Record Silver Eagle Buying As Industry Analysts Mislead The Public

The U.S. Mint sold more Silver Eagles in the past two months than it has ever in the same time-period in previous years.  February and March sales were so strong, they surpassed 2013’s by nearly 2.4 million.

According to the U.S. Mint’s most recent update, sales of Silver Eagles in March hit a record 5,354,000, which was almost 2 million higher than in March of 2013.

Silver Eagle Update April 1 2014

The U.S. Mint didn’t update their figures yesterday (last day of the month) so I thought they were going to dump these sales in April.  As of Friday, total sales for March were 4,476,000.  However they updated the figures today showing that another 878,000 Silver Eagles were sold on Monday bringing the total for March to 5,354,000.

If we look at the chart below, we can see how much heavier the buying was this FEB-MAR compared to previous years:

Total Eagle Sales FEB MAR 2010  to 2014

2014 FEB-MAR sales were more than double than 2012, and 35% higher than 2013.  Even though sales for the first three months of 2014 at 13,879,000 are lower than 2013 at 14,223,000, this was due to the U.S. Mint restricting sales in January.

I spoke with the management at APMEX today on the subject of Silver Eagle Sales.  APMEX is one of the largest online precious metal dealers on the Internet.  I asked if they knew if Hedge Funds were buying a good percentage of these Silver Eagles (heard from another source in the industry).

He told me that they tried to sell to the hedge fund market years ago, but found that hedge funds rather purchase large silver bars at the lowest spot price.  Even though there might be some Hedge Fund buying he believes the American public and foreigners are purchasing the majority of Silver Eagles.

Industry Analysts Mislead The Public On Silver Mining Costs

Fitting for APRIL FOOLS DAY, Natixis came out with their forecast for silver in 2014 & 2015.  According to the article in Mineweb: $10/oz Silver In 2015 Among Natixis Scenarios:

Natixis analysts Nic Brown and Bernard Dahdah argue the downside to the price of silver is much worse than gold’s given the potential for a sell off in investment silver and the fact silver’s average cash costs are still quite a bit lower – $7 an ounce in Natixis’ estimation – than recent silver prices.

…Indeed they write: “At 19,700 tonnes, the amount of silver held in physically backed ETPs (exchange traded products) is equivalent to almost 80% of 2012’s mined output. If last year’s mass exit from gold ETPs was followed this year by sales from silver ETPs, this could rapidly turn into a substantial new source of supply just as happened with gold last year. Under these scenarios we could see silver prices fall to an average of $15/oz in 2014 and $10/oz in 2015.”

So, if we have a mass liquidation of the Silver ETF’s as experienced by the Gold ETF’s in 2013, Natixis believes we could see $10 silver next year.  It would seem highly unlikely that Global Silver ETF’s would liquidate their inventories unless the world ran out of gold to buy… which would be very bullish, not bearish for prices.

I don’t believe the folks at Natixis realize that the huge liquidation of Gold ETF’s in 2013 were to acquire physical metal to fill the huge demand coming from China and India.

Anyhow… I want to focus on the part where Natixis discusses the $7 an ounce cash cost for silver.  Let me start off by saying… THERE ARE NO SILVER PRODUCERS THAT CAN AFFORD TO MINE SILVER ANYWHERE NEAR $10 an ounce.

For example, Hecla recorded at $1.5 million adjusted loss for Q4 2013, while stating a CASH COST of $7.33 an ounce, net of by-product credits.  If they lost $1.5 million receiving $20.13 an ounce for their silver in Q4 2013, what kind of losses would they incur if the market price was $7 or $10?

Cash Cost accounting is an insane outdated metric that provides no real clue as to the profitability of a company.  Every mining company states in a footnote below their silly cash cost accounting figures, that CASH COSTS are not a GAAP – Generally Accepted Accounting Principle.

Hecla is a perfect example of why this is true.  Cash Cost accounting deducts the by-product revenue (not credits) from the cost of producing silver.  All it does is lower the cash cost figure…. which offers no indication of profitability.

Does anyone ever ask…. At these low metal prices, can a company be profitable without their by-product revenue?  And the answer is… FOR THE MOST PART…. NO.

I still get emails and responses from readers on my site who believe mining companies understate their real costs and have several books to hide the fact that they are ROLLING IN THE DOUGH.  Folks… that’s simply HOGWASH.

If we look at my top 12 primary silver miners Q1-Q3 2013 results, we can see that they made a PALTRY $1.4 million in adjusted income on $2.3 billion in revenue as a group selling nearly 70 million ounces of silver.  This was at an average realized price of $24.58.  Basically, the group gave away SILVER FOR FREE.

Top 12 Silver Miners Total 2013 Metrics

Because the industry still focuses on the CASH COST metric, investors are still confused as to the real cost of mining silver.  I will be explaining this in more detail in an upcoming FREE REPORT.

Natixis is a Global Financial company in France, which recorded a one Billion Euro profit in 2013 on shuffling paper.  Compare this to a dozen top primary silver miners selling an estimated 95 million ounces of silver during the entire year while stating an adjusted income loss.

Sounds fair… doesn’t it?

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39 Comments on "Record Silver Eagle Buying As Industry Analysts Mislead The Public"

  1. Adolf Hitler | April 1, 2014 at 5:28 pm |

    The problem with this analysis is that it ignores the silver from byproducts. The reason that silver supply increased in the past several years is to a large extent because of the silver supply from mining zinc and lead. Take China for example. China increased her zinc and lead production exponentially. In 2007, China mined 1.3 million tonnes of lead but in 2013 the country mined 3 million. Since silver is often a byproduct of zinc and lead, China’s silver production also increased by around 60%

    Unless China cuts her zinc and lead production, the supply of silver can still increase despite the bankruptcy of the entire silver mining industry.

    • Adolf,

      Bless your heart. I gather you haven’t read any of my comments on this very issue. Unfortunately, I have to run out the door, but Natixis is the one that used the $7 silver, which refers to primary mining. Furthermore, Base metal miners are getting hammered now that prices of metals are down big time.

      KGHM Polska Miedz is the largest Copper by-product silver miner in the world at 40 million oz a year. They made a 5% net income profit to revenue Q4 2013. What do you think that figure will be now that the price of copper is in the toilet?

      As for your last sentence… nice assumption…. however I believe, totally false.


      • Adolf Hitler | April 1, 2014 at 6:08 pm |

        Steve, I was talking about silver from zinc and lead production but you used a copper producer to prove your point. Do you think this is convincing?
        Silver from zinc and lead production accounts for almost 40% of the total supply but that from copper only accounts for 20% according GFMS figures.

        “Base metal miners are getting hammered now that prices of metals are down big time.” The prices for zinc and lead have been almost flat since 2010. How can the Chinese zinc and lead producers be hammered?

        • Adolf,

          Okay… Let’s go over the numbers, shall we?

          2012 Primary silver production = 28%
          2012 Lead & Zinc by-product = 39%
          2012 Copper by-product = 20%
          2012 Gold by-product = 13%

          According to my calculations, break-even from my top 12 primary silver miners as a group, was $24 for 2013. This was approximately 35% of total primary silver mining production.

          If we include by-product silver from Copper (20%) with the primary silver miners (28%), that would be 48% of total mine supply. So in using copper as an example, this puts total silver mine supply from these two sources at roughly half of all production. Copper miners are now struggling to make profits (with the price of copper near $3), then we can assume that every bit of silver revenue is important to fortify their balance sheets.

          Now, let’s discuss the Gold miners by-product silver at 13% of overall production. We all know the gold miners aren’t really making much money at this low price of $1,250-$1,300. Some are making a little, while others are suffering losses. Also, if we look at FREE CASH FLOW, most are negative.

          Which also means, the gold miners need ALL THEIR SILVER REVENUE to fortify their balance sheets. Some companies sell their silver to Silver Wheaton for $4-5 clams an ounce because of CAPEX they received in return to build out their mines.

          Goldcorp was the 4th largest by-product silver producer in 2012 at 30 million oz. Below is Goldcorps FREE CASH FLOW for 2013:

          Q1 = -$239 million
          Q2 = -$502 million
          Q3 = -$267 million
          Q4 = -$30 million

          And this doesn’t even include DIVIDEND payouts which were $486 million. Basically, Goldcorp had to burn through cash to pay for dividends in 2013.

          Goldcorp sells 25% of their silver to Silver Wheaton. However, they also need every bit of that silver revenue to boost their balance sheet. I would imagine the majority of gold producers are in the same boat.

          Which means we can add 13% Gold by-product silver to the 48% to get 61%. Copper & Gold producers are not MINING SILVER FOR FREE… the notion is pure RUBBISH.

          Now… if we look at one of the largest ZINC mines in the world, run by TECK RESOURCES, this came from the Q4 2013 year-end report:

          Red Dog, located in northwest Alaska, is one of the world’s largest zinc mines. Red Dog’s gross profit before depreciation and amortization in 2013 was $418 million, compared with $440 million in 2012 and $547 million in 2011. The lower 2013 gross profit was mainly due to lower byproduct revenue from silver.

          Did anyone read that LAST SENTENCE? Lower gross profit was MAINLY DUE TO LOWER BY-PRODUCT SILVER REVENUE.

          Here is TECK RESOURCES 2013 Free Cash Flow:

          Q1 = +$369 million
          Q2 = -$156 million
          Q3 = +$13 million
          Q4 = +$30 million.

          So, for the year, Teck had $256 million in Free Cash Flow out of $9.3 billion in revenue, and that mostly came from their first quarter when silver and base metal prices where higher.

          Now, I am not saying every Zinc and Lead mine in the world is barely making money, but I would assume a good percentage are in the same financial situation as Teck.

          So, if Teck is having trouble making real money at current base metal and silver prices… then the question remains… ARE THE BASE METAL MINERS PRODUCING SILVER FOR NEXT TO NOTHING??

          HELL NO. Thus, it reinforces the understanding that the Base Metal Miners need every bit of by-product silver revenue they can get, to fortify their balance sheets just as the primary silver miners need every bit of gold-zinc-lead and copper to keep them from losing money.


  2. Steve

    I love your articles, they are full of facts and figures rather than assumptions and characterizations. Nice job.

    I keep watching these markets, and agree that yes it’s a strange market. The more demand for a resource, record demand actually, and the price plummets. I was in the software business for years selling programs on a $1.00 CD for thousands of dollars. Anytime demand picked up I would circle back and RAISE my prices. Around Y2K I was raising prices constantly as demand was overwhelming.

    My point to all this, is we are now selling more ounces of ASE’s than we mine in the USA annually. This means we have to import from someone, somewhere the balance of the silver for ASE’s but also enough silver to supply bars and our own industrial complex. The USA is still a large manufacturing concern and silver is used in many products.

    So the mines know they are bringing silver to market in quantities insufficient to meet demand and yet they bring this metal to market at prices where they lose money. And the mines outside the USA have to include transportation cost in their prices and they too deliver metal into a market unable to satisfy it’s own demand, at prices that are certainly problematic to their bottom line.

    My question then is where is the USA getting all the silver we use? Do you know if we have charts showing where the imports of silver into the USA originate?

    And finally, after several years of this price smash, wouldn’t you think the off take of silver would at least generate a tightness somewhere on the planet? It just seems to me that we have an abundance of silver, anyplace you want to buy it, and yet the facts state that a single product, ASE’s account for virtually all our silver production.

    I just can’t make sense of the math. Either miners are dumping vast quantities of silver on the market or the population is selling every silver ounce they have in their possession to make ends meet. If there is another answer, I’m at a loss to find it.

    Would love to hear your thoughts.

    • Tas,

      Currently there is no shortage of wholesale silver whatsoever. However, that doesn’t change the fact that investors are buying a hell of a lot more Silver Eagles than Gold for some reason. Some believe this is really nothing… a petty thing. I hardly doubt 45 million oz of silver investment from just one source is a PETTY AMOUNT.

      When we add up all the other official mints, including global bar and coin investment… the figure could be close to 175-200 million oz.

      The U.S. Mint no longer has to purchase silver from the U.S. Treasury, as the stockpile was depleted in the 1990’s. The Senate passed a bill making it legal for the U.S. Mint to purchase silver on the open market to mint Silver Eagles. While the blanks are manufactured in the U.S., the silver used to make those blanks can come from anywhere in the world. I would bet a good percentage of Silver Eagle silver comes from Mexico.

      The U.S. imported an estimated 5,000 metric tons of silver in 2013. That’s something like 161 million oz.

      The miners aren’t dumping silver on the market, they are just selling what they produce…. just like almost every other mining company in the world. Mines don’t have the luxury to hold onto much production.

      Investment demand is the key to higher prices, not industrial demand. When the world was suffering a deficit in silver supply prior to 2004, the price remained flat at $4-5. However, when a barrel of oil increased 4 times its price from 2002-2011 and we had a huge increase of silver investment demand… that pushed the price up to new highs.

      Investment demand determines current price, but the loss in faith of the Dollar (when it comes) will push silver to new highs few ever imagined.


      • Steve, I did not say “petty amount” the other day, but 4.5% in a global market of 1 bn ounces is not “a lot”. That aside, great refutation of AH (crickets chirping from him so far), keep it up.

        @Tas, I have come to the conclusion that SLV is the buffer for physical metal for the bullion banks. They can smash the price in the futures/paper market (“hedging” their positions, cough cough), buy SLV/GLD shares and redeem them for physical metal… IMO this is THE main reason for the outflows in these funds, especially GLD in 2013. All frustrated GLD holders and miners that sold with a loss are actually paying for the lower paper price. Steve is spot on, that longterm, these prices where mining the metals at a loss or breaking even overall, is not sustainable vis-a-vis the investor and industrial demand for physical metal. But it will take time to materialize in higher prices, when 99% of all traded Au/Ag is unbacked or only partly physically backed “paper-metal”.

  3. Steve. Many, many thanks for your ongoing GREAT articles and analyses.
    How you indicated before, or could you now, show us the complete list of the TOP 12 Primary Silver Miners??
    And info related to them would be helpful. Gracias,

    • Ken,

      I plan on doing that… but I wanted to put that detailed data in a PAID REPORT. I like to provide as much public information as possible, but would like to put the details in these paid reports for a small modest fee. These single paid reports will help quantify some of my time.


  4. NEW YORK, March 27 (Reuters) – Silver investors failed to show that JPMorgan Chase & Co conspired to drive down the metal’s price, and an antitrust lawsuit accusing the largest U.S. bank of price-fixing should be dismissed, a federal appeals court ruled.

    The 2nd U.S. Circuit Court of Appeals said the investors, who traded COMEX silver futures and options contracts, failed to show that JPMorgan violated federal antitrust and commodities laws by having distorted silver prices at their expense between 2007 and 2010.

  5. Why would we look at the top 12 primary miners when 70% of the worlds silver is mined by indirect (non primary) miners?

  6. One of the Natixis analysts, Mr Bernard DUHDUH, appears to be very aptly named…?

  7. Lingeringmethane | April 1, 2014 at 7:58 pm |

    $10 silver? Yes please! I will stuff it everywhere I can at that price.

    • lastmanstanding | April 2, 2014 at 7:46 am |

      Premiums will be sky high. Buying silver at $20 an oz. is the bargain of this century.

      Don’t expect to purchase it below that…people are scarfing it up now. IMO, the days of BUYING silver below $20 are OVER.

      Fart kitten…If you were a miner, or a dealer, would you be selling it for that? There is NO WAY, based on the demand/info out there (Steve has provided most of it) that based on energy costs and the cost of technologies used to get /refine it that anyone would even consider selling for that.

      Any sane person or corp that is…maybe there is a shitload of silver left…maybe I’m wrong…maybe there is still a lot of cheap energy left…who really knows.

      All I know is that over the last 50/100 years the earth has been treated like shit…raped of her treasures and most of it done for power, profit by a few and control of the masses.

      Brother, the earth doesn’t work that way…an she is pissed. Hold on to your ass.

      • Lingeringmethane | April 2, 2014 at 10:56 am |

        Fart kitten lol
        I’ve been a silver hoarder since my grandpa showed me the light when I was a young lad. I know what real money is. My silver/gold stash has outperformed the DOW, S&P, bonds and of course savings rates.
        I agree if I was a miner I wouldn’t be selling it at that price; however, I will be buying it at that price if there are sellers 🙂 I haven’t sold a single ounce of my stash for 25 years and I don’t plan to anytime soon.
        With that said I still don’t underestimate the power of the FED and others of the same ilk. They will do anything to keep the current system alive. So $10 silver I don’t see it happening but yes it is possible. Desperate people do desparate things and I will be there to capitalize.

  8. You’re a saint Steve. Your patience and objectivity when responding to these ungrates is exemplary.

    I don’t think however that they deserve any of it. They are taking advantage of you, provoking you with BS so they can elicit valuable information from you. I think you should just stop doing so much work in the comment section, and put all of this info in your future paid reports. Let’s stop feeding these trolls for free!

    • Markus,

      I respond not for the sake of the individual… even though it’s a plus. I do it for the sake of the NEW and OLDER READERS. It gives them the opportunity to understand more details as well as clarifying objections.


      • Markus expressed my thoughts too close to bother restating. But I understand your reply. And since I’ve been reading you for years, I tend know what’s coming. It’s as entertaining as it is illuminating.

  9. chinese lead and zinc producers are receiving heavy govt subsidies to stay alive. all of them are losing money before subsidy.

  10. roguefaction | April 2, 2014 at 7:25 am |

    Quite an interesting aggregation of comments///

    When suitably mixed, and just the right dash of piquant objectivity is added to give memorable flavor…

    several pet assumptions of the scariest of the ‘silver squirrelz’ who are hoping to make a nest here will be SHAKEN…STIRRED…and then served back to them …very, very dry!

    First off… I have to at least temporarily sign up with Herr Schickelgruggers’ Panzer Division, as he has opened an awesome enveloping move against the weakened flank of the Legion of Legacy Loons who had hoped that their offensive to drive off all creative and outside the box thinking here would be an easy rollover. How timely to be reminded in this very piece that their major artillery consist of lobbing epitaphs… like “troll”/// “ungrate” /// ‘stoopid’ and so on ad nauseum – all of which fail to ignite much anymore save laughter>>>

    “Adolf” on the other hand… has taken a flamethrower to the frontline… and used it with ‘deadly effect:’
    ““Base metal miners are getting hammered now that prices of metals are down big time.” The prices for zinc and lead have been almost flat since 2010. How can the Chinese zinc and lead producers be hammered?” When you blend in “chinese lead and zinc producers are receiving heavy govt subsidies to stay alive. all of them are losing money before subsidy” from “Judejin”…

    them’s Commanches on that there ridgeline pardner… suggest you get the chillen and womenfolk behind the wagons…then circle em hard!

    But the real warwhoops don’t start here until Steve delivers the right amount of ammunition to get things blazing…

    “The miners aren’t dumping silver on the market, they are just selling what they produce…. just like almost every other mining company in the world. Mines don’t have the luxury to hold onto much production. …Investment demand determines current price, but the loss in faith of the Dollar (when it comes) will push silver to new highs few ever imagined.”

    True enough dat! But there’s a little caveat Steve will not be able to mention…LOCATION LOCATION LOCATION…

    Now we got ourselves a CONFLAGRATION!

    Chinese are doing stuff beyond the wildest imagination of the gormless gold/silverbugs back in Gulagistan who somehow imagine that Lao Tzu’s doctrine applied to modern financial gamesmanship is gonna somehow allow THEM to end up in gravy via holding pms… whilst everybody else goes down for the count.

    Steve’s no saint… that kind of b.s. profile is best left to be cultivated by those who claim to be doin “God’s Work!”… and play a great game of suckup to the rubes whose wallets they be scarfin! Steve’s just a hard workin guy with a site to manage… and therefore has to keep to the limits of what his audience can handle… I got no such strictures! For those very very few who really wish to know what they need to in order to get through the coming storm… knowledge is free… having the guts to look at it is the “only” cost! Way too pricey for most it seems.

    Having learned how things work here… think I’ll take a nap bout now… and wait for the usual screaming and gnashing of fangs from the resident Schlitzies to die down… then come back and see if anybody’s interested yet in a real discussion bout what’s goin down in the world outside o CampFEMA’s coordinates…. or whether we still need to do some more yabberin about ‘silver stealers’ n such, before the curtain can come up on the main event.

    Lemme know when it’s finally time to talk about China and the miners will ya?

  11. lastmanstanding | April 2, 2014 at 8:04 am |

    Who will have enough energy/fuel to continue mining?

    Will they continue to “waste” it on mining?

    Won’t energy eventually only be used to survive?

    I have my own opinion, any others? I guess that I am tired of watching energy destroyed for things beyond survival.

  12. Contrary to one of the main points you raise …. from 1990 to 2005 silver did sell for $5-8/oz !! That means the full cost was below that level. $25/oz cost? No one is going to be operating at that kind of loss for 15 years. Right? Add Inflation from 2005 and you get to a current cost of $7-10/oz. The problem with your analysis is you’re using numbers that are manipulated for a host of reasons. And, apparently, you don’t know what they do or how they do it. I do. Forget about FASB and GAAP. Remember Enron? That bunch of crooks met all of those standards. So did the bankrupt, government bailed out banksters.

    I’ll give you another prime example. Every feature movie produced by every studio in the last 50 years has lost $50 million or more. By their financial reporting, none has ever made a profit. Same with TV series. Yet, each studio cranks out 30-35 feature movies each year. How can they keep doing that? And, have an actual ROI over 30%. Have someone explain it to you and that’ll give you at least some insight into correcting your faulty analysis and conclusions.

    “THERE ARE NO SILVER PRODUCERS THAT CAN AFFORD TO MINE SILVER ANYWHERE NEAR $10, much less $7”. Not to sound nasty, but you need to learn basic grammar. As written, that statement is nonsensical.

    • Mellissa,

      Yes, it’s true… I am a butcher when it comes to writing. I have stated that several times. Thanks for pointing out the obvious.

      However, I believe my grasp on the mining cost structure is better than my writing ability. Let me explain. The reason the cost of silver remained low in the 1990’s to early 2000’s had everything to do with the price of oil. Oil was $25 a barrel in 2002 and is now $100-$110.

      The price of oil fluctuated between $16-$23 a barrel from 1990-1999 which you can plainly see in the graph above. Which is why the cost of silver was in the $4-5 range. Furthermore, Hecla & Coeur suffered losses several years in that 1990-2002 time period.

      If we look at the price of gold and silver, both quadrupled since 2002. The rise in the price of energy had EVERYTHING to do with it.

      The price of energy thunders through the economy. Some have stated that labor wages are low in Mexico and South America where most of the silver is mined. However, rising energy prices forces companies to pay more for everything. And then we have the problem with the U.S. exporting inflation which kills the value of local currencies.

      How do you get $7-10 cost an ounce inflation when the price of oil has quadrupled? Sorry, I have no clue about the movie or film industry. But when it comes to gold and silver mining… costs have quadrupled since 2002. It’s all due to the price of energy.


      • It’s mainly due to an increase in price of energy, lower ore grades, and management incompetence.

        • Haha. That is so true. While ore grades have degraded considerably since the turn of the decade (I think 60 or 70% or so?), and energy costs have risen considerably, all that is put in the shadow by the incompetence of these mining CEOs. I can’t believe how stupid most of them are. I am never putting ONE SINGLE CENT again into miners. Miners are almost worse than the bullion banks.

  13. Thanks Steve for all your work, I appreciate your no B.S. approach.

  14. I wonder if Steve will write a report on how much gasoline substitute you can make from a bushel of $6 corn?

  15. Unfortunately, individuals who do not understand the EROI have no idea that Corn-Ethanol has one of the worst EROI values of energy. If we look at the chart below we can see that Corn-Ethanol ranks right above its illegitimate brother… biodiesel.

    Anyone mentioning the wonders of Ethanol production to a team of EROI scientists… would become the laughing stock.

    Actually, I have seen studies showing Corn-Ethanol EROI of 1.2/1.

    Ethanol production will decline after U.S. oil production peaks 2015-2017… when the drilling hamsters at the Bakken and Eagle Ford run out of sweet spots to drill. Of course drilling will continue for years, however lessor quality locations will not allow oil production to offset the high annual declines.


    • great chart

    • And the corn ethanol uses about as many gallons of water as gallons of ethanol produced. And of course you’re taking corn out of the food supply so fat slobs can drive to Kmart.

  16. So Apmex believes the American public and foreigners bought 13 million ounces of silver Eagles in 3 months. Really? I find that hard to believe. I don’t personally know anyone that owns silver bullion. There are very few people that have extra money and even fewer that look at PMs.Everyone I know invests in the stock market and feels sorry for me because I’m into PMs. All the articles I’ve read state that P.M. Sentiment is in the toilet and that is what I’m seeing. Americans are almost always late to an investment party. I find it hard to believe that individuals are buying millions of ounces every year.

    • Petedivine,

      I spoke with Pete Latona, Head of Sales at Apmex. They are the largest online precious metal dealer in the U.S. and some say the world. They sell to 50+ countries. They are also one of the 13 Authorized Dealers. Pete also told me that Apmex purchases additional Silver Eagles from the other 12 Dealers when they need more stock… which is often.

      I am not quite sure yet the MIX of buying, but Latona states the overwhelming majority of their sales are to regular folk all over the world.


      • Steve,

        Next time you communicate with pete Latona see if he can give you a ballpark % of how much of the ASE’s go abroad versus U.S. shipping destinations.

        • That’s the kind of inside info that is so valuable to us investors. Thanks very much for the effort Steve!

  17. I bet you know people who own silver. It’s just not something most people talk about (investments)

    I sell silver to 5-8 individuals that are repeat customers & if they’re not reselling,they all are in the 20k ounce range…

  18. Interesting article here:

    It looks as if, in response to sanctions, one of the biggest Russian banks is now backing their roubles with gold. If this is true, I think this is quite underreported and could turn out to be a big deal.

  19. “Cash Cost accounting is an insane outdated metric that provides no real clue as to the profitability of a company.” That statement is totally incompetent. Cash cost is the only relevant way to view the business.

    From the beginning. Before anything happens, there’s a venture study that estimates capital and operating costs. That can be a new operation, expansion of a current one, new product line. If it looks favorable it’s a go but no significant resources are committed until there are enough customers signed up on long term contracts to cover fixed cost and ROI. Assuming that happens and everything moves forward, as soon as the start button is pushed, capital cost is sunk money and cash cost determines the future outcome. Low cost provider always wins over the long term. That’s the way the real world operates.

    To say the business is driven by or even slightly affected by “provision for, adjustments to, changes in accounting methods, allocations, depreciation reserve, future tax incentives …” is total nonsense. These aren’t even considered in venture analysis nor analysis of current operations. And, you can’t meet the payroll with any of them.

    Non-cash costs (leading to total cost) can be manipulated to any value with the push of a computer button. The clue is in the number of footnotes to the annual financial statements. It doesn’t take 343 footnotes to CYA on an honest, factual report. The rule of thumb is anything over 3, the books are cooked in proportion. How many do these mining companies have?

    Another point. In your financial table, notice that the “by-product credit” is 10 times the silver. So actually silver is a small sideline business. Cash cost isn’t stated. Allocation method can make silver cost and profitability anything you want it to be. In practice, costs shuffle across individual product operating statements to maximize the “bonus metrics” set for the management. That’s in the operating set of books that you won’t ever see. For public documents, product lines are grouped in the reports so you can’t separate out what’s going on with any of them and can be manipulated to support whatever BS the management is pushing. That’s the way that works.

    • Warren B,

      Or should I say Micheal… or is it Melissa P? I gather you get my drift here. I am responding to your comment but wanted to let you know I am making a FULL POST on this very subject. And I plan on including you in it.

      Aren’t you lucky.


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