2013 FULL YEAR RESULTS: Top Primary Miners Real Cost To Produce Silver
While some of the top 12 primary miners stated adjusted income gains for the year, all the companies suffered net income losses — a staggering $1.7 billion loss for the group.
With these huge losses, you would think the top silver institutions would report this in their annual publications. Unfortunately, the opposite is the case. According to CPM Group’s 2014 Silver Yearbook and Thomson Reuters GFMS most recent World Silver Survey, the top primary miners produced silver at a Cash Cost below $10 an ounce.
Here are the FULL YEAR financial results for the top primary silver miners in 2013:
This low Cash Cost figure gives the impression to the unsophisticated precious metal investor, that silver is very inexpensive to produce. Now, when I say unsophisticated, I mean lacking the detailed knowledge of the silver market and mining industry.
CPM Group announced that the average cash cost to mine silver in 2013 fell to $9.68 an ounce from $10.01 in 2012. GFMS in their 2014 World Silver Survey stated the primary silver miner’s cash cost increased from $9.16 in 2012 to $9.27 in 2013. If we average the figures from both of these institutions, the top primary miners produced silver in 2013 at an average cash cost of $9.47.
Top 12 Primary Silver Miners Suffered A Loss Of $1.00 An Ounce In 2013
According to Kitco.com, the average price of silver in 2013 was $23.79. Using simple arithmetic, the top primary miners should have made a cash profit of $14.32 an ounce ($23.79 – $9.47 = $14.32). However, this was not the case. My top 12 primary silver miners as a group suffered an adjusted income loss of nearly $1.00 an ounce in 2013.
Last year, the top 12 primary silver miners stated total revenues of $3.1 billion while suffering a net income loss of $1.7 billion (largely due to impairment write-downs) and $139.9 million adjusted loss for the group.