Discusses some of the issues with silver mine costs, including whether to express on a by-product or co-product basis, a feature of the rarity of pure silver mines.
This is also a driver in whether the cost curve has the effect it should in rebalancing price and supply through mine opening and closure.
There is a more positive bias to Zinc which may make some co-product miners interesting.
Expressed as a by-product credit other metals can make silver mine costs appear very low or negative. Co-product calculates an equivalent volume of silver ounces which is a fairer representation of costs but risks distorting the real exposure to silver metal.
Interestingly the long recent price support at $20 is the 2014 cost forecast on a co-product basis. The longer run costs are $15 which many see as longer term support and are indeed where prices launched from in 2009.
These curves represent only BMO coverage Silver focussed miners. Much supply is generated as a by-product to other metals. Other metal prices could have a bigger impact on mine supply.
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