By-Product Credits Can Push a Silver Mine's Cash Cost Below Zero
By-Product Credits Can Push a Silver Mine's Cash Cost Below Zero |
| [17-September-2026] |
Equity Insider News Commentary VANCOUVER, BC, Sept. 17, 2026 /PRNewswire/ -- Silver is running its sixth consecutive annual structural deficit, and the price has followed. Spot silver traded around $65 an ounce through mid-August and was assessed at $66.41 on August 31. That alone would be the story in most years. The more interesting arithmetic is happening one layer down, in the polymetallic deposits where silver arrives alongside zinc, lead and copper. When base metal by-product credits are subtracted from total costs, the all-in sustaining cost of the silver itself can go negative, which is to say the base metals pay for the mine and the silver is margin. That is not a pricing curiosity. It changes which deposits are financeable and in what order. Active Companies from around the markets with current developments this week include: Honey Badger Silver Inc. (TSXV: TUF) (OTCQB: HBEIF) (FSE: 1QA) (Tradegate: 1QA), Hecla Mining Company (NYSE: HL), Pan American Silver Corp. (NYSE: PAAS), Vizsla Silver Corp. (NYSE American: VZLA), and Coeur Mining, Inc. (NYSE: CDE).
The deficit itself is well documented and has been persistent rather than cyclical. Industrial demand, led by solar and electronics, has grown faster than mine supply for six straight years, and silver is mostly produced as a by-product of other metals rather than from primary silver mines, which means the supply response to a higher silver price is weaker than in most commodities. A copper miner does not open a pit because silver went up. That structure is exactly why polymetallic deposits behave differently from primary silver deposits at this point in the cycle. A deposit carrying meaningful zinc, lead and copper alongside its silver generates revenue from metals whose own markets are tight, and those revenues are credited against the cost of producing the silver. The reported cash cost per silver ounce falls, sometimes below zero, and the project's sensitivity to the silver price changes shape entirely. The second variable is what has already been spent. Most projects reaching a preliminary economic assessment are proposing to build everything: mill, camp, tailings facility, road, power. A project where a mill, an airstrip and kilometres of underground development already exist is answering a different capital question, and the study that describes it should be read differently as a result. Honey Badger Silver Announces Positive Preliminary Economic Assessment for the PC Silver Mine; Sees Significant Silver Plus Critical Minerals Production
Honey Badger Silver Inc. (TSXV: TUF) (OTCQB: HBEIF) (FSE: 1QA) (Tradegate: 1QA) announced the results of an updated Preliminary Economic Assessment and updated Mineral Resource Estimate for its 100%-owned PC Silver Mine, historically known as Prairie Creek, in the Northwest Territories. All amounts are in Canadian dollars unless otherwise stated. The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA will be realized. The study contemplates an underground operation mining approximately 2,400 tonnes per day, with dense media separation upgrading and milling at approximately 1,500 tonnes per day post-DMS over 22 years. Mined grade before DMS is 112 g/t silver with 6.1% lead, 8.5% zinc and 0.25% copper, rising to a mill head grade of 173 g/t silver with 9.4% lead, 12.8% zinc and 0.39% copper after upgrading. Life-of-mine payable production is approximately 56.1 million ounces of silver alongside 2,080 million pounds of lead, 2,577 million pounds of zinc and copper. The negative sustaining cost figure is the number that will draw attention, and it is worth stating precisely what it is. All-in sustaining cost is a non-GAAP measure, and the negative figures are reported net of by-product credits. The zinc, lead and copper revenue exceeds the total cost of the operation, so the cost attributable to each silver ounce computes below zero. It is a legitimate and widely used presentation in polymetallic mining, and it is also entirely dependent on base metal prices holding. At weaker zinc, lead and copper prices the same mine has a positive silver cash cost. "Second, PC Silver is an existing mine, which was built in the early 1980's, with significant capital already invested, extensive existing infrastructure, key permits in place and strong relationships with Indigenous communities, territorial and federal governments and other partners. We are advancing a significantly developed asset with decades of hard work and capital investment already behind it," commented Chad Williams, Executive Chairman of Honey Badger Silver. That existing-asset argument is the reason the capital line reads the way it does. The site hosts a historic mill, an airstrip and approximately five kilometres of underground workings, and the all-season road is described as an upgrade to an existing winter road rather than a new corridor. The Company holds Impact and Benefit Agreements with the Nahɒą DehéDene Band and Łíídlįį Kų́ę́ First Nation and a Benefit Agreement with AchoDene Koe First Nation, and a federal National Trade Corridors Fund contribution of up to $25 million toward the road has previously been announced and remains subject to drawdown conditions. Williams also flagged what the study deliberately leaves out. No economic value has been attributed to germanium, antimony or tungsten, nor to recent Canadian tax incentives, and the Company has said it will evaluate a staged, lower-capital initial production start that could generate cash flow earlier before ramping toward the scenario in the PEA. The board has authorised the next stage of engineering with a Feasibility Study targeted for completion in the second quarter of 2027. On financing, Williams referred to inbound interest from smelters and off-takers, debt providers, government agencies and infrastructure investors, and two unsolicited expressions of interest for turnkey project financing. None of that is a commitment, no financing has been arranged, and no production decision has been made. Read this and more news from around the sector at: https://Equity-Insider.com. In other industry developments and happenings in the market this week include: Hecla Mining Company (NYSE: HL) is the largest silver producer in the United States and the clearest live illustration of what by-product economics do to margin. It reported 231 million ounces of silver reserves at the end of 2025, guided 2026 silver production of 15.1 million to 16.5 million ounces, and produced 4.2 million ounces in the second quarter of 2026. Chief Executive Rob Krcmarov has described the Company as accelerating investment, with the 2026 exploration and pre-development budget raised to $55 million. The balance sheet moved in the same direction, with the last $263 million of senior notes redeemed in April 2026 and the revolving credit facility undrawn. Hecla operates Greens Creek, Lucky Friday and Keno Hill, all polymetallic, which is why its reported silver costs sit so far below the prevailing price. It is a long-established multi-mine producer at a completely different stage and scale from a company completing a PEA, and is referenced as sector context rather than as a comparable. Pan American Silver Corp. (NYSE: PAAS) produced 22.8 million ounces of silver in 2025 and has guided 25 million to 27 million ounces for 2026, with the integration of the Juanicipio operation supporting a stronger production profile into a tightening market. It is the scale benchmark for the primary silver sector in the Americas. Pan American is included because its guidance is one of the few reliable public read-throughs on whether primary silver supply is actually responding to the price. An increase of two to four million ounces across a portfolio of that size, against a market running a projected 67 million ounce deficit, is a useful measure of how slowly mine supply moves even when the incentive is obvious. Vizsla Silver Corp. (NYSE American: VZLA) is the closest developer analogue in this group. Its Feasibility Study on the Panuco project in Mexico returned an after-tax net present value of approximately US$1.8 billion and an internal rate of return of 111% at a silver price of $35.50 per ounce, and the Company has reported holding more than US$450 million in cash alongside a 60,000 metre district drill program. Two things are worth drawing from it. The first is that a study result of that order was generated at a silver price well below where the metal has traded through 2026, which is a reminder of how much of the current enthusiasm rests on price assumptions rather than on rock. The second is the capital position: a developer with several hundred million dollars in the bank is playing a fundamentally different financing game from one that has yet to arrange construction capital. Vizsla is at a more advanced study stage in a different jurisdiction and is not a comparable. Coeur Mining, Inc. (NYSE: CDE) operates a portfolio of precious metals mines across the United States, Mexico and Canada, and has been among the more actively traded silver names through 2026 alongside Hecla, Pan American and First Majestic. It has been a consolidator in the sector, and its valuation has historically traded at a materially lower earnings multiple than Hecla's. Coeur earns its place here as the counterweight to the enthusiasm. Silver equities have moved sharply on the deficit narrative, and multiples across the group have diverged widely, which tells you the market is not pricing these businesses on a single view of the metal. Readers should treat any silver equity, including every name in this article, as exposed to a commodity that has been notably volatile. Coeur is a producer at a different scale in different jurisdictions and is not a comparable of the profiled company. Track the Signals Before the Crowd The best positioning happens before the crowd catches on. Eagle Eye is a real-time investor signal-intelligence platform that surfaces sentiment shifts, news flow, and trending tickers as they form, so you see attention building instead of chasing it. Watch it live at eagle-eye.dev. Article Sources: [1] Honey Badger Silver Inc., "Honey Badger Silver Announces Positive Preliminary Economic Assessment for the PC Silver Mine; Sees Significant Silver Plus Critical Minerals Production," September 17, 2026 (PEA results, updated Mineral Resource Estimate, operating and capital summary, Chad Williams commentary, Qualified Persons). Contact Information: DISCLAIMER: Nothing in this publication should be considered personalized financial advice. We are not licensed under securities laws to address your particular financial situation, and no communication from us should be deemed personalized financial advice. Please consult a licensed financial advisor before making any investment decision. This is a paid advertisement and is neither an offer nor a recommendation to buy or sell any security. We hold no investment licenses and are neither licensed nor qualified to provide investment advice. The material in this release is intended to be strictly informational and is never to be construed or interpreted as research material. All readers are strongly urged to perform their own research and due diligence and to consult a licensed financial professional before considering any level of investing in stocks. Be extremely careful, investing in securities carries a high degree of risk; you may lose some or all of your investment. This article is being distributed by Equity Insider, which is wholly owned and operated by Market Equities Limited ("MEL"), a company incorporated under the laws of Ireland. MEL has been paid a fee directly by Honey Badger Silver Inc. (TSXV: TUF) (OTCQB: HBEIF) ("Honey Badger Silver") for advertising and digital media services, and MEL expects to receive further compensation in the future in connection with Honey Badger Silver as part of an ongoing digital media effort to increase visibility for the company. No further notice will be given, but let this disclaimer serve as notice that all material, including this article, has been approved by Honey Badger Silver. This compensation constitutes a conflict of interest as to our ability to remain objective in our communication regarding the profiled company. Because of this conflict, individuals are strongly encouraged not to use this publication as the basis for any investment decision. MEL and its owners, operators, directors, and affiliates do not own any shares of Honey Badger Silver, but reserve the right to buy and sell shares of Honey Badger Silver at any time without any further notice commencing immediately and ongoing, in the open market, through private placements, and/or through other investment vehicles. There may also be third parties who hold shares of Honey Badger Silver and may liquidate their shares, which could have a negative effect on the price of the stock. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in this publication is not trustworthy unless verified by their own independent research. Because events and circumstances frequently do not occur as expected, there will likely be differences between any predictions and actual results. Investors are cautioned that they may lose all or a portion of their investment when investing in stocks. This document is governed by the laws of Ireland. Cautionary Note Regarding the Preliminary Economic Assessment and Production Decisions: The Preliminary Economic Assessment referenced in this article is preliminary in nature and includes Inferred Mineral Resources. Inferred Mineral Resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves have no demonstrated economic viability. No Mineral Reserves have been estimated for the PC Silver Mine and no feasibility study has been completed. Any decision to commence production would not be based on a feasibility study of Mineral Reserves demonstrating economic and technical viability and would therefore involve increased uncertainty and multiple technical and economic risks of failure. Further work may result in the upgrading of portions of the Inferred Mineral Resources but there is no certainty that Inferred Mineral Resources will be converted to Measured or Indicated Mineral Resources. Net present value, internal rate of return, free cash flow, payback and cost figures cited are outputs of a preliminary study under stated metal price, exchange rate, recovery and payability assumptions, including a spot pricing case, a long-term consensus case and a last-twelve-months high pricing case, and they change materially with those assumptions. The last-twelve-months high pricing case uses the highest price for each of silver, zinc, lead and copper and the lowest foreign exchange rate over the preceding twelve months and does not represent prevailing or expected prices. Silver-equivalent figures are presented for illustrative purposes only and are calculated using the stated metal prices, recoveries and payabilities. All-in sustaining cost is a non-GAAP measure reported net of by-product credits; negative all-in sustaining costs reflect base metal by-product revenue exceeding operating costs and are dependent on zinc, lead and copper prices, which are volatile. No economic value has been attributed in the PEA to germanium, antimony, tungsten or other critical minerals, or to recent Canadian tax incentives, and no assurance is given that any such value exists or will be realized. Statements regarding a potential staged or lower-capital initial production start, a Feasibility Study targeted for the second quarter of 2027, financing sources, expressions of interest, the all-season road, drawdown of the National Trade Corridors Fund contribution, and permitting are forward-looking; no financing has been arranged, no production decision has been made, and the Company has indicated that substantial additional capital will be required. Qualified Persons: The scientific and technical information in the Company's news release, other than the Mineral Resource Estimate, is based upon information prepared by or under the supervision of Mike Makarenko, P.Eng., an independent Qualified Person as defined by National Instrument 43-101. The Mineral Resource Estimate, with an effective date of June 21, 2026, is based upon information prepared by or under the supervision of Greg Mosher, P.Geo., of Global Mineral Resource Services, an independent Qualified Person as defined by National Instrument 43-101. Please refer to the Company's filings on SEDAR+ at www.sedarplus.ca for the assumptions and risk factors associated with its disclosure, and to the technical report to be filed in support of the PEA. Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of the Company's releases. References to Hecla Mining Company, Pan American Silver Corp., Vizsla Silver Corp. and Coeur Mining, Inc. are provided solely as market and sector context. None of them is a peer, competitor, or financial comparable of Honey Badger Silver. They are at materially different stages of development and scale, operate different assets in different jurisdictions, and their production, reserves, resources, studies, costs, guidance and share performance are not indicative of Honey Badger Silver's prospects. Honey Badger Silver is a pre-revenue exploration and development company. No partnership, affiliation, sponsorship, or endorsement is implied, and none of the companies named has any involvement in Honey Badger Silver, this article, or its distribution. Financial and operating figures attributed to those companies are as disclosed by them in their own releases and filings and have not been independently verified by the publisher. Silver, zinc, lead and copper price levels and market deficit estimates cited are as of the dates stated, are drawn from third parties, are volatile, and past performance does not guarantee future results. Eagle Eye is an investor signal-intelligence platform affiliated with the publisher of this article, and this reference constitutes promotion of an affiliated product. Eagle Eye is not a broker-dealer, and nothing in the platform or in this article is financial, investment, tax, or legal advice. Data provided in the platform is for informational purposes only and may be delayed. Always do your own research before making any investment decision. This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and "forward-looking information" within the meaning of applicable Canadian securities laws, and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe future expectations, plans, results, or strategies and are generally preceded by words such as "may", "future", "plan" or "planned", "will" or "should", "expected", "anticipates", "draft", "eventually" or "projected". You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including metal price and exchange rate volatility, the estimation of mineral resources, permitting, access and road construction, financing availability and dilution, capital cost escalation, and other risks identified in the Company's filings on SEDAR+ at www.sedarplus.ca. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and Equity Insider undertakes no obligation to update such statements.
SOURCE Equity Insider | ||
Company Codes: Frankfurt:1QA,NYSE:CDE,NYSE:HL,NYSE:PAAS,NYSE:VZLA,OTC-BB:HBEIF,OTC-QB:HBEIF,TorontoVE:TUF,TRADEGATE:1QA |
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