Hi Hobbers!
Is 30 million ounces of new silver production huge? I have read a wide range of estimates for worldwide silver production numbers but I think the midpoint is somewhere around 700 million ounces of silver per year. Therefore even 30 million ounces of additional production is still less than 5% in extra anual mine supply. I would think that the additional worldwide silver demand is rising by more than 5% per year.
I can think of several other mines that are expanding production currently, each of which will contribute additional silver and silver by-product to world supply. I can also think of several currenlty producing mines that are approaching the end of their reserves and will soon shut down, therefore reducing some of the world silver supply.
At the end of the day, what has me bullish is that silver still managed to trade well above $30 in the 1980s when there were stockpiles of more than 2 billion ounces of refined silver. I think we have a fraction of that around today, new mine production coming online or not. I doubt additional mine supply is going to be a limiting factor for the price performance of the metal in the years ahead.
cheers!
mike
