TLDR:
- Silver trading at $78 per ounce establishes new range between $70-$90 after climbing from $30 in 2025.
- Mining profit margins expand significantly with production costs at $15-$25/oz for silver, $1,500-$2,000/oz for gold.
- Aya Gold & Silver’s Boumadine project will increase output sixfold to 36 million silver-equivalent ounces by 2030.
- Silver X Mining plans to double production to 2 million ounces by 2027, with capacity for 6 million long-term.
Silver and gold prices remain at historically elevated levels, with silver trading near $78 per ounce and gold reaching $5,000 per ounce.
Market analysts are examining whether these price points represent a new stable range for precious metals. Investment focus has shifted toward mining companies that can expand production capacity at current valuations.
Financial observers note that mining stocks have not fully reflected the sustained higher commodity prices in their market capitalizations.
Mining Profitability Expands at Current Metal Valuations
Analysis from market commentator Wall Street Mav indicates silver has entered a consolidation phase following significant gains.
The metal climbed from $30 to $121 per ounce between June 2025 and January 2026. Current trading patterns suggest a new range between $70 and $90 per ounce may be forming.
Gold and silver miners are experiencing substantial profit margins at these price levels. Production costs for gold typically range from $1,500 to $2,000 per ounce, while silver mining costs average $15 to $25 per ounce.
The spread between production costs and market prices has created favorable conditions for mining operations.
Supply constraints continue to support precious metals pricing. Market observers point to evidence of silver supply shortages affecting industrial demand.
Demand destruction for silver is estimated to occur around $135 per ounce, where solar panel manufacturers would transition to copper-based alternatives.
The duration of elevated prices will determine mining company strategies. Extended periods at current levels enable debt reduction, stock buybacks, and dividend increases. Companies with the capacity to increase production stand to benefit most from the sustained price environment.
Production Growth Differentiates Mining Investment Opportunities
Aya Gold & Silver (AYASF) operates the Zgounder mine in Morocco, producing 6 million ounces of silver annually. Production costs at the facility run approximately $20 per ounce, generating gross profits exceeding $300 million yearly. Free cash flow is estimated at $250 million under current operations.
The company’s Boumadine project represents a significant expansion opportunity. This development will be six times larger than the existing Zgounder operation. Production is scheduled to begin by 2030, with output equivalent to 36 million ounces of silver annually.
Silver X Mining (AGXPF) operates in Peru, home to the world’s largest silver reserves. Current production stands at 1 million ounces per year. Management projects doubling output to 2 million ounces by 2027 through operational improvements.
Long-term development plans suggest Silver X could scale production to 6 million ounces annually. The company’s reserve base supports this expansion trajectory.
Geographic diversification remains a consideration for investors evaluating regional mining operations and associated operational risks.
