05-03-2012, 09:27 AM
A good read. Little long though:
05-03-2012, 09:41 AM
i think the final remarks and conclusions sum it up well... will read it all later...
05-03-2012, 10:36 AM
Most excellent article! Definitely take the time to read it if you find yourself questioning your sanity in the markets.
To summarize for those without the time, he makes the following points:
1. The top two silver miners decreased production while mining more ore (lower grade g/tons)
2. Market sentiment needs to be controlled, which is substantiated by the 3 beat downs over the last year.
3. Comex inventories increasing have no correlation to the price of silver
4. Rising energy costs will hamper mining, and are already starting to show effects.
5. Ore grades are declining. One amazing statistic shown: From 1935-1993 (unfortunately a bit outdated stats, would be great to see the updated ones) there was a 1240% increase in ore mined in the USA for a total of 7.8% increase in silver production. Ore grades declined by 91.8% over that same period. This decline is also seen in the two largest mines, Cannington and Fresnillo. Cannington dropped from 38 million ounces in 2002 to 32 in 2011
He makes a few other points, but these are the most salient.
Once again, thank you for an excellent article with great analysis.