Copper/Zinc mines produce 570 million oz Byproduct Silver per year for under .50 cents per oz
World-Wide industry (plus photography) uses about 500 million ounces of silver per year (fact from silver institute), but the supply is 1048 million ounces per year (2012). All the excess silver is STORED in one form or another each year, forming a massive silver glut of stored silver.
570 million ounces of silver per year (MORE than we USE each year) is produced as a "waste" byproduct of copper, zinc, lead and other mining. Regardless of how low silver prices go (even to $1.00 per ounce), these copper and zinc and lead miners will still produce 570 million ounces of silver per year.
Tiny amounts of silver are in the copper and zinc and lead ore. The silver gets a free ride through the entire mining and smelting process right down to the very, very last step where the silver is removed from the copper (and zinc and lead) to purify the copper (and zinc and lead). The ONLY costs attributable to silver are the very last part of refining and the cost is WELL UNDER .50 cents per ounce.
Because the amount of silver in each unit of copper and zinc is so VERY VERY low, when silver prices crash it has very little effect on the economics of producing copper and zinc, so they just keep producing byproduct silver no matter how low silver prices drop.
Primary silver mines account for only 220 million ounces of the 1048 million ounce silver supply. Primary silver mines have an average cash-cost of $5-$8.88 per ounce (average in 2010, 2011, 2012). Some, like Hecla has a cash cost of $2.70 per ounce (2012), but we don't even need ANY of the silver from primary silver mines. All that silver is excess and just gets stored in one form or another.
Hecla can generate excess cash in their MINING OPERATION even if silver prices drop to $6 per ounce, but we don't even need their silver.