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The SILVER Price Beat Down, the CHARADE of the Chicago CME & PAPER HFT: It COSTS Around $24 To Pull PHYSICAL SILVER Out of the Ground — V The Guerrilla Economist

[Ed. Note: The action, particularly in regard to silver, begins around 14:10]

from Hagmann & Hagmann, via Before Its News:

The on Hagmann And Hagmann Report: V, the Guerrilla Economist, walks us through the labyrinth of the current economic crisis – yes, there is one, and gives us possible dominoes that might fall first, an event or series of events that will ultimately bring down the U.S. Dollar.The Guerrilla Economist, who has a proven near perfect accuracy rate, is the founder and operator of his website, Rogue Money at We’ll explore the proxy war going on between Russia (and China) versus the United States, and how this proxy war is laying the groundwork for a potential shooting war, or WW III. Sound ominous? It is, more than most people realize. The Guerrilla Economist will also discuss the Silver and Gold manipulation, and where both metals are expected to be trading in the next 3, 6, 12 and 18 months. Also, Mike Rosecliff will be interviewed with the Guerrilla.

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4 comments to The SILVER Price Beat Down, the CHARADE of the Chicago CME & PAPER HFT: It COSTS Around $24 To Pull PHYSICAL SILVER Out of the Ground — V The Guerrilla Economist

  • Stuckinsidethematrix

    I feel like a bit of a rant and a ramble, why not take a walk with me……

    A point I feel most people / investors miss is the difference between Silver contained in a hundred tons of rock at the end of a mine shaft, and refined and assayed Silver contained in a one ounce bullion product.

    $24 an ounce to pull it out of the ground? Interesting figure, and possibly accurate, but I always find such figures dubious as no one really knows for sure outside the cartel.

    I am not critisising V in any way, I am just sounding off that most people seem to be missing the point – a hundreds tons of rock containing one ounce of 999 Silver (once processed, separated, and refined) does not mean a one ounce bullion product is only worth the extraction cost.

    I have heard other ‘experts’ of international repute quote extraction costs of anything from $5 to $35 per ounce of Silver, yet few ever then add the disclaimer, ‘but that cost excludes processing of the rocks/earth, refinining, assaying, and bullion product production’.

    We then all get caught up with the partial story that Silver price should only be at, or close to, extraction price.

    Extraction cost seems to have become linked to ‘paper price’ which in turn has become linked to extraction price, ie the lowest possible quoted price to get one ounce of metal out of the ground (even if it is still locked up in rock and earth) has become THE market price for a finished physical bullion product (retailers premium excluded).

    Worse, on top of the above mentioned issues, the miners use dubious accounting methods and real extraction costs are not clear. The juniors effectively get Silver for ‘free’ because thier costs and accounting is set up for Copper / lead / iron extraction or whatever thier ‘primary’ business is. If it suits them to use Silver to offset the price of Copper extraction they will, and vice versa. Silver to them is just a biproduct of other metal extraction.

    The primary miners on the other hand get other metals as biproducts along with Silver, which can be accounted to offset thier Silver extraction costs. This makes thier books look better balanced but skews the true cost of extraction.

    Also, modern mining is very energy intensive – oil and electricity are used in massive amount to cut and move hundeds of thousands of tons of rock. It is therefore closely linked to the price of oil, gas, and electricity, and transportation costs.

    We must try to remember that the extracted ounce price is for approx 100 tonnes of rock cut from a hole and then placed in a pile at the opening of a mine. Good luck producing a one ounce bullion product from that without considerable investment and other costs.

    Thing is, add in all the ‘real’ costs and Silver is clearly ‘worth’ more than todays spot price – even if there was no consumption demand from investors and industry .

    I figure the real reason miners shares are dirt cheap is because savvy and knowledgeable investors know that they are running at a loss, and that there is likely some serious ‘comex style’ manipulation going on at source and they don’t want any part of that.

    My personal view is that the extraction cost being psychologically linked to the ‘true price’ of Silver, which is professed to be the ‘spot price’, is a sophisticated mind fu-k / psyop to stop the less well informed from realising the true costs of Silver extraction and processing, and therefore the true value of Silver.

    Add the above to the equally grand mind fu-k / psyop which is the paper Silver market (and the associated price-fixing), and it is little wonder why very few people indeed see that extraction cost is not where the price of an ounce of bullion product should be.

    Well, thanks for walking with me and allowing me to rant and ramble…….

  • hal

    I can’t say I am anywhere near certain in terms of the actual production cost across the mining industry as a whole. It would stand to reason, though, that over the long haul, the market price would have to reflect a bare minimum of that extraction cost. Even if silver was a by-product, it still has a total cost per oz in relation to the amounts of and demand for the “focal” metals that are being mined….Those costs and quantities I can hardly speculate.

    Industrial demand certainly plays a role and if that increases, surely that is bullish for silver long term…particularly with inflation we have. That could only really be offset by significantly decreasing cost of production somehow.

    It seems as though the monetary demand is the biggest factor. There are a good number of people on the planet who both understand silver as real money AND have the means to actually get some of it to save. It’s safe to say, however, that most of the world is probably not seeing silver as a financial instrument and savings mechanism. If this were to change, slowly or abruptly, that demand is what would really drive the market hard.

    To me it seems inevitable that at SOME POINT, a HUGE portion of the world’s finances will TRY to into real assets, dominated by precious metals. There is simply no other item/thing/element that exists which possesses the qualities of PM as a simple and easy store of value and unit of trade. Sounds cliche’ these days but THEY ARE THE HIGHEST FORM OF MONEY plain and simple. People can ignore that, but it doesn’t change the reality. When people (again) wake up to this, I don’t think there is any stopping it….even by the “elite”.

  • Gerald

    In 2013, Hecla’s Greens Creek mine produced 7.4 million ounces of silver at an average cash cost per ounce of $4.42(1). Hecla currently produces silver from two silver mines, Greens Creek and Lucky Friday. The Lucky Friday mine resumed operations and production in early 2013 and produced 1.5 million ounces of silver. In June 2013, Hecla’s acquisition of Aurizon Mines Ltd., brought Hecla the Casa Berardi gold mine located in Quebec, Canada, which produced 62,532 ounces of gold during the last seven months of 2013.

    (year ended December 31)
    Silver Ounce Production:
    (in thousands):
    2010 2011 2012 2013

    Greens Creek Unit 7,207 6,498 6,394 7,448

    Lucky Friday Unit (2) 3,359 2,985 – – 1,459

    Total silver ounces 10,566 9,483 6,394 8,907

    Gold Ounce Production:

    Greens Creek Unit 68,838 56,818 55,496 57,457

    Casa Berardi Unit(3) – – – – – – 62,532

    Total gold ounces 68,838 56,818 55,496 119,989

    Average cash cost per ounce: ($/oz)

    Cash cost per ounce of silver(1) $(1.46) $ 1.15 $ 2.70 $ 6.84

    Cash cost per ounce of gold(1) $ 951

    (1) Cash cost, after by-product credits, per silver or gold ounce is a non-GAAP measurement. A reconciliation of cash cost, after by-product credits, per silver or gold ounce to cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) can be found in the legal page of this website.

  • rl

    Thanks for all the production cost info.
    Certainly paints a clearer picture.
    As for the new method of forecasting, arclight, I am very interested to see the results as it were.
    Claims of accuracy are one thing while proof of said forecasts being made and then validated at a later date are another. I would like to think v and his pals operate under the vest of intentions but time will tell. The reference to the webbots was telling as they have been notoriously inaccurate to say the least and lead many a stray for sometime until it was clear they were not reliable in any real fashion as a means future forcasting on many fronts. This latest improvement claiming we have seen the bottom ‘thursday or friday’ can easily be put to the test as we speak.

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