Due to shutdowns stemming from the global contagion, Peru’s silver production collapsed 20 million ounces versus the same period last year. Mining companies have restarted operations, and the country expects to be at full production by the end of July. We will see.

However, it may turn out that Peru’s silver production fell even more than Mexico. This is quite surprising as Mexico is the largest silver producing country in the world. While many silver mining companies headquartered outside of Mexico closed down operations for at least two months, domestic-based Fresnillo PLC continued business as usual.

Yes, Fresnillo PLC did suspend operations for six weeks at its Herradura gold mining district, but according to the company’s first-half report, silver production only declined by 2.7% (738,000 oz) compared to the same period last year. How impressive. Unfortunately, Pan American Silver, First Majestic, Endeavour Silver, Fortuna Silver, and several other companies suspended operations in Mexico for at least two months.

The following chart shows Peru’s silver production from March 2019 to June 2020:

From March-June 2020, Peru’s silver production declined 615 metric tons (19.8 million oz) versus the same four months in 2019.Interestingly, Mexico only lost 352 metric tons (11.3 million oz) during April and May. Regardless, the combined total production losses from these two countries already total 31 million oz, nearly the same amount produced by the United States last year (31.5 million oz).

I believe the curtailment of the global silver mine supply has been one of the factors impacting the silver price.  I will explain more about this in my SILVER MARKET UPDATE to come out tomorrow on Youtube.