Page 26 - Bullion World Issue 6 October 2021

Bullion World | Issue 06 | October 2021

Silver Bullion

Pricing

International suppliers Nominated agencies Buyer

LBMA / London spot price + International supplier price + Pricing is based on MCX nearest
premium or discount. Insurance + secured logistics + 1 silver futures price – time value
In 2019, median mark-up in cent/ troy ounce margin. Roughly + premium (fluctuates with
price over London spot price nominated agencies make about location, time of the year, quantity
was $1.2 /kg basis the invoice Rs. 25 to Rs. 30 per kg demanded). During dull season
date.(basis 261 transaction or when price increase steeply
records). Range (-$50/kg and physical market goes into discount
+$50/kg) due to surge in scrap flows.

From where do bullion banks
source silver?
International bullion banks source metal directly
from mines / refiners against their project
fundings. Usually, bullion banks fund large
projects sponsored by a listed entity in safe
territories. Silver pricing is generally usually fixed
and is roughly based on all-in costs plus margin
basis. In 2019, the total cash cost is around USD
5.16 per troy ounce and all-in sustainable cost
is around USD 11.47 per troy ounce for primary
silver producer.

In case of silver, it is also seen that many mines
where silver is a secondary produce, the project
owners opt for ‘streaming’ (selling silver forward
at a fixed price) to reduce the overall debt and
improve project economics.

Amrapali- Gujarat, S B Ornaments and

M D Overseas each do about 1000 to
1500 tons of silver dealing per annum.

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