"Peak Silver" Is About To Rock Markets And Bring Huge Profits To Smart Buyers

So, if these mines can get back to producing, that will help boost silver output this year… but it's not quite that simple.

Here's why…

Silver Mining Is a Tough Game… and Getting Tougher

According to recent research by SRSrocco Report, two of the world's largest primary silver mines have been facing some very stiff headwinds.

The troubles come mainly in the form of falling ore grades, expressed in ounces of silver per ton of ore mined, combined with rising production costs.

At Fresnillo Plc.'s Fresnillo mine, in Zacatecas, Mexico, 2010 silver production stood at 35.9 million ounces. The ore grade: 14.1 ounces per ton.

By 2015, it had fallen to less than half the 2010 haul. That year, output was 15.6 million ounces, at an average ore grade of 6.5 ounces per ton.

That means they had to mine more than twice as much rock to get at less than half as much silver. Not a great scenario, though in the last two years output is up slightly, and the yield in ounces per ton has also improved marginally.

The world's largest primary silver mine is South32 Ltd.'s (ASX: S32) Cannington Mine, in Queensland, Australia.

Between 2004 and 2014, its output fell from 44 million ounces produced at an average grade of 18 ounces per ton all the way down to 22.6 million ounces at nine ounces per ton.

So, in that 10-year span, the Cannington mine, one of the world's most important, lost half its output.

In the last three years, Cannington's output has plummeted even further, down to 12 million ounces produced at an average grade of 6.2 ounces per ton.

So as you can see, some of the biggest mines are working a lot harder and still see their output falling.

Now let's look at it from a country perspective.

Silver Production Has Plummeted All Over the World

The following table (we only have numbers up to 2016 for now) ranks countries by annual silver output.

Silver

View single page >> |

Disclosure: None.

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.