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moneymetals

WORLD’S LARGEST SILVER MINES: Suffer Falling Ore Grades & Rising Costs

The world’s two largest silver mines have seen their productivity decline substantially due to falling ore grades and rising costs. Gone are the days when silver mines could produce silver at 15-20 ounces per ton. Today, the Primary Silver Mining Industry is likely producing silver at an average yield of 4-5 ounces per ton.

In my newest video, I discuss the changes that have taken place in the world’s two largest silver mines, the Cannington Mine in Australia and the Fresnillo Mine in Mexico. Falling ore grades and rising energy costs have contributed to the doubling and tripling of production costs at many silver mining companies. Investors who believe it still only costs $5 an ounce to produce silver, as it did in 1999, fail to grasp what is taking place in the silver mining industry:


A big problem that has confused investors is the reporting of the “CASH COST” metric by the mining industry. Some silver mining companies can brag that they have a very low cast cost of $5 an ounce, but they arrive at that figure by deducting their “by-product credits.” By-product credits are the revenues they receive from producing copper, zinc, lead, and gold along with their silver.


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