One of the most insidious problems taking place in the gold and silver mining industry is the decline in falling yields. Not many realize, when yields decline, production evaporates and disappears. To offset the decline in metal yields, the mining companies have to add new mines and or increase the amount of processed ore.
If we take a look at the top 6 silver producers, we can see that the average yield declined 38% since 2005, from 13.0 oz/t (ounce/tonne) to 8.1 oz/t in 2012:
The companies and individual primary silver mine included in the graph above were, Fresnillo, BHP Billiton Cannington, Pan American Silver, Polymetal, Hochshild & Hecla. Furthermore, I only included primary silver mine production from these companies.
For example, both Fresnillo and Polymetal had higher annual silver production figures than is shown in the graph above. This by-product silver came from their primary gold mines and was excluded from the calculations as it would have significantly lowered the average yield.
Please follow SGT Report on Twitter & help share the message.