The miners may seem to have limitations vis a vi the ETF's right now. I can live with that. But what entities have the metal? The miners have the metal either in hand or in the ground.
Let's say the COMEX does crash. PM Miners can actually become the only entities outside of the scrapers and possibly governments that can deliver precious metals. There is nothing that says the miners can not begin to hoard metal and distribute it to employees and share holders. They can also sell it directly to industrial end users through refining agreements.
I am sure that the mining executives are not all clueless idiots. They see the game that is currently going on. I am sure they are talking all this out. Does anyone think they are going to allow themselves to be screwed out of their hard earned product? There is nothing stopping PM miners from stock piling their silver, gold, and other PM's. Peter Barnes, former CEO of SLW at one time discussed stock piling of metal.
Also miners can reorganize themselves into royalty trusts of some kind. This of course is complicated, but the Canadians have a lot of experience in this area regarding oil and gas.
I put this out on the SLW board as a response to another topic, but thought I would bring it to the AXU board due to the high quality of posters here.
Regardless of whether they can stockpile or not, the salient point here is that silver in the ground is like money in the bank.
No, BETTER than money in the bank, because money in the bank is gradually and inexorably depreciating in value, while silver in the ground is - and by all indications will continue to be - gradually(?) and inexorably appreciating.
That's why I'm quite willing to be patient and give Alexco all the time it needs to pull the metal out of the ground. As long as the price of silver is going up - or even more or less holding - relative to the dollar's purchasing power it is going to be worth even more tomorrow than it is today.
Silver miners are a very small and increasingly powerful group, not unlike OPEC or the oil companies. Like the oil companies, one can even see the day approaching when they will collectively be in a position to determine how much they want to charge to be willing to part with their increasingly valuable booty.
Think about it: Silver miners own the perfect commodity. If the economy goes DOWN, silver goes up in investment value. If the economy goes UP, industrial demand for silver increases. Silver has a built in hedge that even gold lacks. That's why I believe the gold-silver ratio is likely to continue falling - and the value of silver rising - over the long run, regardless of what the economy does.
You have brought up a very good question. I would think that each agreement is mine specific and can be renegotiated and or terminated for a penalty. There are people on this board that know a lot more about this than I do. I hope to hear what they have to say.
I do know that Goldcorp stock piled gold back when prices were very cheap.