Why is it more expensive to mine gold than silver?

Discussion in 'Economics' started by peilthetraveler, May 20, 2010.

  1. Gold exists at .004 parts per million. Silver at .07 parts per million. This is a 17.5 to 1 ratio.

    It costs $400 to mine/process every oz of gold. For silver it costs about between $3-4.50 per oz.

    Hmmm....$4.50 x 17.5 = $78.85
    and $400/17.5 = $22.85


    So why doesnt it cost $78.85 per oz to mine/process gold OR why doesnt it cost $22.85 to mine/process silver?

    Is there really that much difference in smashing up rocks, dropping in some chemicals, and then processing it out into bars?

    I can see there being some slight differences, but costing over $300 more per oz to process gold in the same ratio of silver being 17.5 to 1? Can anyone shed any light on this?
     
  2. i live near an old gold mine that was closed a few years ago because it became unprofitable. they were tunneling 5000 feet down at the end. its expensive to dig that deep through solid rock.

    http://en.wikipedia.org/wiki/Homestake_Mine_(South_Dakota)
     
  3. I think the rock is harder. also they spend more time looking for gold.