Why silver premiums?

Premiums on PMs such as silver are supposed to cover mining, refining, and minting costs. A good example of how much mining costs can be can be seen in Silver Standard Resources Q4 report. This mining company reported a (Dec) loss of $0.13 per share. The Pirquitas Mine produced 1.1 M ounces during the year. Since December 1, 2009, the date of achievement of commercial production, the mine produced to year-end 545,600 ounces of silver at a cash production cost of $8.99 per silver ounce. Total cash costs, including transportation, treatment, refining, export taxes and royalties, were $16.57 per silver ounce. During the month, the company sold 460,100 ounces of silver at a realized price of $17.49 per ounce. This kind of loss may not be typical of all silver mining companies but just shows many of the costs of getting the shiny stuff to us. Now, dealers have to make a profit also but some of their tack-ons can be outrageous. A good place to find information on the best dealers and mints (besides here) is the FB group “Silverbugs.” It is not public, so you have to ask an admin to allow you access. We are pretty lenient in our restrictions, but we DO NOT allow any marketing schemes. Check us out!