Friday, August 16, 2013

Silver Mining Industry: Unsustainable at Present Market Conditions

Steve St. Angelo

The primary silver mining industry is not sustainable at present market prices. By the end of August, we should have a pretty good idea of how bad the losses will be.
According to St. Angelo’s calculations with respect to the top 12 primary silver miners, the net income break-even for the group as a whole was $25.40 in Q1 2013. The average realized price of silver for this group during the first quarter of 2013 was $29.85, which resulted in a $90.7 million in net income from the top 12 miners.
The estimated silver break-even of $26.45 is higher than the net income break-even ($25.40), because St. Angelo separates the by-product revenue to obtain a more realistic pure silver break-even figure.
St. Angelo is not trying to be negative on the silver miners, but rather is trying to show how bad the results will be because of the fact that gold and silver have been victims of the Fed's policies of protecting the dollar & US Treasury market at any cost.
Since the beginning of 2013, silver is down 40% and gold is down 23%, while copper has only lost 14% of its value. This is no coincidence.
The primary gold and silver miners are the real banks of the world. Even though the current market situation for these miners is not positive, that will change in time. There is no way that the primary silver mining industry can sustain itself at these current low paper prices.
“I have tried to give an idea of what the losses will be for the top 12 primary silver miners in my group,” writes St. Angelo, “but these will be even greater in the third quarter if prices don't recover. It is quite a shame that these mining companies who are providing real wealth to the market and employing thousands with high paying jobs have to suffer while the fiat banking system continues to leech and steal wealth from society.”
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