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<p>[QUOTE="EdThelorax, post: 3373600, member: 99854"]There are many cons as with any stock. Management issues, governmental regulations in the countries that they operate mines, mine life, mining accidents,environmental concerns, wage and energy cost and extended low metal prices are the ones that come to mid first. The majority of silver is a bi-product of either gold or base metal mining. This works two ways. When silver prices rise, they supply is fairly inelastic. They don't mine more copper,lead or zinc to get extra silver. When base metals are low, it hurts many miners regardless of silver prices. </p><p><br /></p><p>With PM prices being low for the past 6 years, it has led to low margins for many miners. If the cost of mining one ounce of gold is $1100/ oz. then they only make $150/oz. with gold at $1250. If gold goes to $1400, a 15% increase, their profit would be $300/oz. or double. There are many silver miners with cost at or above the price of silver. They can go from a loss to a profit with small moves in silver. A decent move can mean huge change in profitability to a company that is a primary silver producer. There aren't many of them though. Pan American comes to mind. </p><p><br /></p><p>There is risk with any stock. Once again, diversification is a good way to protect against a company having problems. Wheaton Precious Metals is a streamer, they buy silver from many other companies before it's mined, for locked in lower prices. This gives diversification and leverage to thee upside, without many of the cons of mining. A smaller miner will have more risks, but will yield higher share price appreciation during a PM rally.[/QUOTE]</p><p><br /></p>
[QUOTE="EdThelorax, post: 3373600, member: 99854"]There are many cons as with any stock. Management issues, governmental regulations in the countries that they operate mines, mine life, mining accidents,environmental concerns, wage and energy cost and extended low metal prices are the ones that come to mid first. The majority of silver is a bi-product of either gold or base metal mining. This works two ways. When silver prices rise, they supply is fairly inelastic. They don't mine more copper,lead or zinc to get extra silver. When base metals are low, it hurts many miners regardless of silver prices. With PM prices being low for the past 6 years, it has led to low margins for many miners. If the cost of mining one ounce of gold is $1100/ oz. then they only make $150/oz. with gold at $1250. If gold goes to $1400, a 15% increase, their profit would be $300/oz. or double. There are many silver miners with cost at or above the price of silver. They can go from a loss to a profit with small moves in silver. A decent move can mean huge change in profitability to a company that is a primary silver producer. There aren't many of them though. Pan American comes to mind. There is risk with any stock. Once again, diversification is a good way to protect against a company having problems. Wheaton Precious Metals is a streamer, they buy silver from many other companies before it's mined, for locked in lower prices. This gives diversification and leverage to thee upside, without many of the cons of mining. A smaller miner will have more risks, but will yield higher share price appreciation during a PM rally.[/QUOTE]
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