Good post Vidi - I agree that the Ball Mill won't be the final ramp up issuethe mine faces but it certainly will have a big impact on the production figures.
As to the inflation/deflation question - most silver is consumed industrially - and the demand for silver is growing - I have googled "silver industrial demand" and there aren't really any essays out there disputing this fact. After the initial drop off in silver consumption with the death of black and white film in the 90s and early 00s there has been significant take up in demand from solar panel fabrication - which is now the biggest consumer. China is manufacturing Solar PV like nobodies business and we are all benefitting from this - installing solar panels on a new property is a no brainer now in terms of capital cost. Demand for phones, PCs and cars isn't going to slack off any time soon. Whether they are powered by a small petrol engine, rechargable batteries or hydrogen there is always going to be a need for silver - even more so as manufacturers start integrating tablet like devices into them - even basic Fiestas and i30s are carrying touch screen controls.
The sell down in Silver on the COMEX was a concentrated attack on the silver price - and once the ball got rolling the automated trades kept it rolling. It was sheer panic. There isn't even remotely enough silver to cover the shorts that were written. July is going to be an interesting month when these contracts are due.
I can understand a fabrication premium for coins and bars but not the 30-40% we are seeing now, unless the fabricators are having to pay a premium for the raw material to land on their doorstep in prompt fashion.
From what I understand of the supply/demand equation for silver, it's very finely balanced - if one demand component increases even marginally it will suck up any overhang very quickly.
CCU Price at posting:
13.0¢ Sentiment: Buy Disclosure: Held
