Start of the physical squeeze??

[5huggy]

If the details below lead to a tightening of the physical metal markets, especially as other companies could well do similar

Then the natural order will be increasing prices (over time ) which would lead to a "short squeeze" !  IMHO

Gold and silver miner Hochschild Mining Plc has suspended operations at its Arcata precious metal mine in south west Peru, saying a low silver price had left it no choice but to halt production at the mine.

Full article here - - - - >>>>>>    https://uk.finance.yahoo.com/news/hochschild-mining-shuts-down-arcata-mine-peru-072306288--finance.html

[Stu]

I feel sorry for the employees themselves, poor enough country as it is. From what I understand miners tend to operate at a loss for as long as they can as the cost of mothballing then reopening mines is prohibitive. When this happens at least we know we are close to cost of production as figures can be subjective from company to company.

[motorbikez]

@5huggy  Maybe too early to say, as Stu intimates all silver producers have different costs to factor in. If HOC are in the lower quartile for production costs that could be an indicator for other companies to look at their operations & they may follow suit. The silver markets would sit up & take more notice if FRES suspended silver production at one or more of its mines. Something to consider,HOC was if I remember rightly owned close on 50%  by the Hochschild family & companies which they owned 100% 5-6 years ago when I actively traded them, so there may be other reasons for mothballing the mine.

[5huggy]

Stimulating and thought provoking @motorbikez , and yeh you are quite right @Stu it is always the little guy who ends up being kicked the hardest!

On that note ! - - I hope these "bleeps and sleezeballs " and others       GET WHATS COMING!

"Canadian class action against gold and silver market rigging continues against other banks"

FROM here - - - >>>  http://news.goldseek.com/GATA/1549979201.php

[vand]

I'm surprised tbh given that the low in silver was 3 years ago now, but I guess that $15.7 spot price means it is still a precarious business for some operations.

It's unfortunate for the workers, but this is how markets are meant to operate and its disingenuous to pretend otherwise;  low price leads losses which leads to to contraction of supply, which eventually leads to higher prices. The labour freed up will be put to more productive use which will ultimately better benefit them and their country.

[Kookaburracollector]

It’s a pity the Chinese and Russian central banks don’t buy up a lot of these silver mines and take all of the supply for themselves.i.e. Not supply the market..it wouldn’t take long for the price to rocket for what little remains.

 

[HawkHybrid]

5 hours ago, Stu said:

When this happens at least we know we are close to cost of production as figures can be subjective from company to company.

 

this is a too simple view of the situation.

my understanding is:

hochschilds arcata mine production cost is ~$16-18/oz.

at their newer immaculada mine cost is ~$10-12/oz.

arcata is an old mine. the best grades have already been

mined. this is not a reliable indicator for costs for a decade

or more as the difference in prices is too big.

listen to david morgan: demand plays a big(lions share) part

in the pricing of silver.

my interpretation is that supply plays a minor role in

determining the silver price. it's a buyers market.

 

I also feel for the employees, but if it's no longer profitable

then all involved must move on and open the next chapter

in their lives.

 

my take from it is that the market for silver is very weak.

only the more streamlined operations are profitable. the

longer term demand for silver simply isn't there. imo a

large chunk of the silver demand comes from speculators.

speculators(people who want to turn silver into gold) are

not buyers of silver, they are middlemen who's interest is

to turn a profit.(I'm a speculator in silver, investor in gold)

 

HH