/biz/ - Business & Finance

>>551831

Miners generally have two relevant costs- all-in sustaining costs, the costs of buying the land, getting the equiptment, setting up supply lines, digging a mine, and then bringing up an ounce of gold/silver to the market. For gold, this is around $1200/oz, and for silver, it's around $15/oz currently. This is generally reflective of "price required to open a new mine and mining". Then there's cash cost, which is more or less the marginal costs of moving one ounce of gold/silver from the ground to market, unsurprisingly much lower- for gold it's near $800ish and silver has it under $10 or so.

AISC is NOT a floor. All it means is that it's not profitable to ope up new mines- current production still continues apace and is profitable because it's still well above cash cost. Were a metal's price to hit the cash cost it would be a floor, because then they would simply stop current production until prices rose. But as things stand both gold and silver still have roughly a third to fall before they'd hit anything resembeling a price floor.

Pic related, industrywide silver cost breakdown. You can practically see all the shitty mines that were opened up that require silver to be $50/oz for profit- fortunately they're closed down now.