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Production of Large Silver Mines Through 2030

By: Bryant Blake

-- Posted 21 February, 2007 | |

I have compiled a data table for the world’s 20 largest undeveloped silver mines. The list of these mines was obtained from a corporate presentation by Mines Management The Mines Management list gave the top 20 mines but did not supply relevant data such as reserves, resources, annual production, ore grade, or estimated start up dates. I have attempted to supply this data as shown in the table below:

* Based on a 20 year estimated mine life and estimated 75% recovery. These estimates are by the author of this article and should not be considered completely accurate.

1.) Company estimates silver recovery rate 75.5%. Apex derivative liability as of 9/30/06 is $182, 000,000.

2.) Resource estimate based on 80 gram per ton Ag equiv.

3.) Reserve is for 5 veins contracted by Franklin Mining from COMIBOL. Franklin news letter says “The 2nd richest silver mine in Bolivia (Cerro Rico?) is reported to have a little over 200 million ounces.

4.) Stated recovery rate 72%. 20 year estimated mine life.*

5.) Stated recovery rate 92.3%. 20 year estimated mine life.*

6.) Mine operating life 8.8 years

7.) Mine operating life 11.5 years.

8.) Stated estimated recovery rate 92%. 20 year estimated mine life.*

A brief description of reserves and resources is warranted before we dissect the above table. The table includes both proven and probable ounces in the reserve category. Only proven ounces have been shown to be economically mineable when considering all costs. Resources are shown to be ounces which exploration has shown to exist, however mining of these ounces has not been shown to be economical. Resource ounces in this table include measured, indicated, and inferred ounces. All ounces shown in the table are fine troy ounces.

With the exception of the Prognoz mine, these mines have low to medium silver grades and the reason they are in the top 20 is that they have a large tonnage of ore. The silver grades shown for mines that have both reserves and resources is for the reserves only. The total grades of these projects considering reserves + resources are as follows:

1.) Penasquito 0.63 ounce/ton

2.) Corani 1.58 ounce/ton

3.) Prognoz 26.43 ounce/ton

4.) Pirquitas 4.88 ounce/ton

The total reserves for these 20 mines is 2522.6 million ounces. In 2005 total world mine silver production was 641.6 million ounces. Assuming an over all 80% recovery rate for these 20 mines, their reserves are 3.15 years worth of mine supply. Total reserves plus resources are 5790.5 million ounces which equates to 7.22 years worth of supply. Looking at the grades, I do not think all of the resources of these mines will be economical with out much higher silver prices.

Next I will attempt to determine how this new supply will effect overall silver supply. In order to calculate the annual amount of this supply, I have added the supply to the applicable years where an estimated start date was provided, and have phased in the remaining mines over a 10 year period starting in 2011. I have then added this supply to the supply from the top 20 existing silver mines. For the production of the top 20 existing mines I have estimated an annual production of 200 million ounces with a 10 million ounce per year reduction phased over 20 years. This data is graphed and tabulated below. An additional study in the graph looks at the effect of rising demand and the net annual deficit due to this demand even when considering the new top 20 mine production. The amount of annual demand growth is based on net total silver demand (Fabrication + investment – 70% photographic recycle) which in 1992 was 587.78 million oz and in 2005 was 796.34 million oz, an annual increase of approximately 16 million ounces.


From this graph and table, it is evident that supply can increase at the same rate as demand up until around 2010. After that, production from the existing and new top 20 mines will stagnate while demand continues to go up by 16 million ounces per year. After 2020, production from these large mines will begin to decline and this coupled with rising demand will accelerate the deficit. The only hope for a surplus will be due to rising production by small mines up to 2010. After 2010, I think it will be impossible for small mines to make up the deficiency.

A listing of web site for each of these top 20 undeveloped mines is as follows:

1.) Penasquito, Mexico – Goldcorp

2.) Pascua-Lama - Barrick Gold

3.) San-Cristobal, Bolivia – Apex Silver

4.) Navidad, Argentina – Aquiline Resources/IMA Exploration

5.) Cerro Rico, Bolivia – Corporacion Minera de Bolivia and Franklin Mining

6.) Corani, Peru – Bear Creek Mining

7.) Ocampo, Mexico – Gammon Lake Resources

8.) Montanore, Montana, USA – Mines Management

9.) Veladaro, Argentina – Barrick Gold

10.) Rock Creek, Montana, USA – Revett Minerals

11.) Prognoz, Republic of Sakha, Russia – High River Gold Mines

12.) Hackett River, Nanavut, Canada – Sabina Silver Corporation

13.) Maverick Springs, Nevada, USA – Silver Standard Resources

14.) Pirquitas, Argentina – Silver Standard Resources

15.) San Bartolome, Bolivia – Coeur d’ Alene

16.) Dolores, Mexico – Minefinders Corporation

17.) Palmarejo, Mexico – Palmarejo Silver and Gold Corporation

18.) Candelaria, Nevada, USA – Silver Standard Resources

19.) Waterloo, USA – Pan American Silver

20.) Bowdens, New South Wales, Australia – Silver Standard Resources

I hope this article has been helpful for persons with an interest in the silver market. I am not an investment analyst (I am a structural engineer) and this article may contain errors. Please do your own research before investing in these companies or silver itself. I do own shares of Goldcorp and Sabina Silver. If any readers believe any of this data is incorrect please contact me at and I will attempt to issue corrections if warranted. Some of this data may not be up to date since companies are constantly issuing updates. Regards,

-Bryant Blake, P.E.

Addendum (2/25/07)


I have received several emails in response to this article.  The effect on the article of these responses is that some of the undeveloped mines that I did not have start up dates for actually start sooner than my model anticipated.  These earlier start ups are Sabine Silver estimated at 2010, and Minefinders estimated at mid 2007.  Also having an effect is an email that the Palmajero mine will have a shorter mine life with resulting higher annual production than estimated in this article.  The effect of this information is that the increase in production of large mines for the next 10 to 15 years will be greater, however the drop off after this period will then also be faster.


Following are several of the emails sent to me on this subject including emails from the President of Sterling Mining and from another writer on the silver market, Mr. Douglas Kanarowski.



From Mr. Allen Zebrowski,


Hello Mr. Blake!
I liked your summary of the silver supply situation, and would just like to add the anecdote that there is supposedly the 100M + ounces of silver at Cerro Colorado, near Alamos, Sonora, Mexico (on the southern end of the state).  It is in the Paleoozoic schists overlying the Sinaloa Batholith, and I think it is still under the control of the Bill Gates-funded company (sorry, the name escapes me for the moment).  I'm thinking that it is a Canadian-listed outfit, and if it comes to mind, I'll send you a note asap.  I don't believe there is production there yet. 

Your data is still a fine data sink, thanks!!




Mr. Blake:

Thanks for your recent article on projected silver production.  I believe I can fill in a few gaps in your data.

From a spreadsheet where I collect such information as I learn it – possibly not current – but to the best of my knowledge:

Sabina- Hackett R – opens 2010.

Minefinders– Dolores – opens mid 2007

Since the smallest new mine listed is only 1.24 MM oz/year, note that Sterling’s Sunshine mine, opening Dec ’07, is projected to produce 3.5 MM oz 2008 & 5.5 MM oz 2009.

Also, there are a number of recently opened mines not at full production yet:

Great panther’s Guanajuato doubles from 2.6MM oz to 5.2 MM in 2009, and they have KM66, a large, low-grade open pit, projected to open 2010, producing 4.5 MM Ag equivalent oz (not sure of the Ag# though)

First Majestic’s La Encantada is projected to grow by 3 MM oz in 2008.

Fortuna recently opened Caylloma, projecting 1.5 MM oz in 2007, but last historical # in 2002 was 2.6MM, so its likely they can eventually do 2.6 again.

Impact’s Royal Mines should be at 2MM, once they are fully running at 500tpd (they were at 184 tpd 8/06)

Endeavor (2 MM oz 2006) increases to 3.5 in 2008 & 5 in 2009.

Those are significant #s impacting future production, & there are a number of other near-term producers, where I don’t have production #s handy: Klondike Silver, UC Resources, Minera Andes & Shoshone open in ‘07

Thanks again.  I hope you find the above data useful.



Mark Butler, CFO

Lowry Park Zoological Garden


Hi Bryant,


I appreciate your efforts in adding useful data to the Mine Management table. I though you have drastically understated the production at Palmajero.


The planned production to be 14m oz/a Ag Eq (11m oz Ag the rest is Au) ramping up to 17m oz/a Au Eq later. The initial mine life is 8 years also.


Check Bolnisi's website also (the owner of PJO.V)


Darren Lawson



mr blake,


i recently was provided a copy of your forecats for new production coming on line and noticed the sunshine mine was not listed,


we begin production this december, and we are shooting for at full capacity at 5 million ounces per year ( will not happen overnight though). the sunshine between 1884 and 2001 produced 369 million ounces of silver at around 28 ounces per ton.


ray de motte


sterling mining




Hi Bryant,


I bumped into your excellent article, "Production of Large Silver Mines Through 2030."  It was a very positive and pleasant surprise.  Actually, I though it was one of the best silver articles that has been written in the past couple of years.  Too many articles are just opinions and lack important facts.  Congradulations and good job!! 


I've been interested in silver for over 20 years and have written 4 articles to date.


Going forward, it going to be an interesting challange to predict silver's price.  Your article will help as it demonstrates that, even with new mine production, the deficit will widen quite profoundly.  Actually, I expect "investment demand" to significantly increase in the years to come for multiple reasons.  This will further aggravate the silver deficit that you have graphed.


With what you know about silver, I'm surprised that you don't have more agressive silver investments.  I'm just a private, individual investor ..... but I've really done a lot of homework in selecting a very small handful of silver mining stocks and have been invested in them for several years.  With Goldcorp, you don't get a lot of silver exposure (But they do own a big chunk of Silver Wheaton).  I tend to like the kind of companies that the big fund money will want to buy.  Unfortunately, this would eliminate a company like Sabina..... an otherwise good exploration play.


Anyhow, keep up the good work!!


Douglas Kanarowski

-- Posted 21 February, 2007 | |

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