Silver can be found in a free state naturally, however most silver is produced as a byproduct to gold or lead production. It is highly concentrated in the ore Argenite (Silver gets its chemical symbol Ag from the latin word Argentum).
The move over to mid summer from spring for silver options contracts to end moved spot silver lower especially when compared to gold, the price of which was propped up by heavy demand by central banks in Russia, Mexico and Thailand among others (Canada's BNN interview with a silver anaylist from New York). Russia's central bank purchased about 1 million ounces of gold in the first four months of 2011 up from over 400,000 in the second half of 2010; Russia's last major purchase was in May 2010 when it bought 1.1 million ounces of gold during the month which represents 16.6% of global production that month. Speculators short on silver should boost the price come late June/early July.
In 2010 most silver primary production came from a handful of companies, some growing rapidly from small cap to mid cap companies. Most of the growth came from the following companies: 2010 silver production key companies: Pan American Silver:24.3 mil oz, Silvercorp Metals:4.6 mil oz, Silver Standard Resources:6.302 mil oz (up 48%), First Majestic Silver:6.5 mil oz (up 62%), Hecla Mining Company:10.566 mil oz (down); among diversified industry players Rio Tinto (RIO) was down 20% to 6.862 mil oz, BHP Billiton and Fresnillo led the industry at 45 and 38 million ounces respectively, Goldcorp was the largest silver producer among gold companies (23 million ounces). Large cap companies (primary gold producers) like Goldcorp traditionally sell the silver produced at their mines to royalty companies like Royal Gold and Silver Wheaton. The list becomes much longer when diversified resource companies are included.
Goldcorp (not shown below because over 80% of their silver is contained in gold mines which have yet to begin producing/a lot of their current silver production is sold to royalty companies. Because their focus is mainly on gold (resulted in the spinoff of silver wheaton a couple years ago) a lot of their silver production is converted to gold equivalent) has 1.3 billion ounces of 2P silver reserves (1.0 billion of which is at their 100% owned Penasquito mine in Mexico. More information on silver uses and aggregate production at Commodity:Silver.