Something's Gotta Give: Silver Price vs. Silver Cost of Production

In a data-driven article from SRSrocco comes the realization that most primary silver producers are not only losing money but that their total costs of production will keep them from earning a profit at current silver prices. In fact, only two primary silver companies had production costs that were below the price of silver last quarter:

This has obvious implications for the sustainability of this tiny industry. How long can a company continue to produce metal at a loss before it is forced to curtail production?

New supply for silver is already falling, as Jeff Clark has pointed out, and current silver prices will continue to put pressure on the ability of the industry to keep up. To quote SRSrocco:

Lastly, even though the primary silver miners are currently struggling, I believe it’s only a temporary situation.  As I have stated over the past year, when the markets crack, the precious metals and the miners will be the GO-TO ASSETS. Unfortunately, most precious metals investors have given up on the metals and the miners, but this is precisely the time to start getting interested.  Only successful investors buy when the price and sentiment are at an extreme low.

This also supports that idea that the lows for silver are in; the industry can't function at a loss for a prolonged period of time without a rise in the silver price, and industrial demand is a steady force. See the full article here.