Insight

End of the silver lining - Are zinc mines at risk?

19 July 2013

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19 July 2013

End of the silver lining - Are zinc mines at risk?

Report summary

In recent years revenue from by-products, particularly silver and gold, has transformed the economics of many zinc mines and projects, and in some cases supported production at some marginal operations. In 2012, silver contributed 23% of net revenue at zinc mines. However, in June 2013 the silver price fell to US$18.6/oz, 40% below the 2012 average. The weakening of the silver price led to many producers and investors to review the economics of their mining operations. Yukon Gold for...

Executive summary
Introduction
Margins are squeezed
High silver mines under pressure
900kt vulnerable to closure

Tables and charts

This report includes 7 images and tables including:

Zinc mine net revenue US$ billion 2000-2012
Monthly silver prices January 2004 to July 2013
Price sensitivity assumptions

Zinc mining margin curve for 2012 vs scenario 1 and scenario 2
Zinc mine cost curve, 2012, highlighting mines with silver net revenue > 25%
Zinc mine cost curve, 2013 Scenario 2, highlighting mines with silver net revenue > 25%
Total cash flow generated in 2012 vs scenario 1 and scenario 2