We running out of silver? - Truth or Fiction?

[Copper Catcher]

If you're like me you have probably read at one time or another the following statement:

The United States Geological Survey (USGS) has stated that we will run out of silver from Earth's surface around 2020.
Source: http://goldnews.bullionvault.com/peak_silver_060420096

I often wondered is this statement truth or fiction? Does this mean silver will have to come from recycling and as a by product of other mining operations or what? So I decided to go to the source and ask directly the USGS and below was their response:

Thanks for coming to the US Geological Survey with your questions on silver. I get this question frequently and am happy to respond. This information, from the Appendix C of Mineral Commodity Summaries 2011, addresses your concerns:

“Reserves data are dynamic. They may be reduced as ore is mined and/or the extraction feasibility diminishes, or more commonly, they may continue to increase as additional deposits (known or recently discovered) are developed, or currently exploited deposits are more thoroughly explored and/or new technology or economic variables improve their economic feasibility. Reserves may be considered a working inventory of mining companies’ supply of an economically extractable mineral commodity. As such, magnitude of that inventory is necessarily limited by many considerations, including cost of drilling, taxes, price of the mineral commodity being mined, and the demand for it. Reserves will be developed to the point of business needs and geologic limitations of economic ore grade and tonnage. For example, in 1970, identified and undiscovered world copper resources were estimated to contain 1.6 billion metric tons of copper, with reserves of about 280 million metric tons of copper. Since then, about 400 million metric tons of copper have been produced worldwide, but world copper reserves in 2010 were estimated to be 630 million metric tons of copper, more than double those in 1970, despite the depletion by mining of more than the original reserves estimate.

Future supplies of minerals will come from reserves and other identified resources, currently undiscovered resources in deposits that will be discovered in the future, and material that will be recycled from current in-use-stocks of mineral or from minerals in waste disposal sites. Undiscovered deposits of minerals constitute an important consideration in assessing future supplies. USGS reports provide estimates of undiscovered mineral resources using a three-part assessment methodology (Singer and Menzie, 2010). Mineral-resource assessments have been carried out for small parcels of land being evaluated for land reclassification, for the Nation, and for the world.”

There are few mines in the United States that produce only silver. For 22 of the 25 leading silver-producing mines in the United States in 2009, the source of silver was not silver ore. A report in the December 2007 issue of Platts Metals Week noted that a vice president of Hecla Mining Co. (Coeur d’Alene, ID) pointed out that the company’s Lucky Friday Mine has operated for 50 years, rarely with a projected mine life of more that 4 or 5 years based on proven and probable reserves, because of the way exploration is conducted from underground. In addition, even though silver is extracted, more silver is discovered indirectly through gold, copper, lead-zinc, and molybdenum exploration that may or may not offset the quantity that is extracted.

Reference Cited
Singer, D.A., and Menzie, W.D., 2010, Quantitative mineral resource assessments—An integrated approach: Oxford, United Kingdom, Oxford University Press, 219 p


George Bedinger
Arsenic, Mercury, and Silver
Mineral Commodity Specialist
National Minerals Information Center
US Geological Survey
989 National Center
Reston, Virginia 20192

voice: 703-648-7791
fax: 703-648-7975
e-mail: gbedinger@usgs.gov
internet: http://minerals.usgs.gov/minerals

[Beau]

.
that means buy more now.
get a better price now.

[Chief]

Vamos a ver.
Silver could be $200 a toz. It is cheap now if this plays out.
We'll see...

[Tourney64]

As price rises it becomes more economic to extract in places that weren't at a lower price. $200 is high based on these economics, but if it doesn't exist, or sudden demand rises due to new technologies it might reach $200. I stock up all the time.

[jtlee321]

This post made me think a little. You would think that if the projected mineral reserves are based on land operated mines, and you here about exploring space for possible sources of minerals such as gold and silver. What about inner space? Or more directly the oceans? I mean if 70% of the Earth's surface is covered by the Oceans of the world then why not consider mining the ocean bottom? Just by rough calculations there should be at least 2.5 times the amount of minerals awaiting to be mined below the surface of the water. Why not start developing technology to reach those deposits before developing technology to go outside our atmosphere? Look at all the underwater volcanic activity that is constantly happening. My guess is there is a good chance of discovering deposits under the ocean that would make any deposit ever found on land look like child's play. Just my two cents worth.

[dannan14]

i think you have to be correct about the sea floor. The gold dredging reality show proves that a lot of gold has made its way down the streams and rivers to the sea. The cost and difficulty of extracting it is the big issue.

[mbailey1234]

Charts like these sure don't make you think we will run out anytime soon. If we don't ever see the dollar collapse (not wanting that at all) I have a hard time believing we will see silver and gold go up like a rocket. Remember we are just hedging against inflation. Preserving our buying power.

http://www.kitco.com/charts/CPM_silver.html

Where on the demand chart does it account for silver coin production? "Other Uses?"

[jtlee321]

i think you have to be correct about the sea floor. The gold dredging reality show proves that a lot of gold has made its way down the streams and rivers to the sea. The cost and difficulty of extracting it is the big issue.

I know there is a lot of gold just off of the coast lines being deposited by erosion. What I am talking about is the amount of gold and silver that has never been above sea level. I know the cost to extract it would be high. But the amount available would have to be incredible. My point is it would have to be cheaper and easier to mine the ocean floor then to start exploring space for these minerals.

[Copper Catcher]

Getting Oil from the Global Seafloor is One Thing; but Gold, Copper, and Silver Too?
http://www.smallcapnetwork.com/Gold-Min ... /1/id/656/

Searching gold on the ocean's bottom
http://www.miningmx.com/news/gold_and_s ... bottom.htm

[SoFa]

From the USGS reply, it sounds like there is going to be plenty of silver for a long time.

[Ardent Listener]

As prices head higher or if investment demand drops there will appear a lot of silver out of private hoards. Industrial demand alone will put a strain on supply. But if safe haven demand falls no crises will be on the horizon anytime soon.

[scrapper2010]

From the USGS reply, it sounds like there is going to be plenty of silver for a long time.

That's what I got out of it too.

[beauanderos]

From the USGS reply, it sounds like there is going to be plenty of silver for a long time.

That's what I got out of it too.

I don't see how you got that. The report is written like something Bernanke would say, there are no absolutes in what you read. Everything he says is equivocal. We are already in peak silver, fewer and fewer large deposits are being discovered, certainly not enough to keep up with burgeoning demand, and the veins that are being worked now are being depleted, with only lower grade ore veins or slag heaps available for processing at much higher prices when it becomes economically feasible. We will NEVER run out of silver, but it will become prohibitively expensive to mine the little that remains as time goes on. As far as some dishoarding of silver by current holders, that has pretty much run its course through the weak hands that were in the game (courtesy of travelling road shows, cash for gold/silver, etc and the economy necessitating sales for survival). Mostly only strong hands remain.

[scrapper2010]

...... or more commonly, they may continue to increase as additional deposits (known or recently discovered) are developed, or currently exploited deposits are more thoroughly explored and/or new technology or economic variables improve their economic feasibility.

......For example, in 1970, identified and undiscovered world copper resources were estimated ...............reserves of about 280 million metric tons of copper. ........but world copper reserves in 2010 were estimated to be 630 million metric tons of copper, more than double those in 1970, despite the depletion by mining of more than the original reserves estimate.


......... A report in the December 2007 issue of Platts Metals Week noted that a vice president ..... pointed out that the company’s Lucky Friday Mine has operated for 50 years, rarely with a projected mine life of more that 4 or 5 years

Obviously I'm picking apart the report, but these are the parts that I picked out that made me think that there will be plenty of silver for a while, especially the last paragraph about the mine that has been in operation for 50 years all the while with a projected life of 4 or 5 years.

[Copper Catcher]

The reply I got reminds me of a social work professor I had in college. I remember asking him a question one day after class about a specific statement. My question was a simple one, was the statement true or was it false. His answer was, Yes.

[everything]

I think the Japanese just found a rare earth metals deposit in the ocean, but the metal is not expensive enough yet to exploit it. I think in Utah we have a big rare earth metals mine going on line within about a year or so. It was only about ten years ago silver mining was bust, at $4 or $5 an oz. it was barely worth it so the next couple of years should be interesting.

I'll have to agree with others about running out. I think the planet is a pretty big place, we don't seem to worried about oil running out, so I doubt silver would run out either.

[Mossy]

i think you have to be correct about the sea floor. The gold dredging reality show proves that a lot of gold has made its way down the streams and rivers to the sea. The cost and difficulty of extracting it is the big issue.

I know there is a lot of gold just off of the coast lines being deposited by erosion. What I am talking about is the amount of gold and silver that has never been above sea level. I know the cost to extract it would be high. But the amount available would have to be incredible. My point is it would have to be cheaper and easier to mine the ocean floor then to start exploring space for these minerals.

They are trying to exploit gold deposited by hot water from below the surface. "Volcanic" sortof, similar to the way gold is deposited in the quartz veins in hard rock. They are not working placer.

[beauanderos]

we don't seem to worried about oil running out, so I doubt silver would run out either.

You're going to believe what you already believe... and facts won't convince you otherwise. I give up on you guys. And... oh? Good luck on that oil not running out.

[everything]

I was being cynical about the oil situation. I have many questions about this topic myself, I've been trying to read up on some stuff from mining geologists, they are the ones who run the numbers that go to the managers to project, or sell.

[Engineer]

The reports and scientific 'facts' are so biased by money and politics these days that its hard to know what to believe...but most people will see it how they want to see it.

If you haven't been in a position so see with your own eyes just how much the 'facts' reported in scientific studies are influenced by the bottom line of the company (or political faction) funding the study, its hard to realize just how biased they can be. I know this because I used to write those papers, and they never got published unless they showed things the way the funding source wanted them to be shown.

Is the USGS correct that we're running out of silver? It's certainly possible, but it helps to remember that a decade ago they were dead wrong when they reported the US was running out of natural gas. Until I have more actual facts at my disposal, I'll go with the WolframAlpha entry stating that silver comprises .079g/ton of earth's crust.

[beauanderos]

I was being cynical about the oil situation. I have many questions about this topic myself, I've been trying to read up on some stuff from mining geologists, they are the ones who run the numbers that go to the managers to project, or sell.

That's the trouble with written stuff. You can't detect tone. I didn't get cynicism out of that, I got snarky sarcasm. My bad. Sorry I went off on you. Just tense (thanks for that, bullion banksters without fathers).

[68Camaro]

The important questions really are, what the profit point for extracting silver from the earth's crust, and at what rate can it be extracted at a given price?

[SoFa]

What I got out of the USGS reply was that the estimates of known deposits of silver should not be taken as meaning that is all the silver that actually exists and can be mined. It's just a snapshot of what is known at a particular point in time. Thus, we cannot really conclude that silver is running out (or not running out) from these reports. It's interesting data, but it doesn't mean silver will run out.

I tend to think there is a lot more extractable silver that is not accounted for in the current data. It's just that they keep mining more silver than was known to exist in the past reports.

[68Camaro]

Again, what matters is the price point. That is what you mean be extractable, because it is all extractable if you want it badly enough. There are literally billions of tons of silver in the earth, somewhere. But if it costs more to get to it than it is worth, then it has no further value. Peak silver is relative to a given constant price. If the price if silver goes to $1000/oz, we will see new methods of getting to silver and we will move to a new peak silver point further out in time. The new methods will eventually bring the price back down to some point above the new costs of acquisition. Right now the average cost of gold extraction is something like $1200/oz, and the average price of silver extraction is in the teens (but enabled by demand for copper and other base metals). So you're not going to see prices go below those numbers, as a base.

[reddirtcoins]

You know, I read last year China was the best at $358 an Oz..
Look at this older report for another country : Canadian miner Nevsun Resources reports
http://www.miningweekly.com/article/70- ... 2010-08-27
I think it is more like $400 but who knows...

also.. nice little "ha" chart
http://gold.infomine.com/commodities/gl ... posits.pdf