Cost to produce an ounce of gold is 600.00, how about silver?

BigE

"Cost" is definitely a vague term, I understand. But you hear this figure is around 600.00 for gold, have not heard figures for silver though. Anyone know approximately?-----------------BigE

CaptHenway

How can you make such a statement? I would imagine that the cost to produce must vary wildly from mine to mine, and change over time as new deposits are located and old ones play out.
TD

BigE

Ive seen the cost to produce gold mentioned many times in news articles and mining stock analysis, maybe that is where I should check for silver also-----------------------BigE

thatboyaintright

Silver production is ususally a by product of other metals mining like copper or gold, right ? So the cost of mining an ounce of silver would vary wildly from a few cents per ounce to several dollars per ounce depending on the cost of mining the main product. Or am I totally off base ? Are there any more pure silver operations left ?

PerryHall

<< <i>How can you make such a statement? I would imagine that the cost to produce must vary wildly from mine to mine, and change over time as new deposits are located and old ones play out.
TD >>



I've seen this number used and it's an average price to produce gold. Obviously the price varies depending where it's mined and refined.

Steve27

<< <i>How can you make such a statement? I would imagine that the cost to produce must vary wildly from mine to mine, and change over time as new deposits are located and old ones play out.
TD >>



Read here LINK

Steve27

<< <i>"Cost" is definitely a vague term, I understand. But you hear this figure is around 600.00 for gold, have not heard figures for silver though. Anyone know approximately?-----------------BigE >>



After reviewing a bunch of different sources, the best estimate appears to be $7-10/oz but some mines may be lower.

rodzm

It is possible for companies to produce silver at negative cost partly bcause silver is a by product of mining other elements

In 2009 Hecla had a total production costs per ounce ($/oz.) of $7.77 while in 2007 it was actually (negative) -$.60

roadrunner

Across diff companies and mines this year I've seen the "operational" cost of gold/oz range from low $400's to mid $700's. But that price does not include a host of issues that now add about $100-$200 per oz to the total: derivative bets, currency swaps, volatile currency ratios, lack of electricity (South Africa), rising cost of supplies/equipment and fuel, labor costs and strikes, permits being pulled or modified, nationalization overtures (ie Venezuela), increased taxes or interest (hello Australia!), less than expected ore grades, lack of new and viable projects, high exploration and takeover costs, constant share dilution to keep funding new projects, escalating royalty costs paid to other corporations or sovereign states/nations, etc. Take any 1 or 2 of these each quarter and a wrong turn can make the whole quarter unprofitable. This has been generally the case for many larger miners over the past 9 months. One could say they are no more profitable today than when gold was back at $500-$700 per ounce. The operational cost is hard enough to pin down. But tossing in all those other factors tends to make it 2X harder. One quarter the stock is a shining star, and next quarter a dirty dog based on a $50 MILL derivatives hit.

Today Gammon Gold announced they were suspending operations at their El Cubo, Mexico mine due to corrupt union leaders causing output to slow to a crawl. 400 union workers terminated. Gammon management is calling the mine "uneconomic" with the current union stance. 2 months ago Buenaventura was entertaining strikes at multiple mines for the 2nd time in a year. It would not surprise me to see an all-in price of mining gold at $1000/oz. in only a couple of years......just saw Gammon's price today....down 10% in morning trading, and just after it had slowly crawled back from an earlier setback this year.

roadrunner

Overdate

<< derivative bets, currency swaps, volatile currency ratios, lack of electricity (South Africa), rising cost of supplies/equipment and fuel, labor costs and strikes, permits being pulled or modified, nationalization overtures (ie Venezuela), increased taxes or interest (hello Australia!), less than expected ore grades, lack of new and viable projects, high exploration and takeover costs, constant share dilution to keep funding new projects, escalating royalty costs paid to other corporations or sovereign states/nations, etc. >>

Every one of these negatives for owning gold mining stocks is a positive for owning gold.

sumrtym

Back when silver was around $4 an ounce (2001 time frame) silver cost for mining and refining coming out of Mexico was about $2.50 an ounce. I don't imagine the costs are that much different now.