I have used the Silver Institute as a reference for a lot of my work. It’s the best PUBLIC information out there, and I had figured these figures were rather close. Upon further review of the most recent report I saw, I am now seriously questioning the legitimacy of these numbers based on a single paragraph they wrote.

To those not following extremely closely to the supply/demand of this market, it may have gone unnoticed. I have read over these reports and took some deep dives and there’s one of two explanations for this:

  • They have no idea what a primary silver miner is
  • They are lying

Let’s take a look at the entry.

What struck me as off here was PRIMARY silver miners are going to help global silver supply rise by 7% to 1,092 oz. Further down, they talked about recycling gaining 3%. Each year when prices are higher, recycling is around 200m oz. So let’s say that 3% translated to 6m oz. You can see mine supply was 848 projected for 2021.

What they are suggesting is that the TOTAL supply from 1056 is going up 7%, fueled mostly by primary mining. That is 1056 * .07 = 74m oz increase. Assuming 6m of that is recycling, that says that PRIMARY silver miners will increase silver supply by 66m oz.

OK. Let’s take a look at the LARGEST silver producers from 2020, and figure out which one of them is a primary. If you check this page, it makes an attempt to list the largest 10 silver producers in the world.

Now – this is not Newsweek, nor is it the Wall Street Journal. So as a source, it’s sketchy – but it is a START. In there, they have Fresnillo as the largest at 58m. That is a primary silver company. But, the rest on the list you must scrutinize as to whether they are PRIMARY silver producers or other metals producers that happen to also produce silver. Details matter. Here is their list.
10. Southern Copper – 17.3m oz
9. Hindustan Zinc – 19.6m oz
8. Hochschild – 19.7m oz
7. Goldcorp – 24.5m oz
6. Pan American – 24.8m oz
5. Polymetal International – 25.3
4. Cia de Minas Buenaventura – 26.2m oz
3. KGHM Polska – 33.9m oz
2. Glencore Plc – 34.9 (silver declined by 10% YoY)
1. Fresnillo – 58.1m oz

Most of you reading this think First Majestic is missing. It’s not. They report SEO, or Silver Equivalent Ounces (or AqEq)- and this number is usually 24m SEOs or so, and this is growing. Mostly it’s growing due to adding gold to their portfolio to stay in business, as the gold credits make the SEOs soar. Without the gold credits, I believe they are around 15m Ag Oz.

I also noticed Newmont not up there, as my math a few years ago had them around 54m silver ounces based on their revenues. Goldcorp is listed here, so that may be the Barrick silver.

Of this entire list, who is silver primary producers? You can list these with confidence: Fresnillo and Hochschild. That is about 78m oz. The problem here is Pan American is NOT a primary silver producer, as it produces around 26% silver now. Fortuna produces around 7m oz, but they are also only 27% silver. Both of these companies now are junior to mid tier gold producers (PAAS has less gold as a percent than FSM) and as such, should not be identified as PRIMARY silver miners. First Majestic added Jerritt Canyon and with this, may be closer to a 50/50 gold to silver producer, but they are still claiming 60% for now. Maybe we can split the difference at 55/45 silver to gold.

So for the sake of argument here, I will add FSM and PASS, as well as AG to this mix. Here’s where we stand with PRIMARY silver producers. I believe endeavor is around 4m, and many others are smaller. I love Aya, but that is also small.

In 2022 – you will have MAG ramping up. However, that was delayed 6 months due to power issues. You could see they produced 1.6m oz in 2021 as they cut of the Juanacipio project – as Fresnillo is their big brother there and this mine may not be up to 90% until Q4 of 2022. That being said, how much can they produce in 2022?

So, even if we add two producers who are NOT primary silver producers, we get 133m. We can add in the silvercorps and the like, and to be fair, let’s take this total of PRIMARY producers to 150m to include the Impact Silvers of the world.

This is generously padding by about 32m oz given PAAS and FSM are not primary producers.

The article states that the supply of 7% increase will DRIVEN from PRIMARY silver producers. Meaning, it should be a LARGE percentage of the 7% increase in production. As we all know here, most silver is a byproduct of other producers – like Newmont, Barrick, the zinc and copper companies, etc. Those companies are not “dialing up” silver production – and in most cases, you will see silver declines year in and year out due to lower ore grades of silver being found.

In 1971, you could be a gold miner and make a profit on $35 gold? Today, FSM has a cost of about $1188 per oz for gold to produce. Meaning – most “easy” gold was found and you have to dig deeper to recover lower grades of ore. I think pit mining to be profitable needs to be about .5gpt. That’s $30 of value to run a ton of ore. My point with this is that silver is at that inflection point where rapidly we are running out of $20 silver. Like, rapidly.

This report would have you believe that the silver primary producers are able to increase their production by 66m oz. Remember, the economy is going sideways and wanting to roll over, so you may have less base metals produced in 2022. This will no doubt impact the overall production of silver to the downside. If the primaries account for 150m oz, that means the base metal/gold producers account for 700m oz of silver. Doing the math – 150/850 = about 17.6% of all silver production is primary silver producers.

IF the article is to be believed, the group that produced 150m oz in 2021 are to produce 66m oz MORE in 2022. That means they go from 150m to 216m oz? So you are telling me now that each primary silver miner will be producing 44% more silver?

Yeah. No.

When I read this article, my mind ballparked the rough numbers and called bullshit.

The coup de grace in the article was this snippet…

To me, this was the part of the article that smelled the most like bullshit, which has led me to conclude this article is put out to assure people silver is there. Nothing to be afraid of.

See the source image

I say this because another article I was writing about was Ted Butler’s 800m oz BoA short. While I could NOT confirm Ted’s 800m oz assertion based on the evidence he provided (he merely pointed to a derivatives position, extrapolated for all silver, and did not go the next step to find short selling), I did go a few steps further and DID find evidence of some hinky sales numbers with EFPs going on to the tune of 130m oz over last summer, a 25m sale of BoA silver in December on the COMEX, and a few other things that supported roughly 275m oz in POSSIBLE short selling. IF there was a large pile leased, it is ALSO possible this large pile is a relief valve of sorts to provide shortcomings for production lines off market. For example, last week SLV added 52m oz, but no one on the OTC can seem to source any metals of size – according to Andrew Maguire.

This also doesn’t mean the BoA metal isn’t hedged long – so all of you out there thinking a move up in $1 will destroy BoA, it’s just not the case. I did see evidence that some of this was hedged long on the COMEX, but I can’t tell you what was hedged long on the OTC markets.

I had also written about how I believe solar and EV demand is going to send this to the stratosphere. The article here also seemed to support my hypothesis.

In addition, you have 180,000 of my closest friends on WallStreetSilver who are buying silver bullion like crazy as well as investing into ETFs like PSLV and buying silver through things like Kinesis.

They then suggest the price of silver is forecast to be $24.80. But – they also say there will be a 20m oz deficit.

But remember the last sentence there – “modest”. If you actually DID have a 300-400m oz deficit and did NOT have a BoA selling short, the question then is – would this deficit be modest? And, would the price be $24.80?


I believe that this “short pile” is being drawn down, and when this is exhausted, we fucking moon. Perhaps this is not rational to say. Perhaps crude. Perhaps unfounded. But all of us have witnessed the invisible hand of the markets. We are at RECORD inflation for 40 years and the metals SELL OFF? How? Who the hell is selling physical gold and silver into this?

The physical selling APPEARS to be a bank selling short. HOWEVER – IF this was a leasing situation where they had a buyout, selling short is a means of selling down a pile over time without crashing the market overnight. My HYPOTHESIS was a JPM got in deep shit over this. And, Bart Chilton had mentioned in his interviews with Chris Marcus at Arcadia Economics that the CFTC had tried to get them to get out of this massive position, to no success.

What this APPEARS LIKE – is that a major bank needed to dissolve their massive metals position as a penalty. They could NOT sell it all at once without crashing the market. AND, to allow them to continue to do it over time could lead to massive windfall profits if silver mooned. To penalize a bank like this, it would almost seem like they would be forced to lease this to other banks. Then, these other banks over time can sell these positions into the markets, and perhaps hedge long on paper. At times they can re-stock the metals, at other times you are pocketing the spread as a win.

Assume the price of buy back on the lease is $22. You sell short at $23. When you sell short, price goes down to $22.50, you can hedge long, drive up the price, and sell more. You settle for physical on the sell side, you settle in cash on the buy side. At the end of the leases, they simply buy out the metals.

All of the above here is SPECULATION, as to how this can be working behind the scenes. SLV just cannot snap their fingers and find 52m oz. BUT – if this JPM pile is SITTING at the LBMA, leased to BoA to sell – one of those customers could be….Blackrock as the SLV owner – where the custodian is JPM. So this massive sale could be boosting SLV stocks ahead of what they may see as a bloodbath in silver demand coming.

What this report sort of did here was have me lose a little faith in the Silver Institute’s credibility. They either have no idea who a silver primary miner is, OR lied about it. Either way shows they aren’t tracking their supplies very well. They talk about industrial strength with PV and increased ETP/coin buying. But – nowhere in here does it show a giant hoard a bank has selling extra float into this market to keep it from going parabolic.

I ask – in what columns are short selling listed in?