AXcess News: Looking for the Silver Lining.

HOUSTON -- Silver demand has grown thanks in large part to Barclays iShares Silver Trust, which debuted on the American Stock Exchange April 28. The fund had managed to accumulate 40 million ounces of bullion in its first few days of trading, according to the Financial Times. More silver funds are on the horizon that will shrink supply further. But finding the silver lining could seem confusing as silver mining companies lag the market while processors seem to benefit.

iShares Silver Trust is an exchange-traded fund (ETF) that has paved the way for others. ETF Securities Ltd. says it plans on launching a silver fund on the London Stock Exchange.

According to Barclays silver fund prospectus, its silver ETF would require the purchase of 130 million ounces of silver. While the fund market is credited with pushing silver higher, few mining companies are showing a profit at these price levels and are lagging the market.

Pan American Silver Co. reported record production in the first quarter on May 4, up 11 percent, or 3 million ounces. Revenue also set a new record for the period, climbing 57 percent to $45.7 million, yet shares of PAAS are 30% below its 52-week high.

Coeur D Alene Corp. reported its first quarter results Tuesday, reporting net income of $14.3 million, or 5 cents per share. Last year, the company posted a loss of $1.1 million, or less than a penny a share.

Silver mining companies, while benefiting from higher bullion prices, were also affected by Bolivia's plan to exert greater control over all of its natural resources, which has mining companies fretting over their future prospects, AP reports.

Reno-based Itronics Inc. (OTCBB: ITRO), which is the only manufacturer of 5-ounce silver bars in America, estimated in April that it would increase silver sales in the second quarter after reporting an increase of 170 percent in the first quarter. But its estimate took into consideration silver prices in the $10 to $11 per ounce range, which has appreciated more than 30 percent since then and may mean higher results.

Itronics processes photochemicals, removing the heavy metals which are refined, removing the silver to manufacture its 5-ounce silver bars. Dr. John Whitney, Itronics president, noted in a press release about a shareholders' meeting that the company was expanding its silver refinery and had tripled plant capacity. He also said that a pilot leach operation was also being planned that would reduce 50% of the materials to be refined.

Whitney said, "This is leaching technology that may be adaptable for use in gold and silver mining, especially where leaching of roasted iron, zinc, and sulfur bearing gold/silver concentrates must be performed as part of the mining process."

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