Global silver supply is heavily dependent on one factor that is overlooked by the majority of precious metals analysts. For some odd reason, analysts only consider the cost of this factor and not the future supply. Without this supply, 98% of the silver production from these two primary silver mines would not have been possible.

Without energy, silver mine supply would likely collapse more than 95+%. Unfortunately, analysts only focus on the cost of energy and not the future availability of it.

For example, even though the cost of diesel for Pan American Silver was approximately 7-8% of its total mining costs in 2018, without the 15.4 million gallons of diesel consumed by the company’s mines, the overwhelming majority of that silver would have stayed in the ground. I estimated Pan American Silver’s diesel cost by multiplying the 15.4 million gallons by a wholesale price of diesel of $2.50. This is just an estimate.

I decided to focus o ... Read more »