Though silver ended Thursday at $21.70, not far from its Monday closing price of $21.73, US government turmoil pushed the white metal down on Tuesday and Wednesday.
Silver saw little price action on Monday, moving between $21.58 and $21.99, its high for the week. Standard Bank notes in its report for that day that like other precious metals, silver was kept range bound as a result of uncertainty about whether the US government would be able to sort out a plan for how to cut government spending.
Divided over the Affordable Care Act, widely known as Obamacare, the government did not arrive at a solution, and on Tuesday partially shut down for the first time in 17 years. Though silver sunk to $20.77 that morning, by the afternoon it had risen to $21.25, continuing up to hit $21.87 Wednesday morning. Writing for Bloomberg, Glenys Sims suggests that the increase may have been due to increased “demand for a protection of wealth on concern that the impasse may endanger the recovery in the largest economy.”
Though the white metal fell as low as $21.52 on Thursday, as mentioned, it ultimately ended the day at $21.70.
Standard Bank states in its October 1 report that the market is now looking toward October 17, the day that the US Treasury is likely to hit the debt ceiling and be unable to borrow further.
Texas nixes silver sales tax
In other US news, Mineweb reported that Texas removed its sales tax on purchases of gold, silver and platinum bullion and numismatic coins as of October 1. Previously those living in the state had to pay a 6.25-percent tax on precious metals purchases under $1,000.
The aim of the legislation is to put “precious metals on a level playing field with other investments” and give precious metals buyers an incentive to do business with Texas dealers, the publication notes. Texas is the first state to expand a “an existing sales tax exemption for gold and silver.”
Trevali Mining (TSX:TV,OTCQX:TREVF) on Monday provided an update on its Peru-based zinc-lead-silver Santander mine, commenting that commissioning of the processing plant is going well, as is zinc and lead-silver concentrate production. During September, the company was able to increase mill throughput and head grades to the extent that they are now “at the processing plant’s nameplate 2,000-tonne-per-day design capacity.”
The next day, Trevali made another announcement, noting that it has begun shipping concentrate from Santander to the Port of Callao in Lima, Peru. At the moment, the company has about 4,000 tonnes of zinc and 1,000 tonnes of lead-silver concentrates stored in its on-site warehouses, according to its press release.
Wednesday, Hochschild Mining (LSE:HOC) said it plans to acquire the Pallancata and Inmaculada silver mines, both located in Peru, by buying out its minority partner, International Minerals (TSX:IMZ). International Minerals owns 40 percent of both mines, and Hochschild plans to issue between $48 and $96 million worth of shares to fund the acquisition.
Junior company news
Tuesday, Silver Bull Resources (TSX:SVB,NYSEMKT:SVBL) revealed that it has completed a preliminary economic assessment for its Sierra Mojada project, which is located in Coahuila, Mexico. It is expected to have an 18-year mine life, during which time it will mine and process 55.9 million tonnes of ore at a rate of 8,500 tonnes per day, averaging 73.4 grams per tonne silver and 2.79-percent zinc.
Santacruz Silver Mining (TSXV:SCZ) announced Wednesday further results from the 2013 diamond drill program at its Mexico-based San Felipe project. The company states in its press release that highlights include an extension of the strike length at the Las Lamas vein by a further 450 meters and additional 100 meters at depth, as well as higher drill core recoveries (95 to 99 percent), which have resulted in “increased grades when compared to historical resources at the La Ventana and Las Lamas veins.”
Arturo Préstamo Elizondo, president and CEO of Santacruz, commented, “[t]he ongoing drill results from the 2013 campaign at the San Felipe project have continued to exceed our expectations. The Las Lamas vein has proven to be a robust silver-polymetallic vein with high zinc grades in addition to lead and copper credits. The new data will be incorporated into our mine plans, and the impact of these drilling results will increase the strength of this asset.”
Also releasing drill results was Rockhaven Resources (TSXV:RK), which earlier today put out additional results from the exploration program at its Yukon, Canada-based Klaza gold-silver property. The company is particularly pleased with a “new high-grade gold discovery at the Pearl Zone in two widely spaced trenches” that returned 28.2 g/t gold and 359 g/t silver (35.38 g/t gold equivalent) over 1.2 meters and 19.75 g/t gold and 148 g/t silver (22.71 g/t gold equivalent) over 1.25 meters.
Finally, Fortune Minerals (TSX:FT,OTCQX:FTMDF) said today that it has sold its Northwest Territories-based Camsell River silver property to Denendeh Exploration & Mining Company (DEMCo), which is beneficially owned by the 27 First Nations in the territory. In its press release, the company notes that DEMCo has acquired other land holdings in the area and “is taking a regional approach to exploration and development.”
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.