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January 31 2018

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.


Continue to the full article here: (source

January 25 2018

moneymetals

The Market Underestimates The Tremendous Energy Consumption By The Gold Mining Industry

While the gold mining industry reports energy as only 15-20% of its total production costs, the total amount consumed by the industry is much higher. The market underestimates the amount of energy consumed by the gold mining industry because of the way it is listed in their financial statements. Thus, it takes a great deal more energy to produce gold than the market realizes.

Due to the complex supply chain system that we depend upon, most of the energy that is consumed in the production of goods, services, materials, metals, and commodities is hidden from plain sight.For example, a gold mining company will list “Tire Costs” in their Financial and Sustainability Reports. However, even though a tire cost is listed as a material cost, the majority of a tire’s production cost comes from burning energy… in all forms and in all stages.

For example, Barrick Gold consumed nearly 25,000 tons of tires in 2013 on its mining operations. According to the Rubber Manufacturing Association, it takes roughly 7 gallons of oil to produce a standard car tire. And from the article, This Is What A $42,500 Tire Looks Like, stated the following:

Caterpillar 797 tire

One of the many unique aspects of the Cat 797 are its tires: More than 13-feet-tall, weighing 11,860 pounds, each Michelin or Bridgestone 59/80R63 XDR tire costs $42,500 and that’s when you buy the full set of six required by each $5.5 million truck.

Contains nearly 2,000 pounds of steel, enough to build two small cars and enough rubber to make 600 tires to put on them.

If the Rubber Manufacturing Association says it takes 7 gallons of oil to make one standard tire, and this article claims that the 13-feet-tall tire used by the Caterpillar 797 haul truck contains enough rubber to make 600 tires, then it takes 4,200 gallons of oil to make one of these giant tires. If we take a more conservative estimation of a smaller mining truck tire, it would likely consume at least 2,000 gallons or oil, or nearly 50 barrels of oil.

​Continue reading.. (source

October 05 2017

moneymetals

Rep. Seeks to Restore Mining After Last-Minute Obama Ban

Inline image 1

(Emily Larsen, Liberty Headlines) Following mining pushback from environmental groups and hasty actions in the final weeks of the Obama administration, Rep. Tom Emmer (R-Minn.) introduced the Minnesota Economic Rights (MINER) in the Superior National Forests Act, which aims to restore mineral rights in attempt to boost the economy in the northern part of his state.

Tom emmer/image: youtube

Tom Emmer/IMAGE: YouTube

The bill is a response to ongoing controversy regarding mining lease applications near the Boundary Waters Canoe Area Wilderness, close to the border of Canada. About 250,000 outdoor enthusiasts visit the 1.1 million-acre wilderness area each year.

“In their final hours, the Obama Administration enacted a series of harmful and reckless policies, which have hindered our ability to utilize our state’s abundance of natural resources and bring jobs to a part of our state that badly needs them,” said Emmer in a press release.

One of the final actions of the Obama administration in December was to reject a company’s request to renew a mining lease next to the Boundary Waters Canoe Area Wilderness, and placed a two-year mining ban on 234,000 acres of public land. The MINER Act would require approval from Congress to prohibit mining on federal lands.

“The Boundary Waters is a natural treasure, special to the 150,000 who canoe, fish, and recreate there each year, and is the economic life blood to local business that depend on a pristine natural resource,” saidformer Agriculture Secretary Tom Vilsack and former Interior Secretary Sally Jewell in a joint statement at the time of the denial. “I have asked Interior to take a time out, conduct a careful environmental analysis and engage the public on whether future mining should be authorized on any federal land next door to the Boundary Waters.”

Twin Metals Minnesota, a mining company at the center of the controversy, holds two expired mineral leases on the area, on Forest Service-controlled land and Bureau of Land Management-controlled underground minerals. The mining leases date back to 1966, before the federal government established safety and environmental review standards which now apply to mining lease locations. Twin Metals applied for the lease renewal in 2012.

A different mining company, PolyMet Mining, applied for a new copper-nickel sulfide mining permit near the wilderness area. PolyMet’s proposed mine faces environmental backlash as well. The Center for Biological Diversity and Earthworks filed a lawsuit against the US Fish and Wildlife Service and the US Forest Service, claiming the approval of the mine violates the Endangered Species Act.

The MINER Act explicitly prohibits mineral leases within the Boundary Waters Wilderness. But even though the mines aren’t within the protected wildness, environmental groups argue that any spills of toxic chemicals from sulfur-ore mining in the area could contaminate the 1,200 miles of streams within the Boundary Waters Wilderness. Sulfur-ore mining would be new to the part of the state.

The MINER Act would also limit the extension or establishment of national monuments in Minnesota without an action of Congress. It is a possibility that environmentalists lobby to extend the protected wilderness area to include the areas of proposed mines. The Obama administration designated more national monuments than George W. Bush and Bill Clinton combined.

Residents of Northern Minnesota hope the new proposed mines will help improve the economy.

“Jobs for Minnesotans fully supports this legislation which provides hope and opportunity to Minnesota’s mining region,” said Nancy Norr, chairwoman of the group, at a House Natural Resources Committee hearing in July.

Jason George, Legislative and Special Projects Director of the International Union of Operating Engineers Local 49, also expressed support for Emmer’s actions to restore mineral rights.

“It is time that environmental extremists and Washington bureaucrats stop telling the good people of the Iron Range what is best for them,” said George.

Article Source

August 08 2017

moneymetals

August 01 2017

moneymetals

Chile’s Silver Production Down A Stunning 32%

In an interesting change of events, the world’s fifth largest silver producer saw its production plunge 32% in May versus the same month last year. Chile, a country which produced a record high of 54 million oz of silver in 2014, is forecasted to see its mine supply decline to less than 40 million oz in 2017.

According to the most recently released data by COCHILCO – Chile’s Ministry of Mines, the country’s silver production in May fell to 97.1 metric tons (3.1 million oz) versus 141.9 metric tons (4.6 million oz) in the same month last year:

Part of the reason for the decline was a union strike and shutdown at the huge by-product silver Escondida Copper Mine. However, by-product silver production at Escondida was only down 38 metric tons (1.2 million oz) during the first six months of the year (BHP Billiton). This is only a small percentage of the overall 170 metric tons (5.5 million oz) decline in Chile’s copper production in the first five months of 2017 versus the same period last year:

According to COCHILCO’s preliminary production figures, Chile produced 655 metric tons of silver Jan-May 2016 versus 485 metric tons Jan-May 2017. Again, this a difference of 170 metric tons.... or a 26% decline year to date

​Continue reading...​

July 11 2017

moneymetals

WORLD’S 2ND LARGEST SILVER MINE SHUT DOWN: Implications For Company & Market

World's 2nd largest silver mine shut down

The world’s second largest primary silver mine, Tahoe Resources Escobal Mine, was forced to shut down operations in Guatemala by a ruling from the country’s Supreme Court. This was due to a provisional decision by the Guatemalan Supreme court in respect of a request by CALAS, an anti-mining group, for an order to temporarily suspend the license to operate the Escobal Mine until there is a full hearing. (picture courtesy of Tahoe Resources)

While this story has been out for a few days, I believe there is a great deal of misinformation on the Mainstream and Alternative media about the current situation and future outcome of Tahoe’s flagship Escobal Mine. Some analysis suggests that this is just a small speed-bump for Tahoe, so when they are able to address disputed regulatory issues, production and profits will shortly return once again.

However, there also seems to be a another side to the story that could cause more problems for Tahoe with a much longer suspension time than the company is publicly stating. For example, the following was published in the article… Tahoe Resources forced to halt Escobal mine in Guatemala:

While Tahoe is preparing for a three-month mine suspension, Haywood analysts project no production from the mine for the remainder of 2017.

Here we can see that the company (Tahoe) is very optimistic that production at Escobal will start back in three months, while Haywood analysts forecast operations won’t likely resume this year. So, who should we believe, or which forecast is more correct? Before we get into the details, let’s first look at the impact of suspending the 2nd largest primary silver mine in the world on the market.

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