Largest Primary Silver Miner’s Average Yield Declines 13% In 2012

By SD Contributor SRSrocco:

The top primary silver mining company in the world, Fresnillo LLC saw its averge silver yield decline 13% in 2012.  The large percentage of the decline came from its flagship Fresnillo mine whose average silver ore grade fell from 396 g/t in 2011 to 328 g/t in 2012.
As ore grades decline, it takes more energy to produce the same or less metal. 

 

 

The figures for the chart above came from Fresnillo LLC’s two primary silver mines, Fresnillo and Saucito.  Fresnillo’s average silver yield declined from 11.7 oz/t in 2011 to 9.6 oz/t in 2012, whereas Saucito actually increased its average yield from 7.2 oz/t in 2011 to 7.8 oz/t in 2012.

According to Fresnillo’s 2012 Annual Report:

Annual silver production at Fresnillo decreased 12.9% from 2011 due to the expected and natural decline in ore grades.  Based on current assumptions, we expect ore grades to decline to approximately 300 g/t level in 2013, then to remain within in the range between 300 g/t and 325 g/t for four years before declining in the following years towards the ore grade in reserve (281 g/t).

As I mentioned before, as ore grades decline, it takes more energy to produce the same or less metal.  The company has been working on upgrading the milling capacity from 8,000 to 10,000 tonnes per day at Fresnillo to make up for the declining ore grade.  However, they have decided to analyze the situation and to see how to best develop the project to the benefit of all operations within the district.

 

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Comments

  1. I wonder if output from miners has more than little impact on price. Look at the price of Bitcoin. The price goes to double or to an half. There’s no connection to mining.

    • I think the point of this article is not price, but availability. Stack while you can. Silver will be a controlled substance before long. Our industrialized and technological world is dependent on it.

  2. If you invest in mining shares you probably feel like you have just been throwing your money down a hole in the ground all this time. 

  3. if inflation takes off and energy costs sky rocket the price of physical will have to follow or mines will shutter.

  4. Lots of counterparty risk you’re being punished for gambling on. Oil prices, ore grades, mine management, and most of all : a metal price set by a paper market which will only correct up when mine supply dies altogether for too long a time.
    One mine will do better than the other, and experts can do well picking the least bad or least vulnerable one.
    I suppose mine shares are now undervalued. And several of the big ones may go out of business before silver becomes truly overvalued, or overshoots it’s reasonable price range. Buy 3 shares, one mine corp each, and you’ll be lucky if in 10 years you still have 2 operational companies. Those 2 will do really well when silver peaks, but then, so will silver.
    As a never-before share holder, I am worried about the counterparty risk of holding any paper promise to a share of a company. They can dilute by offer more shares. The corp can be taken over by an alien military force, all shares declared void. And then there are the bankster tricky plans that we sortof suspect, but always turn out to be more dark and advanced.
    The leverage of mining shares is attractive. But the same were silver derivatives, and I lost a sick amount of money (for me) on that. I was supposed to quintuple my life savings and buy a huge amount of silver. I went back to zero, and had no choice but to start stacking the hard way, at higher prices even then I had started trading derivatives.
    Had I been in the trading still, could I have ridden the crash with shorts? Partially perhaps. But I had some silver, and it is still there.

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