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Silver Mining vs. Gold Mining: The Dynamics Explained - Jeff Nielson

Silver Mining vs. Gold Mining: The Dynamics Explained - Jeff Nielson
By Jeff Nielson 2 years ago 10274 Views 13 comments

July 20, 2016

Understanding the dynamics and the differences between the silver mining industry and the gold mining industry is simple. It’s all in the numbers. What is somewhat more challenging is to decipher what these numbers really mean.

A reader recently made a valid observation in endeavouring to “explain” the current, extremely skewed , gold/silver price ratio . Historically (for more than 4,000 years), this ratio hovered at around a 15:1 level. Over the last 100+ years; this price ratio has exploded, at times exceeding a ratio of 80:1.

It was noted by the reader that on a cost per ounce basis today, it is more expensive for the mining companies presently in operation to mine their gold deposits, versus the relative cost-per-ounce for companies presently in operation to mine their silver. Thus, according to this reasoning, gold/silver prices should be skewed to such an absurd degree.

It seems like a reasonable argument. Indeed, at first glance the logic seems almost irrefutable. It is only when we step back, and view precious metals mining from a broader, long term perspective that we see that what this observation actually proves is something quite opposite to its surface appearance.

First, some context. Gold and silver are deemed to be “precious” metals because in relative terms they are much, more scarce than industrial “base metals”, such as lead, zinc, iron, and even copper. However, gold, in particular, is found in most regions of the world, in varying concentrations. Silver, for reasons known only to the geologists, is more abundant in the New World: North and South America. On average, silver exists at a 17:1 ratio versus gold in the Earth’s crust.

Humanity has mined these metals for well over 4,000 years. Until approximately a century ago; the world has always gotten most of its silver from silver mines. Similarly, we get most of our iron from iron mines. We get most of our copper from copper mines. And we get most of our gold from gold mines.

This is elementary logic. We require metals for industrial purposes, or (in the case of gold and silver) also for use as money and jewelry. The most efficient means to acquire these metals is to search for where they are found in greatest abundance, and then mine those deposits.

Then, suddenly, a little over 100 years ago, the dynamics of precious metals mining began to change, for the first time in more than four millennia. While the world continued to get the vast majority of its gold from gold mining, we began to get a smaller and smaller percentage of our silver from silver mines .

Instead, we began getting a greater and greater percentage of our silver as a “byproduct” of other mining. Many of the world’s richest ore deposits are polymetallic, meaning the ore being mined contains several metals, in significant percentages. Thus the world began to get more and more of its silver from, in particular, copper mines and lead/zinc mines.

Eventually, we started to get a majority of our silver via this byproduct production. For the past, several decades, we have gotten at least 75% of our annual supply of silver as byproducts, and often more than 80%. How and why did this happen? It’s all in the numbers.

Look at the chart above, and what do we see, starting a little over 100 years ago? We see the price of silver, in real dollars, start to go lower and lower and lower. The reason for the steadily falling price of silver 100 years ago is the same as the reason for the steadily falling price in recent years: price manipulation. Those readers wanting/needing more education in this area would be well-served by reviewing Charles Savoie’s chronology, titled “The Silver Stealers” .

Putting aside the reason for the relentless decline in the price of silver, the effect of this relentless price-destruction was obvious. It became more and more “expensive” to mine silver (because of the perpetually declining price). Thus, one by one, the world’s silver mines began to close.

When prices hit their despicable bottom in this Century of Manipulation, the banking oligarchs had driven the price of silver to a 600-year low, in real dollars. The result of this systemic crime was that well over 90% of the world’s silver mines were driven out of business, and the mines were mothballed, or simply abandoned.

As the world’s silver mines were driven out of business by the perennial price-manipulation of the banking crime syndicate , a greater and greater percentage of the world’s silver came as a byproduct of other mining, by default. This is the only reason why we do not continue to get most of our silver from silver mines, just as humanity has done for more than 4,000 years.

Obviously, this is a dynamic which could/can be reversed. If the price of silver began to steadily rise, and even approached its fair-market value, we would see this trend completely reverse . More and more silver mines would go into production. A steadily rising percentage of our silver would come from silver mines, and soon the vast majority. Equilibrium (and sanity) would be restored to precious metals mining

The price of silver is no longer below $4/oz, as it was at the original 600-year low. Today, after a slight recovery, the price of silver teeter-totters around the $20/oz level. Many readers may look at this elevated nominal price for silver and ask why we have not seen this dynamic already start to reverse.

There are two facets in response to such thinking. First of all, if silver was priced at an historic norm (versus the cost of labour), a fair-market price for silver today would be somewhere around $1,000/oz. Some readers may choose other metrics for estimating their own “fair-market value”, but by any rational calculation, we would still be dealing with some three-digit number as a price for silver.

Relative to those numbers, the current $20 (USD) price is pathetically low, which is why most of the world’s silver mines remain closed, and many large deposits of silver (at lower grades) remain un-mined. The dearth of silver mining is further evidentiary proof that silver is grossly under-priced – and proof that this under-pricing can only be the result of price manipulation.

As noted in a previous commentary, it has now been established that the silver market has had a supply deficit for roughly 30 consecutive years , if not longer. This is unprecedented, throughout history, anywhere else in the world’s spectrum of commodities.

What is supposed to happen, when any commodity experiences a supply deficit? Elementary supply/demand analysis provides us with the answer. The price rises. This rise in price discourages demand, while it stimulates supply (because it becomes more profitable to produce). The price continues to rise until the deficit is eliminated, and equilibrium is restored. The economics term for this principle is price discovery.

This is what happens in all legitimate markets. The fact that this has not happened, the fact that we have not had real “price discovery” in the silver market for three decades, is absolutely conclusive proof of systemic price-manipulation. There could never be any legitimate explanation for the complete absence of price discovery in any market, for three decades .

There is only one reason why it has been possible to sustain this price-manipulation, at such an extreme level, for three decades and more. It is because as “precious metals”, both gold and silver tend to be conserved. Thus, over a period of more than 4,000 years, humanity accumulated tremendous stockpiles of gold and silver. How the oligarchs acquired control of much of these stockpiles, and how much (silver) remains is the subject matter of another discussion.

The bottom-line is that it is only through bleeding these massive stockpiles onto the market, year after year, decade after decade, that silver price-manipulation could be sustained, at a cost of decimating the global silver mining industry. The other reason why a $20/oz (USD) price for silver is not remotely sufficient to restore the world’s silver mining industry can be seen by looking at the (familiar) chart below – of the Bernanke Helicopter-Drop.

The point here should be obvious. After the most-extreme episode of monetary dilution of any major nation in our modern history; in real dollars, today’s $20/oz US nominal price for silver is lower than the sub-$4/oz (nominal) price which we had twenty years ago. In real dollars; the price of silver remains mired at a 600-year low – yet we have some people referring to recent, modest price action as “a rally” .

The perversion here should be obvious to most readers, even without the benefit of the preceding analysis. Ask the bankers (or their media sycophants) why we get most of our silver as a byproduct of other mining, and you’ll get some variation of the response that there are not enough high-quality deposits of silver to support more silver mines.

This is absurd. If there is “not enough” silver to support more silver mines, why do we continue to get the vast majority of the world’s gold from gold mines – even though the price of gold is also manipulated lower (to a lesser extent)?

As previously noted, silver is 17 times as abundant as gold. If it was gold where most of the world’s supply came as a byproduct, this might be rational – because of gold’s considerably greater scarcity. There can be no rational/legitimate explanation as to why we get most of our gold from “gold mines”, while the same is not true with silver.

Price silver at $1,000/oz (USD), or price it even at $200/oz, and keep it there (in real dollars), and we would see a return to sanity and legitimacy in precious metals mining. Once again the world would get the vast majority of its silver from “silver mines”.

The near-extinction of silver mining around the world is absolutely conclusive evidentiary proof of the extreme, sustained, downward manipulation of the price of silver. Equally, if (when) the world once again is getting most of its silver from silver mines, this will be evidentiary proof that silver is at or approaching its fair-market value. Until we see this occur, we will continue to have irrefutable proof of the criminal price-manipulation taking place in this sector.

Jeff Nielson is co-founder and managing partner of Bullion Bulls Canada; a website which provides precious metals commentary, economic analysis, and mining information to readers and investors. Jeff originally came to the precious metals sector as an investor around the middle of last decade, but with a background in economics and law, he soon decided this was where he wanted to make the focus of his career. His website is www.bullionbullscanada.com.

The views and opinions expressed in this material are those of the author as of the publication date, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.

XC Skater 2 years ago at 6:39 PM
Thanks for writing a whole new article around my questions Jeff, I'm flattered!

"There can be no rational/legitimate explanation as to why we get most of our gold from “gold mines”, while the same is not true with silver."

What about old-fashioned demand? By-product silver and gold just manifest themselves based on how much and where there is base metal mining. Silver and gold prices nor demand affect that.

In gold we see that twice the mining+scrap supply is going to new buyers. In silver, while there are disagreements to how long now and to which extent, demand is pretty much matching supply or vice versa. There is no great incentive to mine more silver. And while it doesn't help that little or no money can be made, issuing stock does seem to keep these primary miners afloat.
At higher demand for silver relative to supply, prices might rise and make mining it more attractive. In gold mining they are not getting rich either, but at least there is (extra) solid demand. And since gold mines can issue fresh stock and keep the business afloat, why not continue? Management is being paid, workers are having jobs, the market is eagerly buying the gold, and shareholders are filling the gap to break even as needed. I don't say this is how a business should be run, but for years we've seen it run in this way.
The dispicably low prices over the past years have not exactly caused enough mines to close for us to feel a diminished supply. Some clse, others ramp up.

I don't see why silver mines should somehow produce more silver to get a similar shared from primary mines compared to gold, just for the heck of it. In silver, the demand is not there to justify doubling output. And yes, this output would be mined at higher cost due to current high grading to combat low market prices.
If primary gold miners were to merely increase production for the whole market to meet demand, it would also cause huge cost increase. I could argue that gold production is too low, and its price even more suppressed compared to silver. Gold miners don't have the faintest shot at meeting demand and break even. Silver miners are doing it already, helped by solid output from base metals.

If a metal should be mined twice its demand, eventually the streets will be paved in it. It seems everyone can still obtain all the silver they want, at spot, so above ground reserves seem to be at least sufficient to service the market. And that's without the now vast reserve among individual stackers. Several billion ounces (annual productions) are in stackers' hands. And those are strong hands, judging from diminishing scrap figures these meagre years. Where-ever the supply is coming from (alleged deficit), it's not coming from them it seems.

I'm by no means an expert, but I understand that over the past 100 years, primary silver mines have been able to upscale and streamline their operations better due to technical advancements and bigger equipment. It's still a surface mining business, correct? In gold, I see more vertical shaft mining which is highly labour (health risk) intensive. What's there to scale up?

"Thus, according to this reasoning, gold/silver prices should be skewed to such an absurd degree."
This line makes the author seems prejudice on the matter. Why is a ratio absurd, based on what? If current cost dynamics (for the next ounce to be demanded from the miners) are so nicely aligned with the current price ratio, what exactly is so absurd about it?
Price ratios fluctuate for huge irrational reasons. Cost ratios are just that, the relative mining cost between 2 minerals.

If somehow 20:1 is "fair market ratio" , what is a fair markup for a mining operation? If we adjust prices to $60 and $1320 (22:1 rather than 66:1 now), we'd see primary silver miners either doubling or tripling their costs into sales. Gold miners would still be fighting to not make a loss, while demand is twice their supply, and silver is just about in balance (depending on whose figures you take). I just cannot reconcile that.

I can see the silver ratio falling as prices go up, even ignoring the daily reality of leveraged price relationship between it and gold. But what it takes is physiical shortage due to unwillingness to sell at any price below, say $60/oz. As long as the "price finding" platforms come up with some metal, any price seems to work. This supply must fail first, then the physical market can start deciding on which prices are fair. Gold has 60 years of current production above ground. Silver, maybe 5 right now? It could take a century of consistent deficits to deplete that. Unless holders will decide to not sell below X.

In general I feel we (the stackers) have failed this market 2012-2016. Demand for bullion has been up, but in the grand scheme of things, not really worth mentioning. If there was ever a chance to run the market dry of silver, this was it. If prices find themselves around $50 soon, it will take a lot of extra cash to just keep the reserve level, let alone try and run it dry.

A thought: those who have the demand may actually be involved in creating supply, at any cost. China is a prime example, and more than significant.

My little contribution to help fate a bit, advance the timeline while giving money back to the people: http://www.silverdoctors.com/gold/gold-news/silvers-long-lost-monetary-role-lets-make-some-real-money/
Anywith with the guts to think big, find me and we'll do this thing.
Jeff Nielson 2 years ago at 12:38 PM
I'm sorry XCSkater, but your reasoning is built atop faulty premises and assertions:

"... I could argue that gold production is too low, and its price even more suppressed compared to silver."

No, with the gold/silver ratio still at close to 70:1, and the normal, rational, PHYSICAL relationship of the two metals at around 15:1, it is impossible to argue that the price of gold is too low versus silver.

"I'm by no means an expert, but I understand that over the past 100 years, primary silver mines have been able to upscale and streamline their operations better due to technical advancements and bigger equipment. It's still a surface mining business, correct?"

Correct. Silver IS still purely a surface-mining business, and this is further proof that silver is radically under-priced VERSUS GOLD. There IS surface/open-pit mining occurring with respect to gold, because gold is priced at a level where SOME of these high-tonnage/low-grade deposits are economically viable.

We NEVER see this with silver, despite the fact there are numerous high-tonnage/low-grade deposits already explored because the price of silver is (artificially) TOO LOW.

I wrote this article precisely to debunk mythology and faulty reasoning regarding silver mining. Yet I see that despite reading this piece, you don't seem to have learned anything.
XC Skater 2 years ago at 3:31 PM
Hi Jeff,

I think my posts have established that the silver mining, both from base metal by-product and primary mines, is doing MUCH better than gold in keeping up with demand.
And, that physical relationship of 15:1 bears little fundamental (merely geological) effect on the fair price of each, let alone their ratio.
If the market DEMANDS an extra ounce of silver to be mined, it's roughly going to come at a cost of $20 for a primary miner. Much more for the base miner, obviously. And extra ounce of gold CANNOT be mined at 15*$20 = $300. Else, gold mines would not be so reluctant to keep up production. We see the easily retrieved purchased and industrial applications of gold add up to rougly TWICE production, but mines are not responding because there is just no profit in it.

Now if silver mines somehow felt compelled to over-produce, build up those stockpiles, would their surplus immediately be met with demand, or would prices fall? Recent oil developments where oveproduction was allowed to exist, saw a price fall nearly no-one dared predict.
Gold is barely meeting half its demand, why should more silver be produced? Yes, if the miners coudl turn a good profit, I'm sure they'd try to squeeze out some more ounces. Right now they just produce enough to stay in business it seems, subsidized by hefty equity issuance.

The fact that there are places on Earth where some surface mining of gold is marginally viable, doesn't make it somehow confirm that silver is vastly more undervalued. Both metals show up where and in which ore they decide to show up, and do so largely independent of each other.

Please answer this question: what would be a fair markup for the respective mining sectors, say the top 60% of primary mined silver and gold? Should a mine get twice cost? Trice? And is a silver miner at the top of its game worth more than its gold counterpart?
You seem to be implying that silver miners should get 4x cost or more, where gold miners should be happy with 2x?

I see and acknowledge the historically low price of silver in inflation corrected money. However, I pose that the silver industry has achieved far greater cost reduction than the gold industry, thanks to prevalent surface deposits which could take advantage of greatly improve volume mining which is harder to implement in deep Earth gold mining, and apparently few similar surface deposits are available for gold.

As the relative abundancy of the metals is no indication at all for break even cost (they tend to show up in different ore bodies and every ore bears a different refining cost even when grade is identical), equally the fact that SOME economically viable surface gold mining exist (not just deep Earth) cannot prove that somehow silver is more underpriced.

If a two-fold difference in suply/demand ratio is not a relevant factor toward price finding.
If actual next-ounce mining costs are not a factor in price finding.
Are then geologists to be the next price finders?
Actually, having worked with some really clever people in the mining chemicals business (I was more in sales), I am confident in saying that mining specialists, those who get their hands dirty in the field as well as the lab, ultimately think about COST.

I'll give you this though, Jeff.
I can imagine that if we look at the next 10 (current) annual mining productions, Silver COULD prove to exhibit faster rise in cost. For instance due to lacklustre exploration up till today. Or depleting ore bodies that make $20 possible, skipping right to bodies that are closer to $40 for instance, or at least need new mines. Perhaps gold miners have 10 more years of $1300/oz gold to be mined, and prefer to not mine it at low prices in 5 years if they were to meet demand.
I'd love to learn more about the projected cost of mining the currently proven reserves.

I actually still do believe in 15:1 ratios, and even lower. But the driver will have to be supply&(especially)demand. We see somewhat lacklustre industrial demand, and acceleration private stacking demand. The latter obviously presents the most upside potential. If merely the Communist Party of China were to declare each citizen should try to have 2 ounces of silver to their name, not just the already promoted gold, it would create an unprecendented shortage, even if no-one tried to add more.
In silver I see a chance for craziness to emerge when gold prices soar and the currently oblivious (a large group) wake up, and scrap to get a few ounces of their own.

Gold is very plentiful. If the central banks aren't too greedy with it, even with zero fresh mining even as by-product, stacking andd jewelry demand can be met for decades or centuries to come. Silver is much less abundant above ground than the 15:1 or so still in the ground.
With the slow death of petrolium-based power and the uprising of solar, silver COULD see a huge increase in industrial demand. And then there's medical, clothing, etc. Industrial demand could double. Stacker and silver demand could do even better. Mines will be late to respond, and no-one knows how much silver is available above ground to suppress prices. So although I feel tricked by fantasy stories to come into silver back in 2010-2011, I do still believe it has some great chances. And I have little reason to swich my attention to gold, considering the long standing tradition of silver to be more volatile in big moves than gold, and believing we dus just end a terrible bear market.

I'm still believing / gambling in silver, but I feel quite strongly I am now doing it for genuine reasons, not quasi-logical ones.

Best regards,

J in Europe
Jeff Nielson 2 years ago at 8:32 AM
"J", you haven't established anything because you simply ignore my points.

"I think my posts have established that the silver mining, both from base metal by-product and primary mines, is doing MUCH better than gold in keeping up with demand."

This is ludicrous. The silver market has had a supply deficit for at least THIRTY YEARS. This is something which is unprecedented in the history of human commerce. It shows that we have not had a silver "market" in at least three decades -- because we have had ZERO price discovery for all that time. If you don't have price discovery, you don't have a market.

Until you acknowledge and address these fundamental points, your own arguments carry no weight.
Michael Bryden 2 years ago at 9:41 PM
While my knowledge of economics and mining does not compare to others, including the author, I find the rationale in this article not to be of sufficient depth (or mine) to justify the conclusion of "price manipulation" to suppress silver's "real" price, versus my understanding of "price equilibrium" (between forces of supply & demand). We have seen attempts at "cornering" the silver market and watching prices escalate in the past, followed by a tumbling silver price when the scheme was exposed, including criminal prosecutions. More recently, we have seen governments manipulate the markets post 2008-09 in the name of economic stability and safe-landings, as well as creating extended market mahem in the process. My personal view, is that silver has lost some of its favour as a precious metal, versus gold and other upstarts (e.g., platinum, etc.), and also some if its industry prominence as substitutes emerge (e.g., digital photos, etc.) and technology advances. These demand reductions, likely in "real" terms, relative to past demand are also impacting on the current prices of silver. For sure, governments are influencing (manipulating) the precious metals markets, and I agree with others' conspiracy theory(s) that there is an impending change afoot for monetary policy worldwide that could revert back to a gold standard, and/or a basket of currencies, as evidenced by the repatriations of gold reserves and covert collecting (e.g., China, etc.). These activities tend to support the shift in the gold to silver ratio, while at the same time creating sufficient uncertainty to keep precious metals' prices, especially gold, at historic lows, in real terms. I do agree with the author that current silver prices do not justify mining solely for this metal, unless the grade is sufficient to be economic (profitable) and these mines do get developed.
Jeff Nielson 2 years ago at 8:39 AM
Michael, I'm somewhat surprised that after starting your comment with this mea culpa...

"...my knowledge of economics and mining does not compare to others, including the author"

...that you then make this remark:

"My personal view, is that silver has lost some of its favour as a precious metal, versus gold and other upstarts (e.g., platinum, etc.), and also some if its industry prominence as substitutes emerge (e.g., digital photos, etc.) and technology advances."

All you're doing there is quoting the vacuous rhetoric of the mainstream media. If you get your "news" from the mainstream media you will never be well-informed.

P.S. The phrase "conspiracy theory" is now obsolete. There is only conspiracy FACT. The Big Bank crime syndicate has been CONVICTED of one gigantic conspiracy after another. And they have been charged with (but never fully prosecuted for) numerous other financial conspiracies. Criminal convictions are not "theories", they are facts.
XC Skater 2 years ago at 11:09 AM
Looking in it from the outside, one could see silver as an industrial metal for which limited primary mining is being conducted thanks solely to an upcoming coin/bar hoarding hype (called stacking) that closes the widening gap between supply and industrial+jewelry demand.

If there were no stacking demand, where would the silver price be? More mines would close, and alll that silver (200-300Moz annually) has to go SOMEWHERE. Without interest to invest in it, who'll take it on? Goldman Sachs, to repeat their aluminum price boosting scheme of withholding supply from the market?

Per my little article, there used to be a lot of silver coins in circulation. Those have mostly all been remelted for industrial destruction, or repurposed as private investment items. A new physical silver currency could totally upset supply and demand. But no-one's doing it (other than minting houses using the "ounce" non-monetary standard), not even those with supposedly millions already invested into silver. Silver proponents are more likely to do something with a blockchain thing (Max Keiser, Peter Schifff) than contact me for getting the Gram standard implemented and sold to the global public. I'm afraid because there's nothing in it for them in the short term. While it could take huge amounts of ounces off the market, towards a new user base outside the stacking community.
If the silver community gets little love from Lady Fortune, it's its own fault.
Slide 1 years ago at 6:59 AM
Great article Jeff. Miners are known to release harmful pollutants into the air and water. Is there a listing of ethical producers? Price suppression shrinks margin so are the miners forgoing ethics to keep from operating at a loss? Are the unethical producers just as criminal as the One Bank?
Also, what would be the percentage of ethics driven investors vs profit at any cost investors in the silver and gold sectors?
Jeff Nielson 1 years ago at 9:34 AM
Slide, there is quite a big difference between the Junior and Senior miners. Because their mines tend to be much smaller, they tend to be low-pollution operations. Also, Canadian Junior miners are renowned for being good corporate citizens, which is why they are generally WELCOMED into jurisdictions all over the world.

In contrast, the Seniors tend to bribe-and-bully their way into jurisdictions -- and then create a wide swath of environmental carnage in their wake.

Also, over the long term, then Junior miners provide MUCH higher rates of return to investors. This is a classic example of where bigger is NOT better.
slide 1 years ago at 11:54 AM
Thanks Jeff.
Roland 10 months ago at 7:30 PM
Couldn't agree more
C 5 months ago at 9:51 AM
So many assumptions here. Silver fell to ultra low prices because, wait for it.. It wasn't worth much, it's closer to a base metal due to most of it coming along with copper mining. Why did silver miners close?, because it wasn't worth it to mine anything more than the stuff just lying around near the top soil layer, also the silver miners did not close shop, the silver miners that were not profitable closed shop! Why else did they close up?, we stopped using it for money. Why did we stop using it for money?, because the price fluctuates, how can you use something for money when it's all hoarded up due to speculation. Also, it became an industrial metal, where it really belonged all along. Trade and commerce would halt if it were used as monetary exchange. Through the years other things have been used for money, anything of barter value can be used as a means for exchange, i.e. the oldest profession. Not long ago we didn't really have much electricity, now we do, and copper is needed. Not long ago mining was more difficult, with technology it's easier to pull out of the ground and grab all the metals in the dirt vs. oh this is just a gold, silver, copper mine only as was the case in yesteryear, those days are over!, it's not just in the numbers , it's in the dirt. Bankers didn't ruin silver, they just stopped it's use as a primary means for commerce, so that's a crime??? Restore the world's silver mining industry?, that's over, that's the past, that's old technology talking. Now, it's so easy to pull out of the ground it has little value outside of speculatory price movements and I find silver jewelry at garage sales all the time, in gram amounts like that I find it in dumpsters as well. We throw it away, once it's bought and paid for it's served it's purpose, their is no law that says it must be recycled. A good example of this is I pay .50-2.00 over spot to buy it, and when I go to sell I don't get that price, I get 2.00 or more less than spot!, so what's it really worth?, only what someone is willing to pay for it, only what they can get to send it back in to be melted, so that's a 4.00 price difference, and silver used to sell for 4.00? hmmm. Now in recent years with physical investor demand, and the creation of ETF's silver is up, and with the higher price, more plentiful than ever before in history. With investors eating up 1/4 to 1/3 of mined supply we will never (ok you never know) have a shortage of silver as our above ground supply is now enough to last a couple of years. Until the price goes back so low that's it's not viable to sift it out during copper mining we will continue to have over supply. I'm not trying to refute Jeff here, I agree with him more so than not, as I have a certain level of net distrust in the fiat system because it's so debt driven and 100% prone to failure. Still, without so much money creation where would we be?, do we even know? My main argumentative point here is when Jeff said silver is a precious metal, I don't agree with that anymore. Example being, where would we be without copper?, imagine a life without copper. I have a speculatory investment in au/ag, but I don't feel silver will have it's day until the green revolution comes (solar) and we see the fallacy or error in our ways of over use of fossil fuels when the sun is what created all those fossil fuels in the first place.
Jack 3 months ago at 4:55 AM
mining is based on the experience and also LUCk which is very important but when it should be researched first then the actual work should start so that failure rate can be minimised.

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