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deleted
35 Posts |
 Posted - 07/29/2007 : 05:22:23
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hi guys just want some opinions
if the silver price eventually rises to say $40-$50 and say there is a supply/demand "crisis" do you think
a)mining production will increase as a result or would it remain as it is with not enough being produced to fulfil orders?
b)would mining share prices go up in price as a result of spot price rising?
c)would mining share prices rise because of a lack of available product?
d)would specialist silver miners see more share take up as having a newly emphasised stranglehold on the market?
yes i'm still thinking of getting some sterling mining shares would just like some opinions thanks
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 07/29/2007 : 13:33:43
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My opinions on your questions.
A. In order to have a crisis as you stated mining production would not be able to keep up with demand. Sure, higher prices will always encourage new mining, but mining production would have to be the problem and not the easy or fast solution.
It would appear that a quicker solution to such a crisis would be more above ground silver entering the market that is now waiting for such high prices.
B. It would depend on the particular mining company. Some would be mined out, others would still have underground reserves.
C. Again it would depend on the mining company.
D. I'm not sure what you are asking here and it seems to be a question beyond my knowledge.
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Fanaticism is doubling one's efforts, yet forgetting one's purpose.
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 07/29/2007 : 16:40:25
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My thoughts on the questions
A)Mining production would increase, though the number of mines that mine just silver are few & far between. Silver is a by-product of copper, zinc & lead mines. These silver by-product mines supply a good portion, if not 50% or more, of the silver brought to market. These mines would not necessarily increase production just because of the price of the by-product metal.
Consider copper mining for example. The demand for copper has increased, copper mine production has increased but the supply is barely keeping up with demand. That goes double for nickel mines.
B)Mining share price would go up for the following reasons:
a)Back in the 1930's in the US, when gold could only be owned as gold coins or mining shares, not in bullion form, the price of gold mining shares increased since gold mines were a way of owning gold legally, even if it was paper gold.
b) If the cost of mining remains the same or doesn't increase too much, the mining companies end up with more profits for the same cost of production per ton of ore dug out of the gorund.
Example: If the costs for digging each ton of ore out of the ground remain the same as the quantity of ore dug out increases, then it is economical for the mines to dig more to meet demand. If the cost per ton increases as more ore is dug out, the mines will set a level of how much ore to extract & won't mine anymore. Profitability for the mines dictates this.
c)Supply restraints. We are seeing this noew with nickel, there are bottlenecks that are causing supply to fall short of demand, not enough refiners, not enough smelters, shortage of recycling, etc.
C) Yes share price would go up if supplies were tight. (Again, look at nickel mining.)
D)Specialist silver mines would not have a stranglehold on the price/supply due to the fact silver comes from so many other non-silver mines , 100% silver mines are few and far between and recycling of silver/silver speculators would push up supply.
I doubt there will be an OPEC for silver.
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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deleted
42 Posts |
Posted - 08/14/2007 : 16:09:15
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quote:
Originally posted by harbinger
hi guys just want some opinions
if the silver price eventually rises to say $40-$50 and say there is a supply/demand "crisis" do you think
a)mining production will increase as a result or would it remain as it is with not enough being produced to fulfil orders?
b)would mining share prices go up in price as a result of spot price rising?
c)would mining share prices rise because of a lack of available product?
d)would specialist silver miners see more share take up as having a newly emphasised stranglehold on the market?
yes i'm still thinking of getting some sterling mining shares would just like some opinions thanks
a) Yes, but not fast enough to matter. In fact, they should do it now and they know it's not easy.
b) Yes, but physical silver still sells faster.
c) I'm not sure. Stocks are never more stable than physical products. But my (probably wrong) opinion is, when silver demand increases to the point silver is $40-50 an ounce (not sure when), people will see that having silver in hand is much better than waiting on futures. Compare this to oil today.
d) no idea. |
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rising silver price?
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