Excitement about the gold price has overshadowed the rise of silver, which broke through the US$8.00/oz barrier in November 2005, and traded as high as US$9.25 on Dec. 12. As gold drops back closer to the US$500/oz mark, silver is maintaining its price strength around US$8.50/oz.
In its silver outlook report released last September, RBC CAPITAL MARKETS forecast an average silver price of US$7.25/oz for 2006. The long-term forecast is for US$7.00/oz based on increasing industrial, jewellery and investment demands. (The author Michael D. Curran may be contacted at 416-842-3770 or [email protected]
Readers with long memories will recall that the Hunt Brothers (Nelson Bunker and William Herbert) attempted to corner the world silver market beginning in 1973 when silver sold for US$1.95/oz. Their hoarding artificially pushed the silver price up to US$54.00/oz six years later. While they were monopolizing the silver trade, they financed development of the Prairie Creek deposit in the Mackenzie Mountains of the Northwest Territories.
But when the silver price collapsed, falling back to US$10.80 by late March 1980, they abandoned the mine project and turned their attention to their legal problems.
In May 1982 the surface facilities at Prairie Creek were 90-95% complete when the owner went bankrupt. The project was tied up in litigation until 1990. It is now 100% owned by CANADIAN ZINC CORP. (CanZinco). With today's silver price, the mine is again being readied for production. The 1,000-tonnes/day mill is 90% complete; there is a winter road, airstrip, office, laboratory, warehouse and maintenance shops. The equipment fleet also survives. Three levels of underground workings are developed on the vein with the mill level being the lowest. CanZinco is working on studies and permitting for the project.
The Prairie Creek deposit contains a "resource base" of 11.8 million tonnes at 12.5% Zn, 10.1% Pb, 0.4% Cu and 161 g/t Ag (calculated in 1998). Maps, photos and drawings of the Prairie Creek project can be viewed at www.CanadianZinc.com.