PRIMARY SILVER MINERS: Losing Nearly $3.00 For Every Ounce Of Production

With more than half of the primary silver miners financial results for the third quarter finally out, the group is now losing nearly $3.00 an ounce at the current market price of silver.  We can thank the Fed and Bullion Banks for rigging the paper silver price well below the estimated average break-even for the primary silver miners.

Before I provide my data from the silver miners in my group, I want to discuss the debate on PRECIOUS METALS MANIPULATION.  There seems to be a demarcation now between those who are more traders and the group that adheres to fundamentals.  While I admire anyone who can make a profit paper trading the precious metals, I find it quite interesting how several of the well-known names find it amusing to BASH those in the fundamental BUY & HOLD CAMP.

I look forward to hearing if either Doug Casey or Dan Norcini finally admit that MANIPULATION has and is taking place in the precious metal markets as evidence is now surfacing.  According to the Zerohedge article, A Clear Attempt To Manipulate Fixes In The Precious Metal Market:

Swiss regulator FINMA said on Wednesday that it found a “clear attempt” to manipulate precious metals benchmarks during its investigation into precious metals and foreign exchange trading at UBS.

“The behaviour patterns in precious metals were somewhat similar to the behaviour patterns in foreign exchange,” FINMA director Mark Branson said in a conference call with journalists.

He said that as UBS has precious metals and foreign exchange desks under combined leadership, it was not surprising to find similar behaviour.

“But we have also seen a clear attempt to manipulate fixes in the precious metal markets.”

And then we had this just a few days ago also from ZeroHedge, Another “Conspiracy Theory” Bites The Dust: UBS Settles Over Gold Rigging, Many More Banks To Follow:

Sadly this too conspiracy theory just was crushed into the reality of conspiracy fact, when moments ago the FT reported that alongside admissions of rigging every other market, UBS – always the proverbial first rat in the coalmine, to mix and match metaphors- is about to “settle” allegations of gold and silver rigging. In other words: it admits it had rigged the gold and silver markets, without of course “admitting or denying” it did so.

Even though these banks are starting to provide evidence of precious metals manipulation, the real market rigging is the funneling of American’s funds into the paper retirement market that reached $24 trillion in Q2 2014, according to the Investment Company Institute.

I spoke about this in an interview found here, The Coming Collapse of The Global Paper Ponzi Scheme:

Americans continue to funnel a percentage of their income into the biggest Financial Ponzi Scheme in history. The manipulation of the metals on the exchanges is a very small part of controlling Americans into staying into this system. Because, as you know, a Ponzi System continues to need further income, further inflows, for it to sustain itself. It’s in the best interest for the Fed to keep that system going. That to me is where the majority of this bamboozling or brain-washing is taking place.

So, I highly doubt Mr. Casey or Mr Norcini will admit that MANIPULATION is taking place in the precious metals markets, even though evidence is now coming out.  However, it doesn’t need to be proven.  Why?  Because the peak and decline of unconventional oil production, will destroy the valuations of most paper assets.

When investors realize they are holding onto increasingly worthless paper assets in a falling peak oil environment, they will be forced to move in physical assets such as gold and silver to protect wealth.  If we just had a fraction of the $trillions sitting on the sidelines head into the precious metals or the mining shares, we could see values higher than any imagined.  What would happen to the values if the PUBLIC finally got PRECIOUS METAL RELIGION??

Primary Silver Miners Now Losing Nearly $3.00 For Every Ounce Of Production

If we look at the chart below, 7 of the 12 primary silver miners in my group had an estimated break-even of $18.50 in Q3 2014.  With the current price of silver at $15.70, this would be a net loss of $2.80 an ounce… on average.

7 of 12 Top Primary SIlver Miners Estimated Breakeven

However, we must remember, these seven miners are some of the lower cost producers.  Once we factor in the results for the remaining companies that are the more marginal producers (higher cost), this $2.80 loss per ounce will probably be higher than $3.00.

Furthermore, you will notice that only one primary silver miner is making money at the current price of silver.  This is Tahoe Resources.  Tahoe is an exception because it is mining 5+ million ounces of silver a quarter at a staggering 550+ grams per ton.  There isn’t another primary silver mining company on the planet producing silver in this fashion.  Thus, Tahoe is an exception to the rule and can produce silver at a much lower cost than any company in the group.

As I mentioned above, when the remaining primary silver companies release their Q3 2014 results, I believe the estimated break-even will rise towards $19.00 (higher than the $18.50 preliminary figure from the first seven in the group).

In the next few weeks, I will publish the top 12 primary silver miners Q3 2014 estimated break even report, so please check back for new articles and updates at the SRSrocco Report.  You can also follow us at Twitter, Facebook and Youtube below:

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84 Comments on "PRIMARY SILVER MINERS: Losing Nearly $3.00 For Every Ounce Of Production"

  1. It’s really stunning to see how rotten the system has become. BTW, I was watching Kyle Bass presentation from April of this year, and he said he thought the dollar would be strong for a few years because of the Shale (and his contacts and research point to peak production around 2018) and that it is a better alternative to other currencies.

    It looks to me like gold and silver’s bull run will begin again in a year or so….and start to hit all time highs again in the 2018 to 2020 window.

    Until then, who knows how far the scum sink the metals. The propaganda AGAINST them is as stunning as the manipulation.

    • ” BTW, I was watching Kyle Bass presentation from April of this year, and he said he thought the dollar would be strong for a few years because of the Shale”

      The few years is being reduced because the Comex manipulation on oil has resulted in a lower price to the oil companies…and that will kill shale oil. It must have a high price. to be viable.

      • I wish all would stop with the “manipulation” terminology, already. Can we please refer to it for what it is and stop dancing around the bush. It is fraud through “rigging” or “unlawful rigging” or “fraudulent and unlawful rigging” .
        “Manipulation”, sounds too much like “massage”, a term which linguistly, almost exonerates the practice of theft, perceptionly relegating their crimes to a level of misdemeanor. It also widens the scope for limited sanction,allowing a public slap on the wrist from the so called “regulators”, and gives the “regulators” the excuse to abrogate their responsibilities in fulfilling their charter and duty.

        • sergio – I would suggest, that to call those who occupy positions in the Regulatory Agencies, “regulators” is a cruel misnomer. Since the vast majority of these “chair warmers” are nothing more than enablers. Just as guilty of “fraudulent and unlawful rigging” as the front line financial crooks.

  2. Herman the German | November 12, 2014 at 12:41 pm | Reply

    Have you guys read the analysis about GOFO and its impact on PM by Dr Murell?
    I found it on mineweb
    http://www.mineweb.com/mineweb/content/en/mineweb-editors?oid=259165&sn=Detail

    Would like to hear your thoughts about this!

    • After reading the above article, my first thought was that the next President of US will automatically be the stacker with the most gold.

    • Backwardation and Normal Backwardation.

      Wherein the price of a forward or futures contract is trading below the ‘EXPECTED’ spot price at ‘CONTRACT MATURITY’.

      The academic economic dispute in this area continues without consensus.

  3. typical academia pointyhead to completely ignore THE key sentence in his whole article.
    what does he think has been going on the past 3 years, if not this?

    the chinese get the banks to do their dirty work for them, by imploding the miners & ensuring that when the day comes to back their yuan, the usa can’t bluff them by saying “us, too” because all the miners will be BK & gone= no supply.

    Y do you think they 10 years ago directed ALL domestic china mine output be kept in country, something not even russia has done?

    may as well finish the job–they’re 90% of the way there now!
    i want to see all the pink slips out to every one of these worthless money wasting complicit turds well b4 xmas.
    I hath spoke!
    ————————————————————-

    But since that time the banks have written themselves an escape clause, allowing (among other things) cash settlement upon default – thus reducing the need to chase physical metal to cover paper contracts. Today all they have to do is drop the price and then default on all outstanding contracts, thus escaping and making money at the same time! However the resulting scandal would probably close the market.

  4. Thank you Rocco. I am surprised they even managed to get costs down this far.

  5. why do you mention Doug Casey? Is this the same Doug Casey who owns Casey Research? I don’t think you are refering to the same person, I doubt he would be a paper market maniupulator, especially as his firm advocates physical possession of PM’s. I’d like to know if you are refering to the same person or someone else, and if so, why do you say that about him?

    • chuck,

      I didn’t say Doug was a manipulator… I said he doesn’t believe the precious metals are MANIPULATED. Big difference. Please read the material more clearly.

      steve

      • It may be that Casey mainly believes the government isn’t involved.

        If he truly believes there is no manipulation he is turning a blind eye..and is a big fool…or a shill. It have to be one of those.

      • You didn’t say it directly but it came off that way. Since I’ve been reading your articles I haven’t noticed you mention Casey but maybe that’s just my poor recollection. so if you’ve been in a debate over the manipulation of the market with him, that wasn’t clear to me, which made it come off as maybe he has other motives to deny manipulation. Anyways, thanks for replying and clearing that up. I’m not here to put words in your mouth and I agree with you that the market is manipulated.

      • …..the more I read “chuck”s and alike, the more I feel your pain and what you have to put up with, steve…I do, indeed.
        -My condolences and please do not discourage! I do not think there is any light at the end of this particular tunnel we’re in, but if there is…you are doing a great service to people (including “chuck’ who sadly is 90%+….) and WILL be mentioned as one of the “FEW” who new and did “something” about it…!
        Be well,
        Petro

        P.S.: my offer to help you understand the money, energy, economics, etc. …far beyond Chris Martenson and Mike Malloney – still stands. I mentioned it at Ron Paterson site and I am repeating it here… I have sins to cleanse….

  6. Excellent work, Steve! Your work is crucial for us stackers to get a real look “under the hood” at the mechanisms that “make the metal flow”.

    Things are reaching the point of criticality with regards to the supply of fresh metal. If these guys keep going for broke in the suppression, then the entire industry will be broke as well.

    That’s good news for our warriors, either way! Keep fighting the good fight!
    -WW

  7. I used to read Dan Norcini regularly but lately his blog has become a popular bashing site against anybody affiliated with precious metals. The last straw for me was when he started to call the likes of Eric Sprott and James Turk snake-oil salesmen and worse for misleading people into buying precious metals. I don’t know if he has sold out to the dark side or if he truly is that ignorant about precious metals, but I have lost all respect for him.

    • trader dan will sell his mother for winning dollar trade. period.

    • Not me. I never had any respect for him to begin with. What do we need a worthless technician for who is only interested in $$$ anyway (and probably doesn’t even succeed in that, apart from ripping off his subscribers).

  8. Hi Steve,

    Thanks for compiling this data. Is the “break even” the same as all-in-costs you frequently talk about? I’d love to see an article showing both the cash costs per ounce and all-in-costs. While I agree that all-in is what ultimately matters, both numbers are useful in guestimating how low prices can go and how long they could stay there.

    Keep up the good work.
    -Mike

    • Mike, agreed it would be good to understand the cash cost of the primary miners since the cash cost is what allows them to continue to operate at a loss. As long as miners are cash flow positive regardless of how much they lose on a GAAP basis, they will be able to keep operating at a loss.

      • AK,

        Actually, you are correct… investors need to understand the REAL COST OF MINING SILVER. Cash Costs, are not a real metric to determine the lowest cost or breakeven. That is why I provide the estimated break-even.

        steve

      • Lol AK. How stupid can you be? A loss means a loss. Nobody can continually operate at a loss. You can finance and write off assets, etc, which will buy you some time – but in the end, what happens is that you go out of business because you cannot pay your bills.

  9. So FM press release says they sold the silver they held off the market.

    Looks like they folded. Are all miners complicit in the industry raping? It looks like it.

    http://www.firstmajestic.com/s/NewsReleases.asp?ReportID=683054&_Type=News-Releases&_Title=First-Majestic-Reports-Third-Quarter-Financial-Results

    Long silver!!!

    GUY

  10. Need to be patient, supply and demand will dictate the price, if you have silver or gold you will be one happy stacker. They are getting caught rigging, they won’t be punished accordingly, but stackers will be rewarded. Thanks for the report.

  11. I seem to remember you reporting a break-even in the mid-20s some time ago. Why did it drop to $18.50?

    • fschmidt,

      Two reasons:

      1) Tahoe Resources was not apart of the group until the end of 2013 when they started production. They are the cheapest silver producer which brought down the average quite a bit.

      2) The Silver Miners have cut a great deal to lower their break-even. While they have cut costs to try and remain profitable, this is not sustainable over the longer run.

      steve

      • It may also be energy costs decline.

        • RD,

          Correct. That actually should have been the third factor. However, I don’t believe much in the way of lower costs have made their way yet into the industry. If the oil price remains this low, it will impact costs in 2015.

          But remember, the COST of mining silver is not its true value. It’s true value is as a STORE OF WEALTH, which I believe to be far superior to most paper assets including the $24 trillion U.S. Retirement Paper Ponzi Scheme.

          So, when the value of paper assets begin to implode due to a peak and decline of oil production, then we will see the REAL VALUE of gold and silver… which of course will be a great deal higher than where they are presently.

          steve

          • I do not know the US retirement system but if they have huge T bonds and stocks holdings, they indeed may have problems in the next decade or so.

  12. I don’t think they will stop rigging the PMs in spite of the current discoveries and allegations by some regulators. The main manipulators haven’t been accused and most probably won’t ever be. As long as the miners deliver their Gold and Silver into the market, there won’t be a change and i don’t think that it is enough if just one ore two miners are temporarily holding back a part of their silver production. We still have the absurd situation that the supply is rising despite of the price being at or below mining cost.
    Only if the herd would make a move into PM there is hope to break the downward trend but as long as the stock market is making new high’s there’s no reason for the herd to move into PMs.

    • ” We still have the absurd situation that the supply is rising despite of the price being at or below mining cost.”

      While the supply has risen [we will have to see if 2014 rises or falls], purchasing by industry and investors has over-stripped supply produced for years.

      Recycled silver has been essential in meeting needs mining can’t meet.

  13. That’s true Max.

    The output is too high.Remember 70% silver come from the basic miners.
    So even when some primär miner broke there would be enough material.

    For Gold it Looks a little bit different.Here we have not seen big exploration areas with high grade mining.
    Maybe Gold is the better pick in the moment.Normally when Gold rises, silver makes a double increase.
    The same in the other direction.

    When the Price from the Basic metals falling more and more and the miners maybe cut supply and the whole thing looks different.But for my knowledge the stop of a mine is a very expensive thing and most be avoided under all conditions.
    My motivitation=the truth!

    Greetings from Germany(freaky) My direction=

  14. Looking at the 2014 production figures on this right of this page, about 9.5 ounces of silver have been produced for every one ounce of gold. Gold is gold; highly sought after by WISE fiat-wealthy individuals, central banks, kings, and sovereign nations. It is the “gold standard” for money or backing currency rather than more rare platinum or palladium.

    However gold has few industrial uses; silver has thousands.

    TPTB have apparently determined they can’t hold together the fiat system without manipulative hammering of the prices of gold and in particular silver. This will result in physical shortages period. Anyone who thinks otherwise is blind to facts and logic, or is just plain stupid.

    TPTB are precipitating these coming shortages just to currently hold up the system. Profound coming shortages of gold and silver will be the thing [can] they can no longer kick down the road. This could happen before big investor [or a lot more small ones] money comes into buy silver.

    Unless the price of silver is allowed to rise AND STAY in the mid 20’s or above, the set-up for a gold/silver ratio more like 20 to 1 is coming. That would make sense considering less than 10 ounces of silver is mined for each ounce of gold, and the thousands of industrial uses of silver.

    We can’t stop antibiotic resistant or immune pathogens in hospitals without silver solutions. We can’t build computers and other electronics without silver. Many things we depend on, depend on the availability of silver.

    • It is a multi years problem approach. For now we are maybe just before a new leg of devastation with gold 1000 and silver 12 and maybe even lower.

      • Silver will not drop to $12, not even on the Crimex.

        • I wish you will be right but paper longs are out and so just remains shorts.

          And up to now physical has not (yet ?) diverged from paper so we have a problem in my opinion.

          • RD,

            I see how your comments continue to paint a NEGATIVE view of the precious metals… probably in the short-term. I don’t think anyone in the precious metal community would have ever thought silver would hit $15 after suffering a 105 million oz deficit in 2013. However, this is the way of the world.

            I speak with some very connected people in the industry, and there is a DEMARCATION now in the precious metals camp. Oh, a perfect example is Dan Norcini. Turd at TFmetalsReport helped Dan set up his website, and Dan used to be on Jim Sinclair’s and King World News… no longer.

            Dan now enjoys berating the buy and hold physical gold and silver investors and seems to relish when his hardcore followers do the same on his site. Of course this is a free world, and Dan can do as he pleases, but I will tell you… Jim Sinclair takes the higher ground compared to Dan, in my opinion even though his short-term calls on the paper price of gold have been incorrect.

            This is more than just manipulation of the precious metals (as well as the majority of the market) by the Fed and Central Banks. This is the fight between GOOD & EVIL. That may sound lame, but it’s really that simple.

            I don’t care if I did not participate in the GREAT STOCK AND BOND INFLATION since 2011 while the precious metals tanked. It’s tainted profits that the majority went to the Bankers and Elite. Unfortunately, the shortsighted investors who follow the Financial Sense new business model of GOING ALONG WITH THE INSANITY will never be able to enjoy their so-called gains when the markets finally implode.

            So, you are more than welcome to continue REGURGITATING that the paper price of metals can go lower, but in all reality RD, I could care less what happens in the short term.

            steve

          • Steve,

            I enjoyed your comments and agree on 99% especially with bad characters here (but how could it be when people are living with trading paper which is a zero sum game).
            I do not want to be in stocks or rotten bonds and do not care to miss these paper gains but there is a level where gold and silver are a problem for me and I fear that trend followers and computers continue this massacre for a while at much lower levels.

            Best regards.

          • Don’t know what you mean by “paper longs are out”.

            The big change is JPM [and a few smaller commercial players] have gone net long after being historically short. For every short contract there has to be a long. Short term fiat dollar losses mean nothing to JPM [by letting the shorts off the hook]. Not when they can swoop in and buy out the mint of physical ASE’s at bargain prices while the price is down.

            At any time they can crush the shorts and make a ton. But they won’t go too far with that…biting the hand the hand that feeds them [the CFTC and Fed and Treasury that allow them to make huge profits while suppressing silver and making the dollar & dollar-denominated assets look better].

  15. “There does seem to be a budding reaction building among the leaders of the primary silver miners to the COMEX action of depressing silver prices, namely a recognition that the continued existence of their enterprises is threatened. This has long been recognized by the shareholders of mining stocks and is reflected in the prices of the shares. An intelligent reaction by the primary silver miners to the artificial price-setting on the COMEX could have a profound influence in hastening the coming resolution and in ending the continuing silver price suppression. But what’s the most intelligent reaction by the primary silver miners at this time?

    “While understandable, withholding production alone is not the best way of fighting back, simply because the extremely low price of silver is not caused by overproduction, but by COMEX dealings. And forget about any illegal cartel of silver miners. As I’ve suggested previously, the best thing for the primary silver miners to do, either individually or collectively, is to openly petition the regulators to address the price manipulation on the COMEX. But wait a minute – didn’t I just say that there would never be a regulatory resolution? Yes, I most certainly did and I still believe that to be true. Please hear me out.

    “The primary silver miners (the byproduct producers aren’t necessarily excluded either) have to go the regulators, even if the regulators will do nothing, because it’s the right thing to do. In fact it’s the only practical approach the miners can take. Petitioning the regulators is the only legitimate action the miners can take (although I am always open to other suggestions). Forget low-cost, my approach is no cost to the miners. Further, shareholders would applaud any mining leader who took this approach.

    “Most importantly, the miners have a responsibility to adopt such an approach for the simple reason that they have the most legitimate reason for complaining about the COMEX price setting. It is this legitimacy that makes the silver miners the perfect candidates to petition the regulators. Miners are not speculators or market analysts desirous of higher prices; they have a legal right to expect the level playing field of a non-manipulated price. Producers of every product hold important protections against dumping and artificial price restraints.

    “But why should the miners petition the regulators if the regulators will do nothing? Because of the message that will send to the rest of the world. Try to imagine the potential reaction in the investment world to news that a silver miner or group of miners asked the regulators to investigate evidence of manipulation? It is one thing for an Internet analyst (me) to make such allegations, but quite another for a legitimate producer to do the same. It’s all about legitimacy. It is well-known that in establishment media circles the allegations of a silver (and gold) manipulation is populated by conspiracy types and that’s a big reason the scam has lasted so long. But if a silver miner or miners the allegation, it just might prompt some of the establishment types to actually look at the evidence, something none have done to this point.

    “The only thing a silver miner must be careful about in adopting an approach of openly petitioning the regulators to address the goings on in COMEX dealings is to stick to the facts and don’t say anything wrong. Unfortunately, there are an incredible amount of misstatements of fact regarding the COMEX’s role in setting silver prices that a miner repeating them will reduce any petition to a fool’s errand. Ego aside, I don’t think I’ve ever made an error when petitioning the regulators and it is this careful approach that has made me immune from a counter reaction in calling JPMorgan and the CME market criminals. Of course, I would assist any miner desiring to petition the regulators. – Silver analyst Ted Butler: 12 November 2014

    • Ted Butler— “It is well-known that in establishment media circles the allegations of a silver (and gold) manipulation is populated by conspiracy types and that’s a big reason the scam has lasted so long.”

      Ted has always been a fiat money guy. People alleging—and providing evidence—that the silver price depression is due to a conspiracy—are causing the scam to continue? Huh? Ted thinks no one has colluded to hold silver low? Silver has been under a multi-generational attack and Ted thinks it just keeps happening by chance. Time for leaders of the community to issue a statement deploring Ted having the mind of a child—or is he a cover up artist after all? I have exchanged messages with Ted and spoken to him by phone long ago. This is all too much that it’s all by chance or carelessness that silver prices are in the bottom of the toilet.

      • Excuse me as not a native english so I am not sure to understand irony or other things in english. What do you mean excatly ?

        I think that Ted Butler has always misread the nature of silver as a monetary assets and that his analysis is flawed.

        • The big thing he does not grasp is the reason for depressing silver is to make the Federal Reserve “dollar” look better. The more dollars it takes to buy an ounce of silver, the more it points out a weak monetary unit on the part of the dollar—a totally synthetic monetary unit.

  16. Steve, just to let you know: ODI just published a report on exploration subsidies in G-20 countries:
    http://www.odi.org/g20-fossil-fuel-subsidies
    US subsidies are said to be 5,1 bn dollars last year. Does not sond very much to me.
    Also they throw together subsidies/tax breaks) and (parts of) CAPEX of NOCs. This is my take on it:
    http://staatsstreich.at/oil-gas-subsidies-in-g-20-comparing-apples-to-oranges.html
    What do you think ? Cheers Andreas

  17. So, what would be the cash costs for these primary miners ? When in survival mode they could be able to maintain operation for quite a long time – even at a GAAP loss.
    Any indications for a significant curtailement/shutting down of production? I have a hard time to think of “manipulators” risking a shortage in physical silver….

    • Andreas,

      First… would you mind rephrasing the question about Oil Subsidies. Are you asking me what I think about how this will impact the oil industry in the future?

      Second… we need to take the term CASH COST and throw it out the window. GFMS and the CPM GROUP stated that the primary silver mining industry had a Cash Cost of $9.50-$10 an ounce in 2013. Miners are bleeding at $19, how would it be at $10??

      You must remember, CASH COSTS deduct by-product credits. But these are not credits if the miner states a loss for the quarter. A CREDIT is something a company DOES NOT NEED not to be profitable. If the by-product credits could be removed and the mining company still make money… then yes ITS A CREDIT.

      However, if it’s not (95% of the industry), then it’s insane to deduct by-product REVENUE (not credit) from ones cost. For example here are the by-product revenue figures (including gold revenue from some primary gold mines owned by the silver companies):


      TOP 12 PRIMARY SILVER MINERS TOTAL GROUP FIGURES

      Q3 2012 Total Revenue = $924 million
      Q3 2012 By-Product Revenue = $261 million
      Q3 2012 By-Product Percentage = 28%

      Q2 2014 Total Revenue = $884 million
      Q2 2014 By-Product Revenue = $377 million
      Q2 2014 By-Product Percentage = 47%

      Now, why ON EARTH would a company DEDUCT 47% of its revenue to get a CASH COST metric figure if it needs that revenue to BE PROFITABLE?????????

      Do you see the question marks? CASH COST accounting is the most insane metric that does nothing to provide the profitability of a mining company. This is why I came up with my estimated BREAK EVEN.

      steve

      • Steve, ad oil exploration subsidies.
        I think the shale bonanza is of a strategic, enormous importance for the USG. Washington would be stupid to let low crude prices impair your LTO boom. Like many others I think that USG and their buddies in NYC and the gulf hatched out the fall in oil prices anyway. They want to do harm to the Russkis, but not to the US shale industry (not even the Saudis want this).
        So they have to figure out ways to help the drillers on the edge. Is there a better way to do this than by subsidies/new tax regulations ?
        ODI writes: “However, it is the US oil and gas boom at the heart of President Obama’s ‘All of the Above’ energy strategy that is the driving force behind this growth in exploration subsidies.” But maybe it’s the other way round. Apart from what you wrote here:
        https://srsroccoreport.com/condition-red-fracking-is-destroying-oil-gas-companies-balance-sheets/condition-red-fracking-is-destroying-oil-gas-companies-balance-sheets/
        Is there an overview to crude oil subsidies ???
        5 bn in a 600 bn industry does not seem all that much. Cheers A.

        this:

      • Steve, I THINK I understand what you mean. Thanks again.
        I would say now: Cash costs are just a way of representing the costs, a metric, but they are not for real. The losses in the end of the quarter are for real, yes….and no in a sense as long as they lack consequences. As long as the miners have enough cash to spend, they can keep running.
        And when it’s no longer bearable for the bank or the suppliers or the taxman, the company can run into the arms of a stronger one, which has the strength to support the loss. So the real million dollar question is: (When) do the mines stop producing ? It does not matter very much, whether a mine is run by company X or company Y.

        According to economics 101 they would stop producing until a scarcity of metal drives uo the price. So much for the theory. 😉

  18. Do yout thought about what happens when the silver ETF’s load up?

    “rien ne va plus”.

    • Nothing, they just buy a few futures !

      GLD is down and gold is down, SLV is up and silver is down big time so what can we conclude ?

  19. Steve, thanks a lot indeed. I have to think this through, line by line. “I’ll be back” 🙂

  20. Lets face it, no silver miner is going to shut down even at this price. So far their majority reaction is to increase production!!! Withholding production didn’t work either. Our only hope now is DEPLETION.

    I have not heard this concept discussed for many years, but it used to be a significant issue. Even silver mines deplete, especially at the rate they are producing.

    • Depletion of some mines [lower ore grades]; net effect is in time protracted supply deficits. That breaks the manipulation. Either Westerners start to run from a stock market “correction” to silver, or the Asians deplete supplies, or both. Something breaks the manipulation eventually with sub $25 silver.

  21. Ready for a Big Birthday BASH celebration?
    u should be!

    Tomorrow NOV 14/14 is the 100th anniversary of the 1st real day of “operations” of the FED.
    And what an operation it’s been, complete with psy-ops side operations.

    recall then the US was not yet in WW I, not till early 1917, BUT the banksters used the NYSE closing of late july- mid-dec 2014 (which they arranged to close of course, under the very excuse of ‘it’s the war!’,) as a cover to introduce their new improved paper.

    it took them this long back then to get things printed, like the new FRN FED Bank notes to replace the UST ones, etc., & is the first day they started putting into circulation those usurper notes, while then starting slowly to withdraw the Tdollars till they were 100% gone.

    so, guess what will be the BASH in birthday bash?

  22. Steve, great article! Many of the primary silver producers are located in economies that are suffering and whose currencies are being devalued by the day. Not to mention that looming large layoffs and capital investments depletion will cause further economic deterioration. Will Mexico relax it’s royalty tax even though sliding revenues means sliding tax revenue for them? Probably not ! The solution to this matter is substantially higher silver prices with a minimum to $20./oz to reverse the sliding economic malaise.

    We keep hearing daily the massive demand increase for silver yet price depression/supression continues unabated. Something has to give and your article is a good indication that suppliers /producers of silver are the second victims after the first, investors /shareholders have taken the initial hit .

    Meanwhile the price setters on the Comex are laughing all the way to the bank stuffing their coffers.

    Steve, one question for you. Do you know where the Chinese silver inventories stand at present? Will you be doing an update article on this subject matter? Thanks and keep the great work!

    Paul

  23. “Meanwhile the price setters on the Comex are laughing all the way to the bank stuffing their coffers.”

    Amazing isn’t it. i think the unspoken trust is that so long as they make their money on the downside it’s a-okay with the Govt. However, they are likely not allowed to stuff their coffers to the upside.

    There is not a trade in the world that isn’t or doesn’t have govt. agenda, and Fed agenda, on the other side of it.

    Good luck all. We ARE ALL going to need it.

  24. I am just sitting on all my metals, silver, copper zinc and nickel for 30 years. What I am seeing with the pricing right now is nonsense. I have plenty of time for JP Morgan to settle all of their naked shorts. I have time for silver to be a lot more scarce than it already is. I have time for copper ore to come out of the ground more diluted than ever. And on and on. I might get some gold but knowing I could buy so much silver instead is what is holding me back on gold.

  25. All mining companies should stockpile as much of production as they can, until prices rise. And find suppliers who are willing to take metals as payment in a barter type transaction. In the meantime, lawsuits should be filed against the manipulators. Hopefully, it won’t turn into a shooting war, or a situation where hit men are hired to take out the Bankster gangsters and their trading armies. Now, that would be terrible, terrible, terrible !!! But isn’t that what usually happens in an economic war ? And, this does seem to be just that.

  26. I have just listened to the CEO of Silver Wheaton, and Randy Smallwood says his company’s costs are $4.50 per oz. Is this true? Could you explain how this company can produce their product at such a price when all the others are 4-5 times more expensive. I have a manufacturing business background and this price difference does not seem plausible. You would have to employ child labour in China !

    • Brian,

      Silver Wheaton is not a mining company, the are a SILVER STREAMING company. They provide mining companies with capital and in return they get to purchase a percentage of their silver production at $4-$5 an ounce.

      That is the reason why it cost them only $4.50 an ounce.

      steve

  27. Thanks Steve for your quick reply. I am an Aussie and unfamiliar with this company. Your information is very valuable and I use it many times in my seminars on silver and gold. I buy the physical and always will.

  28. Hi Steve,

    In one of your comments above, you stated that “this is a fight between good and evil.” I love your website and read it often, but I have to take issue with the view that hard-money stackers are somehow in the camp of the good and that big banks and the government are in the camp of the evil. This is a very simplistic, and in my view, incorrect view.

    Tahoe Resources is an example of why I think that. When we buy silver bullion, we are indirectly supporting that company. Many here also buy stock in that company, a form of direct support. Tahoe is currently involved in a very serious murder investigation in Guatemala, due to the treatment of indigenous opponents to its mining activity, which, like just about all mining activity, is very bad for the local environment and only has a short-term effect on the economy.

    In 15 or 20 years, when most of the silver is gone, Tahoe will pack up and move on, and the local people will be dealing with the economic consequences of destroyed habitat (wild plants and game), polluted fresh water, other types of heavy metals pollution, and other negative impacts.

    So, some of the indigenous people in Guatemala decided to peacefully oppose Tahoe’s operations and 7 were shot. In a separate incident, at least one man was murdered. Several links are below.

    I realize that most or all gold and silver mining companies operating in developing nations are very likely violating environmental laws and paying bribes. Some are probably also suppressing unions, at times violently. But Tahoe seems to be taking things to another level, as it is implicated in two different violent crimes.

    If this struggle is about good and evil – and I wouldn’t describe it that way – then don’t be too quick to claim that PM stackers and those buying PM mining shares are on the side of good.
    Cheers,
    Hugh
    http://www.lapoliticaeslapolitica.com/2013/03/tensions-rise-after-murder-of.html

    http://en.wikipedia.org/wiki/Tahoe_Resources#Alleged_Role_in_Violence_Related_to_Escobal_Mine

    http://www.vancouversun.com/business/Vancouver+based+Tahoe+Resources+faces+lawsuit+over+violence+Guatemala+mine/9952456/story.html

    http://www.globalresearch.ca/guatemalans-suing-canadian-mining-company-tahoe-resources-for-violence-and-repression/5387569

    http://www.mineweb.com/mineweb/content/en/mineweb-junior-mining?oid=188457&sn=Detail

    • HughK,

      I actually agree with you in many ways. I know all about Tahoe Resources. While I include them in my top 12 because they are a leading primary silver miner, their silver production is tainted with BLOOD. Yes, there have been shootings on both sides of the fence. However, the mining company holds the blame.

      When I say GOOD & EVIL, I mean between the Bankers who control the monetary system that siphons the wealth from the many and into the few. Of course there is garbage on both sides of this battle.

      The mining of gold is actually a very dirty and destructive business that leaves a mess behind. But, it is a much less mess than the destruction of wealth in the world due to the Bankers and the West being in control of the Fiat Monetary System. Thus, the looting of Natural Resources while leaving the local citizens poor is a typical example of this at work.

      Gold and Silver place the voting rights in the hands of the masses, while Fiat Money is controlled by the Central and Commercial Banks. They get to say how capital is spent and who gets it. Whereas according to the expert on Gold and the Real Bills Doctrine, Antal Fekete.. the public has this power when gold and silver are money.

      This is the battle of GOOD and EVIL I was trying to get across, not the individual entities that are good or bad on either side of this fight.

      steve

      I know all about the situation over there in Guatemala.

  29. As long as you have morons, err I mean sellers that are more than willing to SELL PHYSICAL AT THE PAPER PRICE then you will have manipulation. Blatant, IN YOUR FACE MANIPULATION… yet from large corporate bullion dealers to small & large internet dealers/sellers to small Mom & Pop coin shops people continue to sell physical based on the Comex paper price. The dealers and sellers are screwing themselves and until these people wise up and realize THEY are the ones that are letting themselves be manipulated by the bankers nothing will ever change! Its almost laughable its so simple BUT knowing how stupid people really are do you think they will ever learn? The answer is a resounding HELL NO – because people can’t think for themselves. The irony is that the manipulation could be stopped by the same people crying about the manipulation. QUIT ENABLING THE BANKERS BY SELLING YOUR PHYSICAL AT THE PAPER PRICE. Anyone or any entity that sells physical at the paper price has absolutely no right to bitch about manipulation. PERIOD.

  30. Steve, the manipulation of markets, to defend what Traderdan is saying, he emits there is manipulation but it is not all the time. I have been using the Yen carry trade for my analogy. Large spec funds borrow Yen at very low interest rates. They then sell these Yen to invest in another currencies better yielding products ie. stocks bonds commodities, etc. This all works as long as the Yen is falling or remaining stable in price with the other currency. If the Yen appreciates those carry trades will be unwound. The BOJ has been giving the green light to the carry players who are short Yen to help the bank efforts to drive down the price of Yen.
    A similar type of game is being played in gold. Central banks lease out their gold at very low interest rates to bullion banks. They sell the gold and buy higher yield instruments just like the Yen carry gold must be in a bear market for this to work. So IMO the manipulation by the banks has been to maintain the bear market in gold by defending upper resistance. The hedge fund see this clearly so they are playing gold from the short side knowing the banks will defend their carry in gold. This is why it important to see what the miners(supply side) are doing. Your work is indicating a future supply crunch as miners go into survival mode. How long this will take to play out is unknown but the longer the price stay here the more damage it will do to future supply. Let me know what you think on this.

    • Jskauai,

      I totally understand what you are driving at. However, I do believe the precious metals as well as most of the market is manipulated all the time. Before, it was less… but the precious metals and commodities received the lion’s share.

      Let me see if I can explain it this way. As I stated in another comment… the Fiat Monetary System is in control by the Central and Commercial Banks. They are in control of how capital is spent and who gets it. Whereas in a real gold and silver monetary system based on the Real Bills Doctrine, the masses have this voting right.

      The printing and increase of debt to the staggering levels have given FINANCIAL ASSETS an inflated value, while the precious metals and commodities get treated like JUST IN TIME worthless garbage…. only good for supply and demand purposes.

      You must understand the $18 trillion in U.S. Debt plus all the other unfunded liabilities are the other side of the $24 trillion U.S. Retirement market. Without the Debt, there would be no retirement market.

      Do you understand??? And, as I have stated numerous times, DIGITS in a bank account are not wealth, but promises of wealth in the future based on BURNING ENERGY. And not just burning energy, but burning MORE ENERGY than the year before. This highly leveraged debt-based system needs an increasing global energy supply to function.

      Conventional Oil peaked in 2005. Do you think it’s just a mere coincidence that the collapse in 2008-2009 and the huge Monetary Printing Schemes by the Fed and Central Banks took place right after the world peaked in conventional oil production??

      Trader Dan does not see the ENERGY-MONEY-WEALTH connection. The debts in the world cannot be repaid because we don’t have the energy to do so. So, if all debts were extinguished… then MOST PAPER ASSETS based on this debt would vaporize as well.

      Where would you want to be invested when this realization takes place????

      This is why the manipulation has been taking place on an ON GOING BASIS for decades. Wealth of the world has been siphoned into a Paper Ponzi Scheme that will implode. If a fraction of the ANNUAL FLOW OF FUNDS went into real hard assets such as gold and silver rather than the Paper Ponzi System… you would see just how wrong DAN NORCINI truly is.

      It’s the brainwashing of the public to continue to invest a monthly income stream into this Huge Paper Ponzi scheme that is the REAL MANIPULATION.

      steve

      • I like this analysis except about your conventionnal energy peak which is true but in my opinion which is far away of a serial issue for paper money managers at central banks and a trading opportunity for commercial banks.

        There are surely more concerned by gold (and maybe silver).

        • RD,

          That’s a little sideshow. The real manipulation is getting the WEALTH of the world into the 0.1%.

          GOT IT??

          steve

          • 100% agree that the problem is fiat and their ussr monetary planning !

            Where we are not agree is that the scam must unwound BECAUSE of peak oil in the next few years.

          • RD,

            I never said it would fall apart in the next few years… however, I believe it will start to UNRAVEL in the next few years due to PEAK OIL.

            steve

          • Got it !

            I agree with you that in case peak oil would really materialize, it will lead to unravel the fiat scam but there is two other possibilities imo :

            1) BRICS launch a new alternative system
            2) A new debt crisis happen and central banks this time does not succeed to reinflate and restore confidence in the paper ponzi.

            I do not know whether the above scenario have high probabilities especially wihin the next few years.

          • RD,

            Yes, the BRICS can put forth a new Gold-Backed monetary system, but this does nothing to solve the $100 trillion in Global Debts and the Quadrillion in Derivatives. Sure, a BLACK SWAN could take the system down at any time… totally agree. But PEAK OIL will be the death of a way of life… FOREVER.

            Big difference.

            steve

          • If BRICS launches something gold related, I think that most of the old debt and some paper assets will just be like some subprime assets between 0 and 1/10 of their original face value.

  31. One thing you have to give them credit for,is the fact they are so arrogant about the fact they cannot get in trouble for what they do,that they even decided to call it what it is The “Silver FIX”!! One thing I do know is that they can manipulate all they want but when it comes time to fill short orders with real physical that they do not have or cannot get is when we who hold phyisical will finally see victory.

    I feel sorry for all those who tryed to hold with short hands only to take a brutal beatdown which if you ask me should be able to SUE the FIXERS for their CORRUPTION!

  32. I tend to discount ALL articles that don’t list the authors name as unreliable at best and blatently false at worst. This may or may not be true for this article. some data contained therein can be substantiated from other reliable sources but I would like to recommend that in the future the author (or authors) be listed directly under the title.

    • American Patriot,

      I understand. So let me try and clear this up. ALL THE ARTICLES on my site are written by me, Steve St. Angelo aka SRSrocco unless I publish a guest post and then I will put in their name.

      Does this suffice?

      steve

    • Hahaha, you should also discount lots of financial times as an example or impression are often used to put up a theory or general fact/rule especially with gold stories.

  33. Choctaw Warrior | November 19, 2014 at 9:20 pm | Reply

    THE MINERS ARE NOT LOSING ANY MONEY. i STARTED BUYING SILVER AT $ 3.00 SPOT PRICE. I could buy all the silver that i wanted for $ 3.50 to $ 4.00 per oz. It has not been that long since it was at $ 3.00 spot. Silver is a by product of mining for Gold and other metals. When they mine for Gold–Copper –Lead –Platinum –ect the silver comes with those.
    Silver is being used up really fast and it is and will continue to be a rarer metal than Gold. I believe silver should sell for more than Gold right now but when silver goes up in price it will destroy the Fiat Currencies. What a blessing that will be.

  34. Choctaw Warrior | November 19, 2014 at 9:37 pm | Reply

    I buy Silver every month and will continue to do so regardless of the sell price. A few days ago i bought some silver and by the time i received it I lost about $ 200.00 due to falling prices. I really do not care about that because I am in for the long haul. My silver is not for sale at any price.
    I have grown kids and grandkids and great grandkids i want to leave some money to so I am in no hurry to sell. The only thing i dislike right now is keeping it in safety deposit boxes . Kind of scary.

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