Silver Miners Holding Back Production
First Majestic, Mexico’s largest silver mining company, recently announced that due to low silver prices, it would hold back some of its silver production.
10 oz. Silver Bars Near Spot from BGASC.com
On October 14, 2014, First Majestic announced that it had produced 3.5 million ounce of silver in the third quarter and that it was postponing the sale of 934,000 ounce of silver inventory.
Later in a widely circulated You Tube interview, First Majestic CEO Keith Neumeyer also called for other silver miners to band together and hold back production recommending that a to be formed cartel of silver miners should “pick a month in 2015” during which the silver miners would put out a collective press release announcing that they were holding back silver production for thirty days.
The price of silver has long been suspected of price manipulation by the bullion banks. The announcement by First Majestic that they were holding back some of their silver mining production and the call for a silver mining cartel was widely hailed among long suffering silver stackers.
Headlines blurted Silver Miner Takes on Bankster Cartel and First Majestic’s Stockpiling a Sign Silver Miners are Taking Control.
Silver Miner Opposition to Cartel Proves Short Lived – For Now
On November 12, 2014, First Majestic reported its disappointing third quarter earnings. In their earnings release they noted:
Subsequent to quarter end, the Company sold all 934,000 ounces of silver that it held over from the third quarter for an average price of $17.29 per ounce increasing the cash balance by $16.1 million.
First Majestic’s decision to sell its held back production was not unexpected as they had noted in their October 14th announcement:
This suspension of sales will result in lower revenues and earnings for the third quarter, however, it is likely that these inventories of unsold ounces will instead be sold in the fourth quarter.
Other Silver Miners Supportive of First Majestic
Silver Investing News polled other silver miners and found them generally supportive of First Majestic’s call for holding back silver production in light of silver prices that seem not to be driven by supply and demand but rather by manipulation.
First Majestic’s holding back of silver production for a short time may be the first salvo in a brewing battle between a to be formed silver mining cartel and the bullion banks.