dinsdag 23 september 2014

Which Silver Mine to Choose: AISC Update

As many precious metals investors know, the price of silver (SLV) was smashed to 2008 lows of $17.5/ounce (see chart from Kitco below).


Silver premiums have been moving up particularly at Shanghai, where silver inventories are very low. It is also very interesting to note that while the paper silver price has dropped, the mining companies are not eager to sell their physical silver at lower prices. You won't get your hands on the physical silver in large quantities. For example, First Majestic Silver Corp. still sells its silver bullion at $23/ounce and has been doing this for one year already.

Nevertheless, investors should mitigate the risks in their silver miners portfolio. If silver prices keep slumping below the all-in sustaining costs of silver production, the company won't be able to make a profit. That's why I summarized a table of the most recent AISC numbers of several notable silver mining companies and compared it to the 2013 numbers.

You can find the analysis here.

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