The CPM Silver Yearbook, 2007

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The CPM Silver Yearbook, 2007
CPM Group
John Wiley & Sons, Inc.
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The CPM Silver Yearbook, 2007
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The CPM Silver Yearbook, 2007
CPM Group
John Wiley & Sons, Inc.
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Silver Yearbook 2007
CPM Group
Copyright © 2007 by CPM Group. All rights reserved
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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ISBN-13: 978-0-470-04952-5
ISBN-13: 978-0-470-16817-2
Printed in the United States of America
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CPM Group
Silver Yearbook 2007
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CPM Group
Silver Yearbook 2007
CPM Group’s Silver Yearbook 2007
May 2007
Volume 22, Number 1
CPM Group
30 Broad Street
37th Floor
New York, NY 10004
USA
Telephone:
Telefax:
E-mail:
Website:
212-785-8320
212-785-8325
info@cpmgroup.com
www.cpmgroup.com
Jeffrey M. Christian, Managing Director
Doug Sherrod, Director, Investment Banking
Alec Kushnir, Investment Banking
Adam J. Crown, Executive Vice President, Sales & Marketing
Nichola Eliovits, Sales & Marketing
Carlos Sanchez, Associate Director, Research
Catherine Virga, Senior Research Analyst
Rohit Savant, Senior Research Analyst
Max Pyziur, Senior Research Analyst
Griffin McGee, Research Analyst
Rasila Solanki, Research Analyst
Lennys Ramos, Administrator
Madhusudan Daga, Consultant
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CPM Group
Silver Yearbook 2007
CPM Group provides a range of research and consulting services related to precious metals
and commodities. These range from research studies on individual markets and market segments to materials management services. In addition to publishing precious metals and commodities research, CPM Group produces special reports. In 2005 CPM Group produced special reports on topics which have piqued investor interests, such as Uranium and Fuel Cells.
The core of CPM Group's product is its consulting services. These include specific projects
related to the special needs of individual producers, refiners, fabricators, institutional
investors, financial institutions, governments, central banks, and others. CPM Group provides
advisory services related to hedging production and raw materials requirements, and manages
positions for producers, consumers, and institutional investors. CPM Group's financial engineering includes impartial advice, structuring, placements, and management of hedging and
investment positions.
CPM Group provides investment banking advisory programs for commodities-oriented corporations, and metals, materials, and asset management services for producers, consumers and
institutional investors.
Annual Research Reports
The CPM Gold Yearbook (published by John Wiley & Sons)
The CPM Silver Yearbook (published by John Wiley & Sons)
The CPM Platinum Yearbook (published by John Wiley & Sons)
The CPM Gold Long-Term Outlook: Ten Year Projections
The CPM Silver Long-Term Outlook: Ten Year Projections
The CPM Platinum Group Metals Long-Term Outlook: Ten Year Projections
Monthly Research Reports
Precious Metals Advisory
Base Metals Advisory
Softs Commodities Advisory
Energy Advisory
Weekly Research Reports
Market Views
CPM Soft Commodities News
Specialized Reports
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CPM Group
Silver Yearbook 2007
Preface
Welcome to the 2007 edition of CPM Group's Silver Yearbook 2007. Last year and this
year represent major turning points in the silver market, years in which a tectonic shift in
the silver investment demand occurs the likes of which are very rare. Specifically,
investors shifted from being net sellers of silver into the market from 1990 through 2005,
to being net buyers of silver in 2006. The last time this happened was 1979, a year that
witnessed the silver price rise from $5.92 to $34.45 by the end of the year, on its way to
$48.70 in January 1980. That is the power of net investor silver buying in this market.
This is the second year during with CPM Group has produced the Silver Yearbook and
its companion volumes on gold and platinum group metals in collaboration with John
Wiley & Sons, publishers. The partnership has worked extremely well, broadening the distribution of these reports at a time when the silver market is expanding, and more producers, users, refiners, investors, and others are seeking accurate statistics and analysis on this
market.
CPM Group wishes to thank greatly the sponsors of this year's Silver Yearbook. Without
their efforts, collecting and analyzing the statistics that represent the trends in silver market supply and demand would be that much more difficult. This year there are twenty nine
sponsors. They are Apex Silver Mines Ltd., Apogee Minerals Ltd., Avino Silver & Gold
Mines Ltd., Bear Creek Mining Corporation, Commodities Now, Endeavour Silver Corp.,
Excellon Resources Inc., First Majestic Silver Corp., Fortuna Silver Mines Inc., Great
Panther Resources Ltd., Hecla Mining Company, Hochschild Mining plc, Macmin Silver
Ltd., Minera Andes Incorporated, Mines Management, Inc., Multi Commodity Exchange
of India, Noah Financial Innovation (Pty) Ltd., Orko Silver Corp., Sabina Silver
Corporation, Scorpio Mining Corporation, Silver Standard Resources Inc., Silver Users
Association, Silver Wheaton, Silvercorp Metals Inc., Silverstone Resources Corp., South
American Silver Corp., Sterling Mining Company, The Institute of Scrap Recycling
Industries, Inc., and The Prospector Exploration & Investment Newspaper.
In addition to these companies, hundreds of companies provide information, statistics, and
insights that allow us to compile the statistical portrait and analysis of the silver market
presented here. We must humbly thank each and every one of these companies.
Last year and this year represent key turning points in the silver market. The provision of
reliable, accurate, and unbiased statistics and analysis that captures the true mechanics of
silver's fundamental trends is all the more critical at such junctures. We hope you find the
Silver Yearbook 2007 useful, valuable, and informative.
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CPM Group
Silver Yearbook 2007
The Following Organizations Assisted in the Preparation of the Silver Yearbook
Apex Silver Mines Ltd.
Apex Silver Mines Limited is a mining development and exploration company. Its flagship
asset is the 65%-owned San Cristobal silver-zinc-lead project located in southwestern Bolivia
(35% is owned by Sumitomo Corporation). San Cristobal, the world's largest development in
all three metals, should be in production midyear of 2007 with the payable metal output averaging approximately 16.9 million ounces of silver, 225,000 tonnes of zinc and 82,000 tonnes
of lead per year in the first five years of operation. San Cristobal is expected to have a 16-year
life based on the existing proven and probable reserves. In addition to its interest in San
Cristobal, Apex Silver holds an extensive portfolio of highly prospective exploration properties located primarily in the traditional precious metals-producing regions of Argentina, Peru,
Mexico and Bolivia. Apex Silver is well financed. The shares of Apex Silver trade on the
American Stock Exchange under the symbol SIL.
Apogee Minerals Ltd.
Apogee Minerals Ltd. is a newly-created Canadian mining and exploration company developing advanced Silver-Zinc and has several projects in South America. Apogee's experienced
management team is focused on projects that offer significant exploration upside along with
the potential to be rapidly developed into producing assets. Projects that fit this profile will typically have a history of past production and/or a significant amount of quality exploration data
from previous work. Apogee can then add value by investing capital, upgrading mining methods, and providing expertise where needed. All of the company's projects fit this "advanced
exploration and development" model:
La Solucion: The La Solucion Mine has been producing for the past 14 years at the rate of
40,000 tonnes per year. Production grades have averaged 20 ounces per tonne silver equivalent
(150 g/t Silver, 7% Zinc, and 3% Lead).
Pulacayo-Paca: A Joint Venture with Apex Silver of Denver, Colorado (American Stock
Exchange symbol: SIL) to develop the Pulacayo Mine, the second-largest silver mine in the
history of Bolivia with over 600 million ounces of past production, and the Paca project, a large
dacitic dome with open-pit potential.
Buena Vista: The Buena Vista project is located in the historic and prolific Potosi Department
in southwest Bolivia. Mining at Buena Vista dates back to the 16th century. The project hosts
a known mineralization in the form of a vein system of that extends across the project for at
least 1.5 kilometers. The structure is visible on surface, is near-vertical, ranges from 1 meter to
30 meters in width, and has been tested to a depth of 150 meters.
Candelaria at Santa Isabel: The mines at Candelaria at Santa Isabel have been exploited historically for silver since the middle of the 16th Century. The geological environment is similar
to that of the San Cristobal Deposit, owned by Apex Silver, which is a better-known Bolivian
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