Realcent.org

Take this, as with all info, with a grain of salt - source of this is the silver institute, so of course some built-in potential bias in unknown ways.

https://www.silverinstitute.org/site/20 ... l-in-2013/

Third highest annual average price (despite having dropped from 2011)
Record overall physical demand
Record mine output (at a declining rate of increase) +26.9Moz
Major drop in scrap returns: -60.8Moz (more than offsets mining increase)
Near record industrial use (only slight drop, <half a percent, despite poor global economy)
Record coin/bar demand: up +106.3Moz or +76% year to year

No evidence in these records of a formal Chinese government sell-off (e.g., BIll Holter theory), but hard to tell if that could be detected in the SI stats.

Thanks Rich! Interesting stats. But I was confused by this statement: "Primary silver mine cash costs stood at US$9.27 an ounce, increasing 1 percent in dollar terms." Are they saying that it only cost $9.27 to pull an ounce of silver out the ground? I've read/heard that it was around $20.00 or so?

On production cost, from what I've read its easy to end up with apples to oranges depending on who wants to make what point for what reason, and at our level the truth can appear a bit murky.

It is true that there are completely different costs for different mines of different types in different parts of the world with different primary objectives. Sorting that out is hard.

I do believe the average cost of an ounce from new mines is *well* over $20/oz. That gives you an idea of what amount of mining expansion is likely to occur, which is not much at this price.

From existing mines, I tend to believe the global production cost of a given new new ounce (not necesarily counting cost of capital, profit, M&R, etc) and mixing high-yield mines with low-yield mines, and mixing PM primary mines with base metal mines (that have silver byproduct) with is probably less than $10. But much of that yield is from already expensed capital and the big mines are wearing out and/or dependent on a base metal market (the silver yield from these goes to zero if the need for base metals goes away). And based on the number of mining companies with marginal profits at the current price, I suspect by the time you burden the cost per ounce with the reality of running a corporation that the actual delivered cost is higher than $10/oz. Note that miners will want to publicize low costs per ounce to make themeslves look good to the investor, so silver institute data on this could be suspect.

$9.27 is very misleading. There are costs and so-called all-in costs which include items such as maintenance and are therefore a lot higher. Also, if $9.27 was legit, then why did so many miners lose money last year when silver was way above $9.27 all year? In theory, they should have made money hand over fist if the true cost was anywhere near $9.27.