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Can Gold and Silver Mining Operations Be Sustained at Current Price Levels?
By Paul St. Julien
Expert Author Paul St. Julien
Lower spot prices have stimulated massive demand for physical gold and silver. The paper prices of these metals are completely devastating the industry, and their spot prices are unlikely to remain below the cost of production for very long.
The costs for silver mining increase every year, regardless of the market price. Gold and silver spot market prices currently sit below the cost of production for most major producers. Couer d'Alene Mines' cost to produce an ounce of silver has been $27.72. Agnico Eagle reported an average cost of gold production nearly $1,350 per ounce.
At $27/oz. US silver mines generally would break even. Below $20/oz they are losing money. Silver is not profitable to mine by itself. It comes as a secondary product of other metals. To mine for silver alone would cost easily $50-$100 an ounce.
All mining companies sell their by-product metals at market value. Some mining operations use hedges, or have a contracted price rate to insulate them against temporary price decreases. Sustained low prices are another story.
If the price of silver falls for example, so does the price for lead, zinc, copper and gold.
Every ounce of gold or silver mined to stay in business needs to be replaced with exploration for future deposits. This is a huge cost in the gold and silver mining industry. Without the exploration for more deposits, the current supplies simply run out.
The industry has such difficulty raising capital resources, locating new high grade deposits, and the political challenges with developing those deposits, that mining companies operate on pretty thin margins.
Should spot prices for gold and silver languish at current levels mines will be forced to suspend operations.
Mining as with all other industries, seems to have a correlation between production volume and cost. The more volume, the lower the complete cost to get the metal to the consumer. This current price environment will force smaller mines to consolidate, in order to reduce operating costs. This is similar to what agriculture was forced into 40 to 50 years ago.
Gold and silver mines are cutting costs everywhere they can. They're reducing capital expenditure, exploration, and development. While gold and silver mining companies have been cutting costs all along, a sustained dip in their prices could be catastrophic for smaller companies operating mines with tight or no margins at all.
If the price of gold goes down to $1,280 or $1,260 for a short time, most mines would try to continue operations. Most mining companies are reluctant to close a mine at the first sign of weak prices. The costs involved to close down and later reopen a mine are simply too great.
The longer these spot prices remain low, the more upward energy they're storing. Low prices are stimulating consumption of the actual metals, while mining production is slowing, and exploration for new materials has stopped completely. Unless demand suddenly stops, the prices have to increase, because demand will be outpacing supply.
To me this is a seldom seen opportunity to be buying as much gold or silver in the form of bullion or coins as I can afford, while the prices are so low.
To discover more about coins: collecting issues, money management, investing in the rare and bullion coin market, and much more, I invite you to visit http://www.heritagecoingallery.com for videos and free tips on buying coins at the best prices.
Article Source: http://EzineArticles.com/?expert=Paul_St._Julien
$NVGC engaged the services of Brian Brewer and Associates to conduct the exploration program and the writing of the NI 43-101 report for the Diamond Jim Mine
http://finance.yahoo.com/news/qualifying-geologist-now-hired-evaluate-213000641.html?soc_src=mediacontentstory
GM all NVGC MONEY MAKING INVESTORS........Hammer
I wonder if the 3 man advanced team gathered any surface minerals at the Diamond Jim mine. If they did and I expect they did, I bet they sent them to the assayers already.
E*Trade is showning .40 - last trade, down .016 pre-market. I hope you're right, jeresy. :) I could should use another good day... :D
$NVGC expanded by approximately 60% for a total of 53 claims
DEL MAR, Calif., Nov. 26, 2013 (GLOBE NEWSWIRE) -- Nevada Gold Corp (NVGC) is pleased to report that the recently announced claim expansion program by staking has been completed at the Diamond Jim Mine project in the Island Mining District north of Elko, Nevada. The size of the property has been expanded by approximately 60% for a total of 53 claims. A surface program of geological mapping and sampling has been completed and preparation and planning to open the underground workings in the next phase of the program is underway. A graph accompanying this release is available at http://media.globenewswire.com/cache/27842/file/23455.pdf http://www.stockwatch.com/News/Item.aspx?bid=U-z10059535-U%3aNVGC-20131126&symbol=NVGC®ion=U
Wrong The bid is at yesterdays close .416 and the ask is at .45 Telling all the NVGC will fly
Not according to pre-market trading..
I agree Jersey, up we go again...IMHO SmallCapVoice.com, Inc. is Now Handling the Investor Relations and Corporate Communications for Nevada Gold Corp
[GlobeNewswire] - DEL MAR, Calif. -- Merrill Moses, President of Nevada Gold Corp, (OTCQB:NVGC) is pleased to announce we have retained SmallCapVoice.com, Inc. (SCV), a public relations and investor relationsfirm to serve ...
read full: http://finance.yahoo.com/news/smallcapvoice-com-inc-now-handling-120000948.html
$NVGC
Pumpsanddumpsdotcom onto this now, it's dead meat.
Even this being a Holiday week one would think peoples attention would be diverted away from the market. Not so with NVGC. There is so much attention on this company that the stock will resume its trend upward. I see a huge future for NVGC.
Good morning Jersey, you are absolutely correct!! Nevada Gold Corp (OTCQB:NVGC) is a publicly traded US exploration company focused on precious metals targets in the gold rich area of North Eastern Nevada.
$NVGC
Yesterdays PR from Nevada Gold Corp.
Nevada Gold Completes Expansion Program at Nevada Mine Site
Date : 11/26/2013 @ 9:20AM
Source : GlobeNewswire Inc.
Stock : Nevada Gold Corp (QB) (NVGC)
Quote : 0.416 0.0 (0.00%) @ 5:37AM
Nevada Gold Completes Expansion Program at Nevada Mine Site
Print
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Nevada Gold Corp (QB) (OTCBB:NVGC)
Intraday Stock Chart
Today : Wednesday 27 November 2013
Click Here for more Nevada Gold Corp (QB) Charts.
Nevada Gold Corp (OTCQB:NVGC) is pleased to report that the recently announced claim expansion program by staking has been completed at the Diamond Jim Mine project in the Island Mining District north of Elko, Nevada. The size of the property has been expanded by approximately 60% for a total of 53 claims. A surface program of geological mapping and sampling has been completed and preparation and planning to open the underground workings in the next phase of the program is underway.
Good morning. The goal of $1.00 is in the short term. The Diamond Jim mine is about to go into production. Just wait till the minerals hit the market then watch the price of the stock. You will wish you bought at $1.00.
I think so Hammer!!! Let's do it!
$NVGC
CABY WE GOING TO $1.........Hammer
How else can you create a "gap up" the next day?
Barchart Quote http://www.barchart.com/quotes/stocks/NVGC
Weekly Chart http://stockcharts.com/h-sc/ui?s=NVGC&p=W&b=5&g=0&id=p54988478290
$NVGC
Thats some issues and all that takes YEARS to accomplish. Hope everyone is up for a looooong wait if your a long here. Much can happen twix now and then.
Do you suppose they will mention which permits have been applied for and if any have been issued? They could also mention how long they expect the permitting process to take.
Have they submitted a Plan of Operation to BLM?
Is there water at the site?
Are the roads adequate for hauling if processing is to be done off site.
Permitting for on site processing?
Are there any environmental impact issues, flora/fauna ... ?
If local processing , what kind, heap leach , washing , waste control ... ?
Fuel storage facilities
reclamation of site ?
BACK TO NEW HOD........NVGC........Hammer
I have had no desire to follow any other small cap trade for the last week and a half because $NVGC has been that interesting to me and that electric......and That Rewarding.
Tomorrow is a full trading day and then there is no trading on Thanksgiving Day (Thursday) and then were open for a a half session on Black Friday!
* The NYSE, NYSE AMEX and NASDAQ will close trading early (at 1:00 PM ET) on Wednesday, July 3, 2013, Friday, November 29, 2013 (the day after Thanksgiving) and Tuesday, December 24, 2013.
http://www.rightline.net/calendar/market-holidays.html
Exactly Hedge......cannot wait for the next announcement!
$NVGC
Daily Chart http://stockcharts.com/h-sc/ui?s=NVGC&p=D&b=5&g=0&id=p23620849837
$NVGC
Stock Technical Analysis http://www.stockta.com/cgi-bin/analysis.pl?symb=NVGC&cobrand=&mode=stock
Is tomorrow a SHORT TRADING Day or a full one? If we close at $42-$.45 then we have a shot tomorrow, but I don't need it that fast. We will get there. $.75 is my near-term target
The million dollar question is whether we see .50 on NVGC before or after the Thanksgiving Holiday this Thursday!
The Long Canyon Trend is Nevada’s most recent discovery in a gold mining boom that started in 1981. The State of Nevada is responsible for over 80% of the gold production in the Untied States. This mining friendly State is the fourth largest gold producing area in the world, behind Australia, South Africa and China.
In February of 2011 Newmont Mining Corp surprised the mining community when they announced their intentions to acquire a Long Canyon Trend exploration company named Fronteer Gold, for approximately $2.3 Billion.
Due to the recent swiftness of the PR's i think the next one (underground planning/prep etc) has either already been accomplished or is now being finished. I think we see a PR on it before the eow.
They already have their ducks lined, hence the PR barrage and happy shareholders.
".....preparation and planning to open the underground workings in the next phase of the program is underway."
This is what our Next $NVGC PR will most likely discuss, and it is just one step closer to building more and more value.
NVGC @0.425, up 6.25% with 1.35M volume!
You are welcome Hedge! You are right my friend!
$NVGC
This is the most sideways Churn in a tight zone that we have had in a WHILE. This is our least volatile day after the open so far, but I am enjoying it. We are STILL UP and looking bullish as ever on news. Great day here.
Hey thanks man I did not think to look at the SS Activity on this one yet, but we definitely could have been hit hard on our down day on huge volume.
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