Canadian silver production declined significantly in the first two months of 2014 compared to last year. The huge drop off in production was due to the closure of two base metal mines and one primary silver mine in 2013.
Silver production in Canada declined from 119.5 metric tons (3.84 million oz) in January and February 2013, to 70 metric tons (2.25 million oz) in the first two months of 2014.
Here we can see that overall production declined nearly 50 metric tons or 41% y.o.y. (year over year). The fall in silver production came from the closure of Glencore Xstrata’s Brunswick and Perseverance zinc mines in Eastern Canada which produced 350,000 metric tons of zinc in 2011.
Furthermore, Canada’s highest grade silver project, Alexco Resources Bellekeno mine, was put on care and maintenance in fourth quarter of 2013 hoping for higher prices in 2014. Alexco’s break even for its Bellekeno mine was in the $28-29 range last year… according to my estimates.
Alexco Resources took a beating last year when the price of silver fell from an average of $31.14 in 2012 to $23.97 in 2013. Alexco’s revenues declined from $76.7 million in 2012 to $43.1 million in 2013. They went from an adjusted net income gain of $3.4 million in 2012 to a loss of $4.3 million.
When Alexco was running out full production, it produced 2.1 million oz of silver in 2012 at a stunning yield of 22.7 ounces per ton.
Canada’s silver production peaked in 2002 at 44.1 million ounces and is estimated to fall to 15 million ounces in 2014:
The global base mining company Vale, is bringing online its new Totten nickel & copper project this year. Along with its base metal production of nickel and copper it will have by-products of PGE’s (platinum & palladium) and gold. Even though there may be some silver production, it will be very little.
Here we can see that Canada lost two-thirds of its silver production in just twelve years. While Canada isn’t a large global silver producer, it’s still a large percentage decline nonetheless.
Lastly, as the Royal Canadian Mint continues to ramp up sales of its Silver Maples, the country will have to import more silver to make up for the shortfall in domestic production.
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