By SRSrocco:
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!
This is the chart for the top 5 gold mining companies average yield per tonne:
From 2005 to 2011, the average gold yield from the Top 4 Gold Producers declined 27% or roughly 3.8% per year.
I don’t have a chart for the TOP SILVER MINERS, as it will be included in my next article. But, I will give out the preliminary data.
From 2005-2011… 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.
This does not include the newer silver miners such as SilverCorp, First Majestic and etc. These figures come from the big boys such as Fresnillo, BHP Billiton’s Cannington, Polymetal’s Dukat & Lunnoye, Pan American Silver and Hecla. I have two other large silver producers that may be factored in. I have to wait and see.
Anyhow, this shows us that the TOP SILVER MINERS are seeing their annual silver yields per tonne fall 5.6% per year compared to the top gold miners that declined 3.8% per year.
COMING SOON…. NEW BIG SILVER ARTICLE
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I wonder how many silver miners are going to go out of business as a result of declining yields, or will the likes of the Morgue and Kie, give them a break and push the silver price a bit higher?
Talk to the US government about silver prices, they are backing the Morgue
If there are less silver that are produced, then people’s standard of living will also go down because silver is used on almost all products. It’s amazing that silver mines are still capable of generating that much profits even with the low price of silver.
silverbullion… I don’t think silver miners will go out of business due to declining yields, but rather as it takes more energy to produce less silver every passing year, this will be a big problem in the years ahead.
Basically, the gold and silver miners have to move more ORE TONNAGE to produce the same or even less metal each year. As the production of liquid energy peaks here within the next 3-5 years, it will become more difficult to continue BUSINESS AS USUAL.
@SRSrocco Thanks for responding. So you think none will go out of business, but that an actual liquid energy shortage will in worst case scenario only make it difficult to continue BUSINESS AS USUAL? I am sure the cost of additional energy needed to push up ore tonnage is also a factor that need to be taken into consideration. An increase in the silver price should surely help to move more ore tonnage, providing there is sufficient energy, liquid or otherwise, available (not even to mention other resources and capital and the cost thereof). If the silver price doesn’t increase, or if the likes of the Morgue and Kie don’t push the silver price a bit higher, how are silver miners that cannot afford the increased cost of energy expressed in fiat dollars going to survive? I might still have the cat completely by its tail… I am trying to learn something new here.
@SRSrocco I think that SilverBullion was thinking along the lines that you only need a couple of big Strong Africaners to cover the issue of Production Costs. LMAO
@Marchas45 lol Exactly Charlie. They could sponsor us in terms of moving abroad, housing and all, and in exchange we will get the show on the road. We know how to get water out of a rock the easy way. lol
Would indicate a shortage of silver grows by each passing month.
Silver is really bullish for the moment. It went down to 31$ per ounce before the US election and now, it is at 32.10$ per ounce which is after the US election. Overall, gold and silver will go up because the election is over so the cartel is going to manipulate them less.
Soon the rubber band holding the price down is going to meet yet the straw that collapses the cartel’s back!
silverbullion… it is difficult to estimtate which silver miners will do better in a peak energy environment. On one hand, the large open-pit mines such as GoldCorp’s Penasquito mine only have a gold ore grade of 0.60 g/t and silver at 30 g/t. However, they produce a great deal of gold and silver by moving massive amounts of ore. This is actually more profitable than a very high ore grade mine that moves very little in the way of ore.
That being said, I think the HIGHER GRADE ORE MINES (especially underground) will fare much better in a peak energy enviornment than its open-pit counterpart. Peak liquid energy just means there will be less energy to mine metals… which means, less metals
Once the price of gold and silver head up much higher this will initially help all the mines. However, once peak energy reveals its ugly face, even higher prices of gold and silver will not allow a growing supply of the metal to hit the market
We are seeing the same phenonmenon taking place in global oil production. Since 2003, the price of Brent crude has gone up more than four times its price:
2003 = Brent Crude = $28.85
2011 = Brent Crude = $111.26
Global Oil Production
2004 = 83 mbd
2005 = 84 mbd
2006 = 84 mbd
2007 = 84 mbd
2008 = 85 mbd
2009 = 84 mbd
2010 = 86 mbd
2011 = 87 mbd
Global oil production has increased 5% in seven years while the price has risen 4 times. Some think it just takes time to get more projects online… but I hate to give out bad news, but the big oil projects slated to come online have, and others have been postponed or delayed. The projects that are left to still come online, will not be able to offsett ongoing and increasing depletion rates in older oil fields.
Great article SRS!
There is a lot of Silver ore here in Idaho (I can show you) but there is little in the way of Refining options. Research: Minnie Moore Mine. The big mines in Kellogg, Idaho have been shut for years as one company sells to another. And nobody wants to pay an American a living wage.
Idaho Silver…. yes you are correct. There is and has been a great deal of silver in Idaho. Here are two of my charts showing first, the amount of silver mined in the United States, and second… the declining ore grades in Idaho and the U.S.:
Idaho was the only state to produce more silver from 1950 to 1990, than all the other states. When I did the research on silver mining in the USA, I was completely surprised that Montana was the largest silver producer from the 1800′s-1950. I for sure thought either Utah, Idaho or Nevada was number one.
Anyhow… if we look at the overall silver ore grades in Idaho, they peaked in the 1945-50 time period. They had another peak in the 1965-70 period. However, we can see the ore grades continued to decline into the 1990′s.
Even though there is a great deal of silver still left in Idaho, it costs too much to produce it in the states due to the fact that labor is much higher than in South American countries. Furthermore, there are tougher regulations and higher cost items.
There is an estimated 10 sites as large as the Minnie Moore (the largest output in past years) underneath Sun Valley where “de don’t want the racket” fearing “lead will leach into the groundwater.” Just a globalist playground now. It is pretty there but back up in the hills one could get out some very high grade ore…to where of course. The Minnie Moore has been leased and is facing huge backlash from the community. Plus, the Rails were taken out years ago. I have no idea why the current owners didn’t come to figure out the humanoids. But up in the “Atlanta” mining district there is a lot of gold as well as silver and over by Challis. There are miles and miles of ore bearing mountains. My buddy’s vein has been assayed at 250 oz/tn.
The fact of the matter is that we may Stack but we don’t formulate a plan to mine and refine. Kinda lazy of us. Nonetheless, the less the Silver above ground the more likely our Silver will climb against the USD. My prediction of two weeks ago is still holding true: “a whole lot of sideways.” I guess I am the go-to expert now.
Steve. Thank you for your continuing long term analysis of these vital statistic surrounding the subject of ore grades and extraction costs.
long time friend and his wife were visiting us in the last 2 days. He loves to visit mining towns and silver sellers. We did both by touring Virginia City to observe the activity there. Many old mines, tailings and the cash cow, tourism were to be seen. The Comstock may have some silver remaining deep underground but it takes a lot of energy to extract it. NV, while it is still a substantial mining state, is suffering like most mining areas with low grade ore and high energy, regulation and environmental costs.
A large bullion store was selling with substantial premiums to gold and siler spot, doing a brisk business with knowledgeable sales people. One clerk admitted she was all in with her silver investments, giving herself a 20 year time horizon for her self created retirement plan.
$3.50 over spot for 10 oz ingots. Morgans were $8 over and junk bullion was too expensive since NV has sales tax on coins with a value ascribed such as eagles. The rounds were $2 over spot with no discernible discount for larger sales. No bargains were to be had but the inventory was substantial and diverse. Most of the clientele was buying, not selling.
The overall aspect of declining grades in the ore coupled with high extraction costs will break the back of the silver and gold prices, pushing them higher. This still seems to be the proverbial slow motion train wreck that we have all waited patiently for but it is certainly coming. I spent half the time talking shop shop to my friends about buying and increasing their silver holding. They are competely sold on that notion as well
AGXIIK… I appeciate the input and the interesting information on the large bullion store.
I did find something else quite interesting. This is a OFF-THE-CUFF-NAPKIN-CALCULATION (I have not yet done all the math and data), but if we compare the top 5 gold to the top 5 silver we get the following:
TOP 5 GOLD STATISTICS:
2011 TOTAL PROCESSED ORE = 562 metric tonnes (mt.)
2011 TOTAL GOLD PRODUCTION = 24 million oz
TOP 5 SILVER STATISTICS:
2011 TOTAL PROCESSED ORE = 13.1 mt.
2011 TOTAL SILVER PRODUCTION = 114 million oz
The top 5 gold producers processed 562 metric tonnes of ore to produce that 24 million oz of gold compared to only 13 million tonnes for the top 5 silver miners to produce 114 million oz of silver…. thus the top 5 gold mines processed 43 times more ore than the top 5 silver miners.
In a peak energy environment, PRIMARY SILVER MINES will do much better than PRIMARY GOLD MINES… due to the fact that it takes a great deal more energy to produce that gold. However, I still believe global silver production will be impacted greater than gold at this time because 70% of silver comes from by-product mining.
We must remember, 13% of all silver comes from GOLD MINES.
SRSrocco, thank you so much for your work! To an un-educuhmated guy like me, your posts are pure gold…or make that silver lol
You, and the Doc, provide me with much needed ammo when trying to get my in-laws and family to understand what is happening, and little by little they are getting it. Thank you!
That’s why I think that silver’s price will go up in the long term even if the cartel is manipulating it. If the silver mines don’t generate enough profits from the market’s silver’s price, then they will cut their productions and wait until silver goes up again.