 

Thanks for the heads up. Have not listened to this weeks yet and its already wednesday! Getting real lax here.

 

I notice no Q-calls this week LOL. Must be full of abuse.

 

Real interesting here - we could get a VW/Porsche hedgefund blowup thing with silver and gold.

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With silver production down silver is a dead cert.

 

"Every year the world produces some 550 million ounces of silver. World demand is on the order of 850 million ounces. The difference in these (300 million ounces) is drawn from existing stockpiles around the world."

 

http://www.essortment.com/all/silverwhatpric_rgle.htm

 

The world stockpile of silver is only 300 million ounces. Now is a good time to buy and a bad time to sell.

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Its amazing. I bought some silver coins for £12.50 when the spot price was $17 an oz. The spot price is now $9 an oz and they are £13.00 now. It must be only a matter of time before either the comex spot price goes up or becomes irrelevant.

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I like the nice big number. If only it was in another currency. :rolleyes:

 

I wonder what the ratio of silver to gold might become. 20-1?

 

I’m completely guessing* here. Silver could go to $infinity if the hyperinflationary scenario plays out.

 

Assuming there is prolonged high inflation (not Zimbabwe style inflation), I think the Gold / Silver ratio will drop to between 5-10 as people are priced out of gold.

 

EDIT: * An educated guess. I haven't picked my numbers out of thin air.

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I’m completely guessing* here. Silver could go to $infinity if the hyperinflationary scenario plays out.

 

Assuming there is prolonged high inflation (not Zimbabwe style inflation), I think the Gold / Silver ratio will drop to between 5-10 as people are priced out of gold.

 

EDIT: * An educated guess. I haven't picked my numbers out of thin air.

 

Yes, makes you wonder at what point the dollar price may become an irrelevancy. Takes an effort of will to do this... being so fixated on the dollar price as we tend to be. :)

 

I am starting to think less of the $POG these days and will shortly be in no need of constant reminders that I bought gold in other and weaker currencies [whose POGs have held up nicely] due to a period of spiritual financial discipline I have been practicing these days. :lol:

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