So its not just a US “manufacturing capacity” phenomenon!?!
There is no other way to describe the radical change that has taken place in several areas of the silver supply market this year other than to say…. it’s quite SHOCKING.
While certain analysts stated that the silver supply would indeed fall this year, I don’t believe anyone could have envisioned the kind of declines experienced in the chart below.
I thought there might be a chance that this silver data was incorrect… a typo of some sort.
However, the second quarter figures that were just released confirm just how dreadful silver supply has fallen…
In a stunning development, the world’s largest silver producing countries reported big declines in recent months. This was surprising because the top two producers, Mexico and Peru, stated positive growth in the first two months of the year.
However, silver production from these two countries reversed this trend by declining in April and May.
Mexico is the largest silver producer in the world. The only two countries that come remotely close to Mexico’s number one ranking are Peru and China. However, these countries trail Mexico by more than 50 million ounces.
According to the INEGI, Mexico produced a record 186 million ounces (Moz) of silver in 2013, but this declined to 184 Moz in 2014.
In this week’s Metals & Markets, The Doc & Eric Dubin break down the week’s action discussing:
- First Majestic Silver takes on the cartel- holds back 35% of Q3 silver production- CEO Keith Neumeyer issues call for silver miners to form their own cartel to put an end once and for all to paper manipulation
- Russian/ US Geopolitical crisis escalates- Putin warns of MAJOR CONFLICT with US, loss of reserve currency status for dollar
- Swiss Gold Referendum- could a YES vote shatter the cartel’s grip on gold?
- Silver market tightens- premiums are on the rise as Royal Canadian Mint begins allocating silver maples, major private mints running production delays on PHYSICAL metal
- Gold predictably capped at $1250- whats next for gold & silver?
The SD Weekly Metals & Markets With The Doc & Eric Dubin is Below:
In the MUST LISTEN interview with Future Money Trends below, First Majestic Silver CEO Keith Neumeyer issues a call to fellow silver mining companies to HALT physical silver sales, and band together to form an OPEC-like cartel to combat the criminal banking cabal manipulating the precious metals markets!
“We all know the paper market has NO representation to the physical market.” – Keith Neumeyer, CEO, First Majestic Silver Corp.
Full MUST LISTEN interview is below:
The U.S. Empire is in real trouble.
While it’s true that the gold and silver market have taken a lot of punishment over the past several years, there’s a good reason China, India and Russia continue to add to their gold hoards.
The day will come when an AVALANCHE of countries exiting the Dollar will finally destroy its value.
Unfortunately, the majority of Americans holding onto paper assets will be the last to know when this occurs, while precious metal investors saw it coming….. much later than they anticipated.
A Perfect Storm for Mining
While it may seem to some that mines might be able to continue producing the amount of silver they’ve been accustomed to producing well into the future, the truth is that these mines, especially primary silver mines, are starting to hit the silver wall of reality.
With the costs of petroleum and diesel soaring, ore grades plunging, and the price for their product free-falling, there’s a perfect, catastrophic storm brewing in the mining sector.
The banksters’ precious silver supply, despite all their efforts, is stagnant, and actually decreasing. They’re moving heaven (and twice as much earth) just to sustain this inadequate supply just.a.little.bit.longer.
The moment the metal stops, or even slows its flow in any reasonable quantity, is the moment the scheme comes crashing down. That’s a problem too, because the evidence is mounting that we are headed into a “peak silver” scenario.
It gets worse for our bankster friends massively short silver, much worse…
- Is a crash to new lows imminent, or did we see the bottom Friday afternoon as gold broke below $1250 and silver below 18.70?
- Retail demand EXPLODES– SDBullion saw largest single day sales volume EVER Friday as nearly 20,000 oz of physical silver were withdrawn from the market
- Russia, Kazakhstan, & Belarus sign Eurasian Economic Union Agreement- accelerate plans to launch “gold” Altyn currency to replace the USD in trade!
- GOFO rates & options expiration- implications for the metals
Full Coverage of the Latest PM Take-down is Below With This Week’s SD Metals & Markets!
Not only did Canadian Maple Leaf sales shatter all records in 2013, their percentage gain was twice as much compared to Silver Eagles. The Royal Canadian Mint just released their 2013 Annual Report and sales of their Silver Maples were the highest on record.
There’s a new Silver Sheriff in town, and it happens to be located north of the U.S. border.
There is an insidious Dark Side to the silver mining industry that goes unnoticed by the majority of investors and analysts. Actually, I haven’t come across one miniyng analyst who puts out comprehensive data on this very subject for the silver mining industry.
According to my figures for 2013, the top primary silver miners suffered the lowest average silver yield ever. That’s correct… another year of declining ore grades and yields.
For those analysts who believe the price of silver is heading lower in the future… the falling yields and increased costs will prove otherwise.
Even though 2013 was a great year for physical precious metal demand due to manipulated lower paper prices, the top silver mining companies suffered a decline in overall production compared to 2012. Of the top six companies, the largest four stated declines, while the two smaller producers increased mine supply slightly.
The chart below shows the change in production year-over-year from the top silver mining companies:
Many investors believe that a company can produce silver at its cash cost. If Hecla was producing silver at its $7.40 cash cost per ounce in Q3 2013, why in the living h*ll did they have a $8.4 million loss at a realized price of $22.22?
The top primary silver miners Break Even for Q3 2013 was $21.39 for the group. However, a great deal of cost cutting was done to get it down to that amount. I don’t see this as a sustainable figure over the longer haul if these companies want to replace production and remain healthy in the future.
I still believe the primary silver miners will be some of the best investments to own in the next several years. As the world’s fiat monetary system gets revalued in the future based on a physical assets, we are going to see a big move up in the value of gold and silver. Physical metal will be hard to acquire, so the miners will be the next best thing.
Mark my words….
The largest silver mining company in the world just came out with their first half financial results and the figures were dismal.
Fresnillo’s first half profits declined a staggering 60% compared to the same period last year. However, at current metal prices the largest silver producer in the world could be experiencing losses the second half of the year.
In this interview with Ellis Martin, David Morgan discusses the temporary suspension of operations of a silver producer based on the cost of production being at par or higher with the price of silver per ounce. With many producers geared up for $30 an ounce silver, $19 remains a challenge for some. However, companies with lower production costs and near producers running a tight budget are seeing light….even as majors like Barrick Gold are pulling back.
Morgan’s thoughts on mining company shut-downs with sub $20 silver and $1200 gold are below:
One of the most insidious problems taking place in the gold and silver mining industry is the decline in falling yields. Not many realize, when yields decline, production evaporates and disappears. To offset the decline in metal yields, the mining companies have to add new mines and or increase the amount of processed ore.
If we take a look at the top 6 silver producers, we can see that the average yield declined 38% since 2005, from 13.0 oz/t (ounce/tonne) to 8.1 oz/t in 2012:
Submitted by Adam Hamilton, Zeal
A MUST READ analysis of global silver mining production since 2001 over the world’s top silver producing nations.
Over the course of silver’s secular bull, the miners have steadily increased production in order to meet fast-growing demand. And in 2012 while US production declined, global silver mine production exceeded 24k metric tons (770m+ ounces), an all-time production high and 28% increase over 2001. As an investor interested in silver’s structural fundamentals, this rapid growth begs a question. Where in the world is this silver coming from?
With allocated/rationed silver eagle sales beginning again on Monday 1/28, the US Mint reported another 300,000 silver eagles sold Tuesday, nearly 1.5 million since production was restarted Monday, and increased January’s all-time monthly sales record to an astonishing 7.42 million silver eagles, 53 times the volume of gold purchased from the US Mint in January!
I have been researching the declining ore grades and silver yields in the top silver miners. I thought the decline would be equal to the gold miners… but it turned out to be a great deal higher.
From 2005 to 2011, the average gold yield from the Top 5 Gold Producers declined 27% or roughly 3.8% per year. During the same time period, the top 5 SILVER MINERS average yield fell an astonishing 33.5%…. or 5.6% per year. This is nearly a 50% higher annual percentage decline compared to the top gold miners!
According to this GoldCore article posted on SD this morning, the Chinese silver demand will hit 7,700 metric tonnes in 2012. Last year India’s silver demand was 4,000+ metric tonnes. We can safely assume they should have about the same figure in 2012.
This means Indian and Chinese silver demand alone will account for 50% of global silver mine supply!!!