Chile Forum

SILVER
During the last two decades the silver mining industry in Chile went through an important reactivation in production due to the accelerated development of the national copper mining industry, with the entrance into production of various important deposits.
It brought with it as a result, a total increase of more than 400% in the national production of silver as a by-product of copper and gold mining, between the years 1980 and 2007.
It must be remembered that the main local gold mines have associated silver production, a metal that during the period of low gold prices, at first fulfilled the role of holding the mining operation as profitable.
In gold mining, the value of the silver produced (the amount produced multiplied by the market or sale price), is divided by the amount of ounces of gold produced, allowing the operation to display an inferior direct cash cost, than if it had been obtained without the production of associated silver.
In this way, the percentage content of silver in minerals reinforces the investments in gold extraction projects.
According to numbers of the Chilean geological survey Sernageomin, in 2008 national gold production reached a total of 50 million ounces (or 1.405 tons), and thus Chile stayed in fifth place among producing majors at world level, and as the second largest South American producer, after Peru.
In the medium term, it is believed that silver production would have to rise as the extension of the Los Pelambres mine is completed in 2008, combined with the projects Esperanza and Andacollo Hypogene (Sulphides), towards 2010.
Nevertheless, a great jump in the silver production of the country would be sure to take place when the gold and silver project Pascua Lama enters into production.
Experts estimate that when the future Pascua Lama project enters into maximum capacity, it will extract 30 million ounces of silver annually, along with 775,000 ounces of gold a year.
The production of silver from this operation would elevate the national silver production by around 1,000 tons annual.

eeuunikkeiexpat wrote:I am waiting for the day "plata" (dinero) in Chile is actually made of or backed by PLATA REAL (AG).

Between 1817 and 1851, silver coins were issued in denominations of ¼, ½, 1 and 2 reales and 1 peso (also denominated 8 reales), with gold coins for 1, 2, 4 and 8 escudos. In 1835, copper ½ and 1 centavo coins were issued. A full decimal coinage was introduced between 1851 and 1853, consisting of copper ½ and 1 centavo, silver ½ and 1 décimo, 20 and 50 centavos, and 1 peso, and gold 5 and 10 pesos. Also in 1851, the peso was set equal 5 French francs on the silver standard, 22.5 grams pure silver. In 1860, gold 1 peso coins were introduced, followed by cupro-nickel ½, 1 and 2 centavos between 1870 and 1871. Copper coins for these denominations were reintroduced between 1878 and 1883, with copper 2½ centavos added in 1886. A new gold coinage was introduced in 1895, reflecting the lower gold standard, with coins for 2, 5, 10 and 20 pesos. In 1896, the ½ and 1 décimo were replaced by 5 and 10 centavo coins.

In 1907, a short-lived, silver 40 centavo coin was introduced following cessation of production of the 50 centavo coin. In 1919, the last of the copper coins (1 and 2 centavos) were issued. The following year, cupro-nickel replaced silver in the 5, 10 and 20 centavo coins. A final gold coinage was introduced in 1926, in denominations of 20, 50 and 100 pesos. In 1927, silver 2 and 5 peso coins were issued. Cupro-nickel 1 peso coins were introduced in 1933, replacing the last of the silver coins. In 1942, copper 20 and 50 centavos and 1 peso coins were introduced. The last coins of the first peso were issued between 1954 and 1959. These were aluminium 1, 5 and 10 pesos.

MikieO wrote:I just received this, nothing I hadn't heard before, just more bullish

http://seekingalpha.com/article/223993- ... urce=email

Chuck J 3.0 wrote:

eeuunikkeiexpat wrote:I am waiting for the day "plata" (dinero) in Chile is actually made of or backed by PLATA REAL (AG).

That would be the smartest thing the Chilean politico's could ever do, but, I'm not holding my breath. I would never expect them to lead that effort but I can see them following somebody else's lead, i.e. when it becomes the "thing to do". Mexico is a candidate for being the first country to attempt to back it's paper currency with silver. (Maybe in a few more years after the Evil Empire on their northern border is too weak to stop them from doing it.)

Hugo Salinas-Price is a strong advocate of silver-backed currency in Mexico. http://www.thedailybell.com/1071/Hugo-Salinas-Price-Silver-Should-Be-Legal-Mexican-Currency.html
http://www.plata.com.mx/mplata/

On June 4, 1963, Executive Order 1110 was signed by President Kennedy directing the US Treasury to issue a new US currency. This new US currency was to be backed by a precious metal—silver, unlike the credit-backed money issued by the Federal Reserve since 1913.

By the stroke of a pen, President Kennedy’s signing of Executive Order 1110 returned the power to issue currency back to the US Treasury thereby ending the fifty year monopoly of private bankers and the Federal Reserve Bank over US currency. Six months later, President John F. Kennedy was shot and killed.
...of course, one can believe what they want about "conspiracies" here...

... in part...
There are several factors when put together signal that the physical silver market could be on the brink of a panicked buying frenzy.
The price of silver closed last Friday at $19.91, its highest close since March 17, 2008. With both the COMEX and LBMA showing problems of having enough silver to make physical deliveries, I anticipate that demand will mount in the next few weeks. There will be rising pressure from two sources. First, a number of owners of “paper silver” contracts will be trying to convert their asset into physical metal. Second, it is highly likely that the number of professional investors, perceiving a rare opportunity to profit from a supply squeeze, will continue to increase their buying efforts.

At some point, the price of silver will rise so high that there will be a major profit-taking and retrenchment. In my judgment, we are nowhere close to that occurring. My crystal ball is too foggy to name a target price. $25 by the end of this month is a definite possibility. $30 silver by the end of 2010 also a reasonable prospect. But these could also turn out to be extremely conservative.

At the minimum, I would not be surprised to see the severe shortages of physical silver (and gold) that developed in late 2008 return by the end of this month. It is still possible to purchase physical silver today, and get it at reasonable premiums.

But MikieO... perhaps to be piggish, vs. bullish...
Is your sensitive snout also deep in the silver trough...