Coeur d'Alene CEO Sees Gold At $1,500, Silver In Mid-$40s "This Year" As Pan American Silver Reduces Production Forecast

Tyler Durden's picture

That a CEO of a silver miner sees precious metals prices rising, especially on a day like today when silver hit a new 31 year high (and gold is at a record) is not surprising. Especially since that is precisely what happened: "The head of U.S. silver miner Coeur d'Alene Mines
Corp said on Thursday that he "would not be
surprised" if silver prices reached the mid-$40s per ounce and gold
prices rose to $1,500 to $1,600 an ounce this year
." What is, however,  surprising is that another prominent silver miner, Pan American silver, announced during its earning call that "it plans to produce between 23-24 million ounces of silver in 2011, down from 24.3 million ounces in 2010. The company said it expects to produce between 76,000-78,000 ounces of gold in 2011, down from the 89,555 ounces it produced last year." So despite a record price in silver, the company is unable or unwilling to mine more to keep up with demand? Perhaps the peak [blank] crowd should take a long hard look at silver.

From Reuters:

In an exclusive interview at the Reuters Mining and Steel Summit, Coeur Chief Executive Dennis Wheeler said heightened uncertainty in the world due to geopolitical turmoil and natural disasters, has increased demand for gold and silver as investment vehicles, and will continue to push prices higher.

And also from Reuters:

Pan American Silver said its fourth-quarter profit rose 67 percent on higher prices for all metals that it produces, but forecast lower gold and silver production levels next year.

Pan American said it plans to produce between 23-24 million ounces of silver in 2011, down from 24.3 million ounces in 2010. The company said it expects to produce between 76,000-78,000 ounces of gold in 2011, down from the 89,555 ounces it produced last year.

The Vancouver-based silver miner, which operates in Mexico, Peru, Bolivia and Argentina, posted net income of $46.4 million, or 43 cents per share, in the quarter ended Dec. 31.

This compared with $27.8 million, or 31 cents per share, in the fourth quarter of 2009.

Spot silver prices nearly doubled over 2010, rising from $16.86 to $30.86, as investors turned to precious metals as a safe haven from currencies.

h/t Tim

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Turd Ferguson's picture


The Cartel is going to try to hammer on the Globex.

redpill's picture

Roger that, in a holding pattern waiting to BTFD.

unwashedmass's picture

ah, do we need to ask ourselves if this could have anything to do with the options expiry next week, and the bind that JPM finds itself in?

could PAAS be trying to "do a favor for the gods"....

while CDE's management figures they've been fucked with so many times over the years by JPM  that they want a little revenge?

do not underestimate personal motives in this stuff....

and it would be very, very, very interesting to see how many shares of PAAS that JPM owns. .....

very interesting. let's all look that up.....

unwashedmass's picture


well slap me upside the head and paint me my eyes deceive me or does JPM own 1.6Million shares of PAAS......

oooooooo busted!!!!!!!

this is getting beyond ridiculous as these guys manipulate markets, data, and everything else.....

and there is NO accountability. sickening. sickening.

AR15AU's picture

And JPM is probably skimming some of that AG fresh from the mines, meaning that in all likelyhood, PAAS is producing far above their stated target.

OutLookingIn's picture

Bear in mind that Pan American Silver has switched from trading in the US dollar to trading in the Canadian dollar. Joining an ever growing list of global companies that are abandoning the USD, in favour of less "volatile" currencies.

Kaiser Sousa's picture

Turd  -

the shit is fucking obvious...right a 12:30 close n london the metals fall off a cliff....

for what??? because of what??? aint a damn thing change relative to global and domestic macro-economic dept spiral but somehow the Fraud Market stays green and the only 2 forms of real money suddenly halt n a clear march to the sky...

fuck all bankers.......

Cash_is_Trash's picture

Thing is the price dumps and dumps.. never know when it'll correct

bankrupt JPM buy silver's picture

already at $37.20!! haha SHEEEEEESS BAAAACCKKKKK!!!

Thomas's picture

But she is a lot hotter than Jon Nadler.

Bay of Pigs's picture

Yeah, new all time high London PM fix at $1447 and then, WHAM!

This kind of price action shows the desperation the cartel is having these days. All they can manage is a beatdown/retreat. Too many people now know their game plan.  

BTFD if you can time the 2-3 minute low. Lol... 

Ruffcut's picture

Shows this cartel, still has a sizable battle hammer to come down in a heart beat, too.

Lehman and Bear stearns gone.

"too many cooks, spoil the broth, bitchez!"

Bay of Pigs's picture

What is shows is what you can do with regulatory capture and bribes. Madoff looked invincible too at one time. This Ponzi will collapse as well.


themosmitsos's picture

Dude, HOW the fuck are you ALWAYS first, second, third comment? WTF?! [not hostility--amazement, curiosity & alarm]

themosmitsos's picture

Dude, HOW the fuck are you ALWAYS first, second, third comment? WTF?! [not hostility--amazement, curiosity & alarm]

Sophist Economicus's picture

Well, I just got an email from WELL KNOW PM BEAR technical analyst firm to short Gold and Silver around the highs of today - email was time stamped 14:15 EST....Nobody believes in these poor PMs, therefore, we're still good to go for awhile!   Yippee

Threeggg's picture

Look at that slamdown right before metals closes

No one seen it comming   ;)

You would think someone was trying to paint a chart. ?

docj's picture

Yeah, who knew.  Totally news-free scalpling.  Beautiful in it absolute viciousness.

Threeggg's picture

Can they paint an outside reversal for the "Metals have peaked" media fodder.

Faux News Headline @ 1:00PM  = "Have Metals Peaked"  ?

long juan silver's picture

It's not the headline that's humorous it's your viewing choice.

bull-market_3.0's picture

Silly article, this is old news

long juan silver's picture

How dare you challenge the hegemony of PMs on this website! Try instead.  It may be friendlier.

slvrizgold's picture

Bob Moriarty is an absolute douche when it comes to silver.  He is either living in lala land or has an agenda to keep people out of silver.   He is a bombastic arrogant cranky old man.   That said, he does think Israel sucks and the War of (t)Error is a bogus scam based on a pack of lies so he's an ok guy with me.

pragmatic hobo's picture

perhaps demand isn't there?

Cognitive Dissonance's picture

Unlikely based upon other indicators.

However, maybe they don't want to pull it out of the ground now and sell at these prices when they know in 2 or 3 years they can get a whole hell of a lot more fiats for the same metal. With the price going up, they can mine less and still increase income and profits.

Is the bird worth more in the hand, from which it is promptly sold, or more in the bush, where it can be sold tomorrow at a much higher price?

Cash_is_Trash's picture

Cog, this seems to explain the contango.

Cognitive Dissonance's picture

Judging from the Gold and Silver charts, the bird in the hand just shit all over me. :>)

Temporalist's picture

I think todays pullback was just traders securing gains.  No big deal the trend moves on.

outamyeffinway's picture

I agree it could be as simple as that. It's a fixed market but still a market and many sell right before close on the Dow and S&P as well. We can't know for sure.

Peak silver? I think we hit that years ago. The fact that production rose in 2006 is meaningless becuase we don't know what accurate prices were. Peak (blank) is rising cost as supply dwindles. We know supply is dwindling and the cost was suppressed. The realization of the true supplies of silver will shock the world.

Ruffcut's picture

Gee. copuld we have ever of thunk that goldbeast had a down day last week, and they needed to do a quick pump and dump?

Like taking candy from a baby, while the baby mama was going for a smoke.

Oh, and you can rig fut option volitility for more premium with their behavior. The mena issues might have cost them a few bucks to contain, even if the whole thing was planned. But, the little tremor in japan may have changed the mix.

If you are not thinking out of the box, then realize these credos are acting out of it.

Oh regional Indian's picture

If you like the upswing, you should love the down-turn. Only then can you survive the coming swing-o-rama with a heart and head intact.

These guys making statement could be talking a play, sending a message, whatever.

The reality is quite simple. What did Gold and Silver do just before and during the great wars. 


rosiescenario's picture

In a well managed mining operation lower grade ore is used during periods when the price for the metal produced is high. This extends and actually results in an increase in the mines reserves. This is a pretty basic mining practice for any well run operation.


I would expect all the silver and gold miners to be using as much low grade ore as possible right now. Obviously, when you run lower grade ore through your mill you end up with a lower amount of the metal....for example, if your mill can handle 200 tons per day of ore and you feed it ore with a lower net yield of the metal you are producing, you get less of that metal on an annual basis.

Flakmeister's picture

Correct....problem with a lot of Ag miners is that they were breaking even or loosing money at $18....

rosiescenario's picture

....with the very notable exception of Hecla which actually has a negative cost per oz of silver due to the bi-metals produced....


Another miner I own has costs running about $3 / oz for silver, after allowing for their lead, zinc, and copper sales. Since the company has good management, I expect they will be mining more low grade ore this year, thus increasing their reserves, but also increasing their production cost per oz. and decreasing the number of oz produced due to the mill capacity.

Flakmeister's picture

Hecla was not in great shape for a while. One of the very few miners that were making money when Ag was ~$14 was Impact Silver, a company that I have touted here on a number of occasions. I am currently looking at a 16-bagger on the shares I still own.

BTW, I prefer the Hecla preferreds, HL.PRB, not very often you get convertable cumulative preferreds in a PM company. There is plenty of pure equity exposure elsewhere to be had

Flakmeister's picture

And yes, the smart miners manage their ore in such a fashion. By smart I imply the ones that I want to own! 

tmosley's picture

Eh, what do you do?  I ordered at $37.96 today for my regular monthly order.  Need to learn to take my own advice and buy at the end of options/futures expiry.  These rises just have me scared, I guess.

The truth is, I want lower prices.  The lower the spot price, the more impossible it is for these jokers to cover their shorts with physical, and the sooner this charade is over.  If physical silver is not delivered, then it is a default, and the exchange will no longer be used to influence the price of physical.

Threeggg's picture


Next Tuesday is "Roll" day for the March 11th contracts

tmosley's picture

That is what has me scared.

Who knows what will happen in the short run?

long juan silver's picture

Your scared of gold bears that's for sure! Drink the rootin tootin raspberry and watch the metronome tick HAhahahahahehehe

tmosley's picture

Way to be incoherent, Willy the Loser.

Richard Head's picture

What a douche, moron "the bastard" had to change his name.

I Am The Unknown Comic's picture

William you Fucktarded Bastard/You Wish You Had A Long Juan:

It is way too early in the day to be drunk dude.  We all know your trolling job isn't going well, but either sober it up or get into another line of work.

Mark McGoldrick's picture

....That is what has me scared.....


In all seriousness, you've repeatedly said that price doesn't matter.  So why does price matter today, and why are you scared?

By the way, I know you'll think this is antagonistic, but it's not.  For months, I've been trying to learn why price doesn't matter, so I'm just curious when I see a contradiction of sorts.  I'm hoping you may be able to provide some good advice why today is different - that's all.

In virtually everything I buy, price matters quite a bit.  Am I wrong?  


Flakmeister's picture

Nowhere near peak silver yet... but, the number of mines currently operating is peaked for now and new ones take time. This rise in price will bring some formerly marginal properties into play.

Ratio of Au to Ag production is 1:9

Crustal ratio is 1:16

IIRC ~25% of Ag production is basically investment, whereas ~100% of Au is. This implies 1:36 ratio of production going into investment.

Draw your own conclusions....

outamyeffinway's picture

Silver has been mined for 6,000+ years. The USGS tells us that at CURRENT rates of production and use (not including new technological demand) silver will no longer be able to be economically mined in 20 years. If the world uses silver at HALF the rate as the US does it will not be available after 9 years. How in the world can you claim we are nowhere near peak?

Perhaps in the life of a nat!!!