Since I started researching the primary silver mining industry, the yields at many high-grade silver mines have fallen drastically. For example, Fresnillo PLC’s Flagship mine, the Fresnillo Mine, had seen its average yield decline from 15 oz/t (ounce per tonne) in 2005 to only 5.3 oz/t last year. That is one hell of a reduction in just 14 years… nearly 10 oz/t of silver yield evaporated.
- Fresnillo Mine 2005 Production = 33.4 million oz
- Fresnillo Mine 2005 Processed Ore = 2.2 million tons
- Fresnillo Mine 2005 Average Yield = 15.2 oz/t
- Fresnillo Mine 2019 Production = 13.0 million oz
- Fresnillo Mine 2019 Processed Ore = 2.5 million tons
- Fresnillo Mine 2019 Average Yield = 5.3 oz/t
Now, if we combine the top seven primary silver miners in my group, the average yield fell to a record low of 6.0 oz/t in 2019:
The companies that impacted the group’s average yield the most were from Peru. Peru’s Hochschild average yield declined from 7.5 oz/t in 2018 to 5.9 oz/t last year, while Buenaventura’s average yield fell from 10.6 oz/t to 7.5 oz/t during the same period. Mexico’s Fresnillo PLC’s average yield from its primary silver mines (Fresnillo, Saucito & San Julian) fell from 5.7 oz/t in 2018 to 5.0 oz/t in 2019.
Also, Russia’s Polymetal International, Dukat Operations, saw its average yield fall to 7.7 oz/t last year down from 8.5 oz/t in 2018. The only primary silver miner that saw an increase in yield was Hecla. Mainly due to Hecla’s Greens Creek Mine, the company’s average silver yield increased from 10 to 11.5 oz/t during the same period.
Investors have no idea what a deal they are getting in acquiring silver for such a great deal when we compare it to most of the over-valued financial paper assets and real estate. The few silver miners in the world may just surprise the market when investors begin to move into them in a BIG WAY.