Silver

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Silver price: 12 months

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Silver price:15 years

Links to silver supply and demand

• GFMS-Precious Metals Research & Consultancy
• The Silver Institute
• iShares Silver Trust (ETF) [AMEX:SLV]
  

The World Silver Survey 2007, released on May 24, 2007, by the Silver Institute, forecasts that the current fundamental/supply demand picture for silver is "at least supportive of prices well into double-digits," in the absence of a major externally-driven setback to industrial demand. The authors of the survey - London-based metals consultant GFMS - suggested that "for silver to break out to the upside or downside would therefore seem to require intervention from investors." A downside could occur if a slide in global GDP growth prompted investors to liquidate their positions.
Investment and the launch of a silver exchange-traded fund (ETF) were the primary drivers of the silver price in 2006, which rose 58% during the year. Global mine production rose just 0,1% in 2006 to 646,1-million oz (20,095 t), as growth in Peru, China, Chile and Mexico was countered by a dramatic fall in Australian output.
GFMS expected, in November, 2007, that mine production is to increase by 23 million oz (3.6%) in 2007 with growth being driven by higher silver production from La Coipa in Chile, initial output from San Cristobal in Bolivia, a rebound at Cannington in Australia and higher production in Mexico. The outlook for 2008 is a 7% increase in international mine production, mostly coming from a full year's output in San Cristobal, initial production at Coeur d'Alene's San Bartolome silver mine in Bolivia, and start-ups at Goldcorp's Penasquito project and the Delores project, both in Mexico. A price range of $13.20 to $16.50/oz over the next 12 months has been forecast by the consultancy, based on investment demand.

Major silver mining companies

• Coeur d'Alene Mines Corporation [NYSE:CDE] announced in May 2007 the takeover of Australian headquartered Bolnisi Gold NL and Palmarejo Silver and Gold of Canada, to form what Coeur described would be the world's leading primary silver producer. The deal is worth $1.1 billion. Coeur's big target in the merger deal is Bolnisi and Palmarejo's Palmarejo project in Mexico which is scheduled to start producing some 12 million ounces of silver a year and 110,000 ounces of gold with production possibly commencing in early 2008. It is considered that when in production it will be one of the largest, single silver mines in the world with the potential of becoming the lowest cost silver producer. Output from Palmarejo would nearly double Coeur's production levels by 2009 when the company is expected to produce around 32 million ounces of silver and 290,000 ounces of gold. Overall, the company would then possess a mineral resource base of over 364 million oz of measured and indicated silver mineral resources (inclusive of silver mineral reserves) and 96,6 million oz of inferred silver mineral resources as well as 3.4 million ounces of measured and indicated gold mineral resources and 0,95 million ounces of gold inferred mineral resources.
  

• Peñoles [PE&OLES.MX] mines in Mexico and claims it operates the world’s richest underground silver mine (Fresnillo), the richest underground gold mine (La Ciénega), the largest open-cut gold mine (La Herradura) and the largest under ground zinc mine (Francisco I. Madero) in Mexico.

• Pan American Silver Corporation (Canadian), founded in 1994, expects its silver production to grow to 25 million oz per year by 2009. Pan American achieved record production of 17.1 million oz in 2007. In 2002, the Company owned and operated four silver producing assets. By the end of 2006, it had grown its portfolio to seven operating mines, with an eighth under construction. The company mines in Argentina, Bolivia, Chile and Peru. Indicated and measured reserves in 2006 amounted to 81,433 million oz