Silver Mining vs Gold Mining

The process for mining silver and mining gold are very similar. And one of them is 63 times more expensive than the other.
Huh something just does not add up.

4 comments to Silver Mining vs Gold Mining

  • BillyB

    It makes sense to me why they are difference it is the amount of material that has to be moved to get an ounce. Did you see the trucks used for gold mining.

  • Bruce

    It would add up perfectly if gold were 63 times more rare than silver, for it to be 63 times more expensive. What doesn’t add up isn’t mentioned in either of the videos and therefore isn’t a conclusion that the viewers can come to themselves. In fact, the grade of the silver ore is never mentioned in the top video, although 1.33 oz/ton can perhaps be inferred at 4:23, if the quantity of ore used to get the button is one assay ton. (But, it might not be.) The gold video mentions 4 oz from 400 tons, or .01 oz/ton, at 1:40. If both these are correct, then the pair of videos implies that gold is 133 times more rare than silver, making the 63:1 price difference either an indication that gold is underpriced, or silver is overpriced or both. This also assumes that the costs of mining and processing a ton of either ore is the same, which also can’t be inferred from the videos. So really nothing solid can be inferred from this pair of videos about the relative price or value of either metal. Note that the relative abundance of the metals in the Earth’s crust (about 16:1 silver:gold) is irrelevant, because those metals aren’t mined from the average crust but rather from gold and silver mines, which have ores of extremely non-average abundances. It’s the ratio of abundances of those that’s really important.

  • Joe

    If you look at the process of both gold and silver it seems silver is the more expensive because of the process that is needed to extract the silver from all those other elements. Has anyone ever heard of panning for silver? There’s a good reason for that, it’s because you cant, silver is always attached to other elements where as gold doesn’t necessarily have to be, hence why you can pan for it in a creek or river.

  • Jesse

    Okay, I did my own research and it turns out…

    According to Wikipedia (and its reference: http://www.mineweb.net/mineweb/content/en/mineweb-gold-analysis?oid=19485&sn=Detail) gold in 2007 on average cost $317/Oz to mine. Silver on the other hand costs
    (according to this site: http://srsroccoreport.com/silver-mining-costs-exposed-cash-cost-fallacy/silver-mining-costs-exposed-cash-cost-fallacy/ http://srsroccoreport.com/the-primary-miners-the-fed-18-silver/the-primary-miners-the-fed-18-silver/) about ~$21.57/Oz (2013) to produce and according the second link a break even cost for a silver mine is ~$26.45/Oz.

    This said we can firstly figure out that of the current price of gold, ~$1330/Oz about 24% of the price is due to production costs. At the current price of silver, ~$22.68/Oz about ~95% of price is due to production costs! That’s a ridiculous margin difference, not considering the current mining ratio being under 1:10, (check the precious metal production widget on the side of the 2nd or 3rd link).

    The most obvious measurement is this, divide the cost of gold Oz production ($317) with the cost of silver Oz production ($21.57) and the ratio is ~1:15! Even if the mining cost ration of gold to silver is slightly greater than its natural occurrence ratio (~1:9-10), it’s still ridiculously out of proportion from the market, especially considering silver has more industrial use than gold. Either we are over valuing gold, or we are under valuing silver. I’ll let you decide…

    Looks like Chris Duane was right, even when we DO NOT take into account what silver has been trashed and what gold has been treasured (from previously mined reserves), the current Energy return on investment ratio of gold to silver coming out of the ground is 1:15! The silver markets have never been so wrong or manipulated…

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