re: silver to explode * interesting read Yes, an interesting...

re: silver to explode * interesting read Yes, an interesting read. There seem to be a few articles around highlighting impact that supply deficits will have on the price of silver.

People might also like to check out the following ("Silver's as good as gold") which you can access through Kitco or direct on:

http://custom.marketwatch.com/custom/earthlink-net/mw-news.asp?guid={327FFE0F-C053-4B3D-A87C-61FABA1D1E32}

Also from Kitco Casey is an interesting article on silver mining in Peru, mainly focussing on Fortuna Silver which has recently taken over a project previously mined by Hochschild Group. It also mentions Palmarejo, Endeavor Silver and First Magestic as new companies operating in Mexico, encouraged by the increase in silver prices in recent years (following its fall after 1980s highs, of course).

I think the more interesting aspect of the article though was its comments on silver as a commodity metal rather than a monetary metal (like gold) - which basically amounts to saying that its value depends on the more mundane mechanics of supply and demand rather than oil prices, the US$, India's marriage season, etc etc.

While silver used to be a monetary metal (and the writer suggests it should be and may be again one day), it ain't one now. Which means that the economics of any project are still are matter of supply and demand, as reflected in the commodity price, and costs, of course.

So the suggestion that some articles seem to make that silver is really more scarce than its price suggests are just wrong - though clear evidence of current shortfalls in supply would suggest that those companies able to increase or come into production earlier will benefit. Of course, this ain't news either...

Another interesting comment from the same article was that Fortuna were told that "no one would take a silver company with only 21 million ounces of silver seriously"...

{Someone remind me, how much does Palmarejo have at last count...?}

...and that they set about establishing a working mine with ongoing resource drilling to add ounces as they produce. Of course, this takes any mining operation back into questions of prices, costs and cash flow... profitability basically.

Now I'm not suggesting that BSG should be considering this business model as an option. I haven't even considered whether it would even be feasible given the stage that their project is at... {I'm displaying my ignorance here} ...but it makes for interesting musings...

And I think it means that fears of premature takeover may be unfounded, until those extra ounces are proved - or gold becomes the dominant resource...

Do I remember hearing "open at depth ... and along strike"...???? Or did I just dream that?

cheers, Hal

p.s. the web address for the article is:
http://www.kitcocasey.com/displayArticle.php?id=280