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Shaky Silver Prices and Stable Silver Producers in Mexico
Even with seemingly unstable silver prices silver mining and silver exploration in Mexico continues to move with strength.
The spot price of silver has been bouncing around like a beach ball lately and silver seems to be underperforming when compared to gold - but there's still a lot of action in the Mexico silver industry.
MxMining has 37 producing Mexican Silver Mines available in the database and many more exploration projects that have silver as a target mineral. Silver is the most common target mineral in all the projects listed on MxMining with 207 projects targeting silver followed by 187 projects targeting gold.
One of the newest silver production startups in Mexico is the Dolores Project in the state of Chihuahua. The Dolores Project is run by Minefinders Corporation who announced the first gold and silver pour for the Dolores Project on Nov 17, 2008.
Minefinders states that, "Total average cash operating costs per ounce of gold and ounce of gold-equivalent silver, based on a ratio of silver to gold of 52:1, are estimated at $297 for the life of the mine." Minefinders cost per ounce of silver on the Dolores Project is under $6 per ounce. Silver would have to return to pre 2003 levels for this production cost to become unprofitable.
Some companies that are producing silver in Mexico are working on reducing their production costs. Endeavour Silver Corporation boasts a "production cost of $7.37 per ounce of silver in Q4 2008 " for their silver and gold producing Guanacevi Project in the state of Durango.
Endeavour, smartly, is continuing to concentrate on reducing their silver production costs to a target of around $7.00 per ounce.
Although we've only mentioned a couple of companies in this article there are many projects and companies producing and exploring for silver in Mexico that you can view in our database. It seems that with those companies that are producing silver at 2003 spot market prices should survive the economic upheaval that the world is experiencing lately.
For long term investment the right silver stocks look pretty good too!
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Comments
Cost of Production
I've seen in some forums people wondering on the production costs of silver and that it is usually a by-product of other metals mining (zinc & lead). Some people think that the price right now for base metals is hurting a lot of silver miners but it really is dependent on the deposit type. The minefinders project that you mentioned in the article is JUST gold and silver and production costs are well above the break-even point. Process and target minerals are really important things to look at before investing in a mining stock - if you're investing in a silver mine you need to make sure that silver is the driving force behind the mine and not lead or zinc. Minefinders looks pretty good and they have a couple of other projects in the pipeline.