Silver Stock Report #6

Silver Stocks — Comparative Valuations, Weekly Report #6

By: Jason Hommel, The Silver Stock Report

What’s new?    49 total silver stocks in this report, and symbols to research on 19 more, for a total of 68 companies.Price of silver is $5.14 as of Friday, 2pm, which was used to calculate the following figures. The CAN $ / US $ conversion factor is .7653.  I will use .77 for ease. Stock Symbol     Approx. number of silver oz. “in ground”** for 1 oz. silver’s worth of stock. HL                   .46 –current producer
IPOAF.PK            1.9  –current producer
CDE                 1.9  –current producer
GRS / GAM.TO        2.5 –current producer
MFN / MFL.TO        4.0
SIL                 4.6
FSR.TO              6.0  –current producer
MR.TO / METLF.OB    6.3
* CZN.TO / CZICF.PK 7.2 –high grades can mine at profit, low start up costs
PAAS                8.0  –current producer
WTZ / WTC.TO        9.1
MGR.V / MGRSF.PK    9.8 
GQM.TO / GQMNF.PK   10.3
* CFTN.PK           10.9 — 100 (larger number is “exploration potential”)
KBR.V               11.2
TM.V / TUMIF.PK     11.2
SSRI                12.4 –multi-property company, understands silver story
ADB.V                   13.8 –actively expanding resources. (Huge gas bonus)
SVL.V / STVZF.PK        18.8 –actively expanding resources.
DNI.V                   20.7 –active on Clifton’s property.
MAI.V / MNEAF.OB        22.1 –silver “equiv.”  real silver quantity I don’t know.  
ECU.V                   29.7 –gold bonus; 
* ASM.V / ASGMF.PK      31.5 –owns 49% of a prior working silver mine.
* SRLM.PK               31.7 –recently acquired the Sunshine mine.
* EXR.V / EXPTF.PK      31.8 –significant zinc bonus 60% zinc, 25% silver
* FAN.TO / FRLLF.PK     37   –low grades, may have 1.7 to 4 times more silver.  
* MNMM.OB               41   –copper bonus, start up cost may need ~$250 million
UNCN.OB                 133  –lease expiring; seems very risky* = I own sharesExplorers (by market cap):
VGZ VGZ.TO   26.9 –significant gold bonus (almost half of “silver equiv” are gold)
MCAJF.PK  11.88  
* CDU.V / CUEAF.PK  29.88
TVI.TO / TVIPF.PK  –current producer of a dore silver bar 96% silver, 4% gold
IAU.V / ITDXF.PK     18
* NPG.V / NVPGF.PK   46-257  “exploration potential”
EXN.V 5.22               
* GNG.V 
ITRO.OB* = I own shares
** = “in ground” includes all “oz. in the ground” as equal, but they are NOT EQUAL.  Some are more certain and others are more speculative.  They range from most certain to least certain such as: proven reserves, probable reserves, indicated resources, inferred resources.  Some numbers are even “exploration potential” especially if there is a range.  Numbers are not all 43-101 compliant.The single number next to each stock symbol above represents the approximate number of ounces of silver in the ground you are buying title to when you invest the equivalent of one ounce of silver by buying shares in the company at current prices.  (It does not include zinc, or copper, or lead, but it does include gold at a 1:10 ratio of gold:silver.)To quickly “tab” down to the company you are interested in, note the symbol. Then hit “control-F” to “FIND” the symbol below. Then, you will go directly to the summary about that company. Since this is a long document, that is much easier than trying to scroll down.————-
WEEKLY COMMENTARY (All new in this section):When will it be time to take profits?  I believe when the dollar crashes, and stocks are quoted in terms of oz. of silver per share, then it will be time to buy physical silver bullion.  Also, if PE ratios of mature producers head to levels significantly higher than about 15, it will also be time to take profits.Remember to “take profits” from your rising silver stocks by buying real physical silver bullion.  You’ve got to keep the percentage of physical silver either the same, or increasing, as your stocks outperform the metal.  The best way get physical silver is by going to your local coin shop.  Look up “coin dealers” or “coin shop” in your phone book.Buy US coin 1964 or earlier, called “90% junk silver,” or buy bullion bars.  Eithershould be priced very close to the bullion price.  If you can’t get a good price from your local shop, show them some prices from several of the dealers below, or order from one of the dealers below. (prices vary, the best deal is not always the same dealer) (Same as above: wexford) don’t believe that I will ever “take profits” in the rise in physical silver by selling it for paper money.  I would sell silver for things, like food, clothing, or housing, but not for paper.Just as nobody would be in a panic to sell dollars for pesos if the dollar rose too much, (as it has) nobody with any real understanding of silver would try and sell silver for any fiat currency if silver rises quickly.I may end up selling silver for gold, some at the 10:1 silver:gold ratio, some more at 5:1, and I would sell any silver remaining at a 1:1 ratio, that we may hit during a supply/demand crunch during a paper money collapse.—————Brokerages for investors in the USA that handle Canadian issues and/or pink Internet, $10.99; Telephone System, $14.99; Broker-assisted: $24.99 Market orders, $29.99 Limit  online trading, $29.95/trade. no extra charges for market orders, limit orders, large volume, small volume, stocks under $1.00, or Canadian, Pink Sheets, or OTCBB.  (Get started with only $500!)  –for broker assisted trades, starting at $45/trade.Global Resource Investments LTD..  “They appear to be very knowledgable in the field and all their brokers are out of the mining industry.” –only $10 in and $10 out. There is no extra fees. You buy the Canadians PK or you know of any other good brokers for CAN issues, & PK stocks, email me.  Some investors are telling me their brokers cannot buy Canadian stocks or the pink sheets.)—————TO TRACK THE STOCKS ON THIS LIST:  Click on yahoo finance.  Take a minute to register.  Sign in.  At the top of the page, click “create” a portfolio.  Choose “track your current holdings”.  In the large box, copy and paste the following symbols (Use your mouse to highlight the text, then use control-C to copy, control-V to paste).XAGUSD=X BHP GMBXF.PK HL IPOAF.PK CDE GRS GAM.TO MFN MFL.TO SIL FSR.TO MR.TO METLF.OB PAAS MAN.TO MMALF.PK WTZ WTC.TO MGR.V MGRSF.PK CZN.TO CZICF.PK GQM.TO GQMNF.PK CFTN.PK KBR.V TM.V TUMIF.PK SSRI ADB.V SVL.V STVZF.PK DNI.V MAI.V MNEAF.OB ECU.V ASM.V ASGMF.PK SRLM.PK EXR.V EXPTF.PK FAN.TO FRLLF.PK MNMM.OB UNCN.OB IMR.V IMXPF.OB VGZ VGZ.TO  MCAJF.PK CDU.V CUEAF.PK MAG.V TVI.TO TVIPF.PK MMGG.OB EPZ.V ESPZF.PK IAU.V ITDXF.PK NPG.V NVPGF.PK HGM.V NJMC.OB MMG.V MMEEF.PK QTA.V QURAF.PK EXN.V GNG.V SPM.V SHSH.PK ROK.V HDA.V ITRO.OB III.TO IPMLF.PK EZM.V EZMCF.PK MTB.V MSLM.PK MAR.AX RRM.V SBUM.PK FWGO.OB MEMLA.PK SLSR.PK SDSI.PK HRNS.PK GPXM.OB TUO.V TEUTF.PK HGM.V HOGOF.PK GSPG.OB AAG.V ANMCF.PK MVRM.OBThe first symbol, “XAGUSD=X” lets you track the silver price.  These symbols are in the exact order they appear in this weekly report, so this way, you can follow along what’s taking place in the silver market on a daily basis.  Also, you can easily access charts for any of these, such as 1 day, 5 day, 3 month, 6 month, 1 year, 2 year, or 5 year charts.  You will love being able to access this information so quickly from your own continually updating “silver stock page”.  You will also be able to see, in one place, right at the end of the list, the news releases for each stock on the list (if the company has their PR act together). Here is how to track the price of your Pink Sheets stocks.  The PK symbols do not update volume or price too often, if at all.  This is often due to the laziness of the pink sheet dealers.  To get the price and volume of your stock, look up the Canadian symbol.  Then, multiply the Canadian price by the exchange rate, which today is about .76.  That will give your US dollar price.  Then, add about 1-3% for commissions for trading through the pink sheet dealers to get an idea of what you might pay.  But due to the lack of liquidity in these, sometimes a single moderately-sized order can move the price up 15% if you buy in a hurry, so be prepared for that.  If you put in a low price, sometimes your limit order will be filled if you are patient, and the price moves back down to your order, and that might take a few days, or perhaps never if the stock takes off well above your price.
————-This is a list of primary silver stocks. I count a company’s ounces of gold as 10 oz of silver. Why? Because I have a positive bias in favor of silver over gold.Given my bias in favor of much, much higher silver prices, then, to me, the grades of silver are far less important than buying more oz. in the ground.  More oz. in the ground at a lower cost is the most important consideration for me. My method is simple. Cost per ounce in the ground. How much do you get (silver reserve totals), and how much does it cost (market cap)? The cost is the market cap divided by the silver reserve totals. Cheaper is better. Buy low, sell high.Disclaimers, Warnings, and Advice: I have gathered the information below over the course of several months. I believe it is accurate to the best of my ability. I may have made mistakes. I probably did. I’m human. I have collected the information from public sources such as company web sites and public information found at to get the stock prices. This report in no way guarantees the accuracy of the information below, since the information may change at any time. The number of outstanding shares can change as a company engages in new share issues to raise more capital through private placements, or if outstanding warrants (and options) are exercised and converted into shares, or if shares are bought back. Shares can be consolidated, or split. The number of ounces of silver in the ground can also change, as these are often only estimates. The number can also change up or down, depending on drilling results.This information is not intended as a solicitation for any company.All total estimates of “ounces in the ground” can vary widely. There are “proven and probable reserves” which are the highest category of certainty which is obtained through many drill holes, and then at the least accurate, there are “inferred resources” which are hardest to estimate. Additionally, every miner always has “more silver properties that need to be explored, which probably contain more silver”. For the purposes of this report, I have added all those numbers together. It is believed that all these “ounce in the ground” estimates can be profitably mined at $5-6 per ounce silver, or lower. Thus, I believe that when silver trades for $15/oz. or above, that all of these ounces can be mined at a substantial profit.I may be wrong. (I probably make mistakes in every article, and there have been updates and corrections made each week, especially as prices change.)Mining is a risky business. You need to be willing to sustain a total loss of your investment for various unforeseen accidents. Silver stock companies can do stupid things to shareholders such as take on debt, or issue more stock at too low prices which reduces the percentage of the company you may own (dilution). Yet, they need to issue shares to raise capital for drilling, and then an even bigger dilution to build a working mine. They may sell YOUR silver too cheaply, or worse, hedge the price of YOUR silver just as it begins to go up if they lock in a price which then proves to be too low if the dollar is destroyed. Mining is a risky business as estimates of assets in the ground can change. There is political risk and environmental risk. They can’t franchise the business, are stuck in one location, are subject to government confiscation, or taxes, or union wage negotiations, and corporate looting.Do your own research. Be responsible for your own investment decisions. Again, please, before investing in a mining company, call up the company, and speak either with the CEO or the Investor Relations contact person.So, at the very least, check the company web site, read the annual reports, check my numbers, check my math, and email the company. That’s what they are there for, to answer your questions, and to speak about the opportunity of the company. Don’t trust everything you read over the internet. I am a biased source. I own silver mining stocks. And I’m not a broker, nor an investment advisor. I’m just a private investor trying to make sense of this crazy world, and sharing my information and thoughts on silver companies.This report may be copied, and transmitted by other people, and may become outdated by the time it reaches you.I can’t tell you how you should invest your money, of course. The reason is that I don’t know how convinced you are of the silver bull market, nor do I know how soon you will be needing the money back, so I don’t know how long you can wait to see results, nor do I know how much liquidity you need. Nor do I know the size of the money you have to invest. It is very hard to invest large quantities of money in a small market cap stock.That being said, my investment strategy seems to be working for me, so far. And so, here is how I have valued the following silver companies to make my own investment decisions.(Market cap is always converted to US dollars and denominated in US dollars because I divide by ounces of silver, which are also denominated in dollars)BHP Billiton Ltd (BHP) 
–‘produces 40 mil oz. silver annually from one mine’ 
Additional comments:  unfortunately, BHP has a 49 Billion market cap, so we can’t buy BHP for the “silver exposure”.  IE, $49 Billion / oh, say, 1000 million?????= $49/oz.Hello?  BHP?  By all means, keep mining the silver if you want the silver exposure, and want to be in the silver busines.  But don’t sell the silver.  Keep it.  Let the profits of your entire company accrue as an increasing physical supply of physical silver.  In fact, do as Buffett did, and buy more silver if you can.  It would be infinitely easier for you to buy silver from yourself than it would be to buy 40 million ounces of silver from the COMEX, which, today, might be impossible. Grupo Mexico SA de CV (GMBXF.PK)
“Grupo Mexico ranks as the world’s third largest copper producer, fourth largest producer of silver and fifth largest producer of zinc.”HL
Phone: (208) 769-4100
109 mil shares @ $5.95 share 
$653 million Market Cap (MC)
near zero debt, cash: $113 mil
(est. 2003 production 9 mil oz. silver) 
(the La Camorra gold mine, 412,000 oz gold.) … (x 350/5 = 28 mil silver equivalent oz.)
San Sebastian silver mine, (proven & probably reserves) 8.7 mil (produced 3 mil)
the Greens Creek silver mine (proven & probably reserves) 31 mil (produced 3 mil)
the Lucky Friday mine (proven & probably reserves) 14 mil. (produced 2 mil)
Total silver = 53.7 million oz.
Plus 412,000 oz. gold x 10 = 4.1 mil oz silver equiv.
Total silver equiv. reserves = 57.8 mil oz.
$653 mil MC  / 57.8 mil = $11.29/oz.
You get “approx” .46 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments: HL has more oz. than listed in the “proven & probable” category used in this calculation.Another way to check the value of HL is too look at profit, since they are active miners. They mine 9 million ounces of silver a year. What’s the profit on that today? Very little. Total production costs are $3.68/oz. Profit at $5.14/oz. is $1.45/oz x 9 mil oz. annual production = $13 million annual profit. Give a PE of 653/13 = 50. That’s a very high P/E, which means HL is expensive.What will they earn if silver is $15/oz., and production stays the same? The $10/oz. increase in price would be pure profit, or $90 million. So, $13 mil + $90 mil = $103 mil. profit at $15/oz. for silver.  Thus, we might expect their market cap to be ten times that, or $1,030 million, to create a P/E ratio of 10. Thus, we could expect silver to go up 300% to $15/oz., and expect HL’s stock price to increase from $653 mil to $1030 mil, or a 57% increase.Thus, if you expect silver to go up 300%, and HL can be expected to go up only 57% during that time, then you don’t want to own HL!Also, why does HL hold $113 million dollars worth of cash at the beginning of a bull market in silver?  It makes no sense to me.  Cash is trash in inflation.  They should be buying physical silver, or, use that cash to buy other silver resources in the ground. IPOAF.PK
397.5 mil shares outstanding (2002 annual unchanged since 2001)
@ $2.83/share
$1,125 mil MC
419 proven and probable reserves of silver (from 2002 annual report on website)
$1,125 mil MC / 419 oz. silver = $2.68/oz.
You get “approx” 1.9 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments:  Industrias Penoles is the world’s top producer of refined silver.  They actually derrive more revenue from silver than any other source.  But they lost money in 2002. 78.5 million oz. silver produced by the metals division in 2002, and 1 mil oz. gold.I think Industrias Penoles should stop mining silver if they are doing it at a loss.  Basic econ 101, right?  Don’t engage in uneconomical activity.  Perhaps they have a small gain this year with improved prices?  Regardless, they should realize that silver in the ground is an asset, and also that silver in the hand is an asset.  If they do make a profit, I hope they decide to keep the form of their profits in silver, or at least, pay out a dividend in silver.Their oz. numbers are “proven & probable reserves”, which is much more certain than most of the others which are mostly “inferred and indicated resources.”  They undoubtedly have “inferred and indicated resources” in addition to the “proven & probable reserves,” I just could not find any info on that at the website or in the annual report.CDE 
178 mil shares 
@ share price $3.42
$612 mil MC
Debt to/ E = 1.17 (converting debt to shares)… (may add ~40-100 mil shares)
cash $38 mil
San Bartolome (Bolivia) reserves 146 mil silver
Silver Valley Silver reserves 32 mil silver
Rochester reserves 43 mil silver
Cerro Bayo reserves 3.7 mil silver
Total: 224.7 mil silver
(to Produce 14.6 mil oz. silver in 2003)
$612 mil MC / 224.7 mil oz = $2.72/oz.
You get “approx” 1.9 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments: CDE continued to lose money in third quarter 2003, a loss of 10 cents/share, and they realized low prices for silver sales, $4.77.  I believe they have hedged their gold production at low prices.Some people point to a past high stock price as an indication of the future.  I believe this is a bad way to value a company.  Undoubedtly, there are more shares outstanding today.  An historic stock price quote would not include the dilution of new shares, and if you use the new share structure at old prices, you have an unrealistically high market cap that was never achieved. Additionally, if the company continues to mine, then they have fewer ounces in the ground today than in the past.They also, like HL, have a NYSE listing.  Maybe that explains the high valuation. Maybe some institutional money managers are limited to NYSE silver stocks. Or maybe people think a NYSE listing means “credibility”. I don’t. CDE is also a significant silver producer, 14.6 million ounces/yr. And I think that is a negative to sell silver when it is so cheap. Debt is another negative.Again, their listing of ounces is in the “reserves” category (more certain) not the “resources” category, which is less certain.  They probably have “resources” but like HL and Industrias Penoles, they give no estimates.GRS / GAM.TO 
Phone: (902) 468-0614
fully diluted 52 mil shares
@ share price $3.98
$206 MIL MC
“With the drilling of over 179 holes totalling over 33,700-metres, the resource calculation contains 761,000 gold ounces and 38.2-million silver ounces in the measured and indicated categories and a further 925,000 gold ounces and approximately 45-million silver ounces in the inferred category.”
Total gold: 1.7 mil oz. x 10 = 17 mil silver equiv.
Total silver: 83 mil oz. 
Total silver equiv = 100 mil oz.
$206 MIL MC / 100 mil oz. = $2.07/oz.
You get “approx” 2.48 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments:  At current prices of a 70:1 silver:gold ratio, about 58% of the company is in gold, 41% silver.  Gold equiv oz. is about 3 mil oz. total.  Cash cost is $85/oz.  Life of mine is 7 years.  At $385 gold, should produce $900 mil oz. profit over the life of the mine. Not bad for the current $182 MIL MC… even though the “silver in the ground” cost is currently high.  Therefore, my valuation method undercounts the gold componant, and undercounts current producers.  But that is intended, however, because I believe silver has over 7 times the potential as gold.  My comparison method does not say that the companies that cost more can’t bring a reasonable profit to the shareholder.  My comparison method does tend to say that the profits will be higher for the silver companies that cost less.There’s just not a lot of silver exposure here for the price.  But with the high grades, and “gold bonus” the risk is lower, and the profits should be here for those who want more safety in a stock pick.And they are “rapidly expanding” resources & reserves with round-the-clock drilling of 4 rigs.MFN   MFL.TO
31 mil shares 
@ $7.95
$246 mil MC
measured & indicated 2.3 mil oz gold, 116 mil oz. silver inferred 1.1 mil oz. gold, 40 mil oz. silver
Totals: 3.4 mil oz. gold, 156 mil oz. silver. 
~ silver conversion = 3.4 x 10 = 34 mil silver equiv + 156 mil oz. silver = 190 mil oz. silver 
(only 40% is silver, the rest gold)
$246 mil MC / 190 mil oz. = $1.29/oz.
You get “approx” 3.96 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments: None at the moment.SIL 
36.6 mil shares 
@ $13.88/share
$508 mil MC
San Cristobal (Bolivia) (proven & probably reserves) 454 mil silver
(forecast capital costs for construction to total approximately $435 million)
(Produced zero silver in 2002)
7.8 billion pounds of zinc, and 2.9 billion pounds of lead
$508 mil MC / 454 mil oz = $1.12/oz.
You get “approx” 4.59 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments: Apex silver has come down significantly from a high of $18/share in early August, and primarily has institutional investors.  I wonder if they are paying attention to this report? Apex is still way too expensive–especially since they are not producing.  But they do have “high grades”, but a part of the high grade story is that this one has a lot of zinc. That’s an added bonus that is not factored in to my method of valuation. Several writers have been saying zinc prices will be heading up soon, so that’s another bonus. Plenty of zinc is especially good if zinc is moving up in price.  And, they are not mining now, but are waiting for higher silver prices. That’s also a plus. The management also seems to understand that silver will move upwards a lot. Another plus. Finally, George Soros, Billionaire, owns a bit of this one, just under 10% I read recently. Another plus, in general, for the silver market if Billionaires are paying attention to it.FSR.TO
37 mil shares 
@ share price $1.26 (CAN) x .77 dollar/CAN = $.97 US
$36 mil MC
>From the Company’s main page at their url:
“As at December 31, 2001, First Silver’s mineable reserves were 12 million ounces of silver and inferred resources totaled 30 million ounces of silver. The mine is developing a 1000 plus meter exploration drift to upgrade currently identified inferred resources to mineable ore reserves and to discover new reserves.”
12 + 30 = 42 mil oz.
$36 mil MC / 42 mil oz. = $.85/oz.
You get “approx” 6.01 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments: This is a high grade, producing miner.  The high grades are a plus.  Some say that a producing miner is also a plus.  They are also actively exploring, another plus. MR.TO / METLF.OB
Ritch Hall, 303-796-0229 ext. 304
42.5 mil shares outstanding  (2003 1 Qtr report)
@ share price $2.25 CAN x .77 = $1.73 US
$73 mil MC
“The capital cost to develop the mine is estimated at $28.2 million.”
Need to confirm: 
METLF Metallica 90 mln ozs Ag  –from “Mining Share Focus” Sept. 2003 issued by Gold Newsletter from Blanchard company in Louisiana. The 12 page article  is only about Metallica
$73 mil MC / 90 mil oz. silver = $.81/oz.  
You get “approx” 6.3 ounces in the ground for 1 oz. silver’s worth of stock.Additional Comments:  None yet.CZN.TO / CZICF.PK
45.1 mil shares (fully diluted) as of Sept., 2003 
65 mil shares fully diluted when the Oct 16th Private placement is filled.
@ Share Price $1.00 CAN x .77 dollar/CAN = $.77 US
$50 mil MC
not mining ($20 mil needed to finish & start the mine) ($100 mil worth of mining infrastructure in place!)
~70 mil oz. (IN ZONE 3 only!! of 12 zones! This company seems to be greatly under-reporting their silver reserves. Their 18 year mine plan consists of zone 3 only, but there are 12 mineralized zones on the property.)  Really, perhaps well over 100 mil oz. silver.
$50 mil MC / 70 mil oz. = $.71/oz.  
You get “approx” 7.18 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments: I wrote an article on Canadian Zinc on Oct. 23 that appeared here:  I concluded with a share price target of between US $2.04/share and US $4.42/share.To get the mine up and running, they might be able to pay back such debt within 2 years, but I would hope they would avoid debt, and raise the capital as the share price begins to approach $2/share or more, and do a final public offering between $2-4/share.I note several very, very positive things about this company.1. This was the mining operation set up by the Hunt brothers, the major silver investors in the silver spike to $50/oz. in 1980 who were destroyed by their own debts and margin calls as a result of the COMEX rule changes and silver short sale manipulation. The Hunts spent $50 million building infrastructure to get the mine running. They were 90% complete when bankruptcy hit. The value of those buildings is now $100 million, and the mine only needs about $20 million (CAN) ($15 mil US) to get the mine up and running. That’s much cheaper than other cost estimates of other operations.
2. The 70 million oz. of silver estimate is for zone 3 only. But there are 12 zones on the property. The zone 3 estimate is for a 10 year mine plan that involves mining zone 3 at current metals prices. The company can mine, at a profit, at current silver and zinc prices.
3. High Grade ores:  
12% zinc/ton; = 240 lbs. zinc/ton x 42 cents/lb. = $101/ton for the zinc.
10.1% lead/ton = 202 lbs. lead/ton x 27 cents/lb. = $55/ton for the lead.
6 oz. silver/ton x $5.11/oz. = $31/ton for the silver.
0.4% copper/ton = 8 lbs. copper/ton x 90 cents/lb. = $7/ton for the copper.
Total: $194/ton.
4.  My method of valuation:  If I counted the zinc as silver, then the price of this company would be something like four times cheaper than it is.  If I counted the lead as silver, then this company would be about 4-5 times cheaper. 
5.  Zinc and base metals prices are moving up strong.  Check for updates.  Update: The recent private placement was just expanded to the maximum size allowed by the shareholders, because it was heavily over-subscribed.  Sophisticated and Accredited investors want in on this one!I own shares of CZN.TO PAAS
52 mil shares 
@ $10.84
$565 mil MC
D/E .08 cash: $12 mil.
10 silver properties (3 in production)
produced 7 mil oz. silver in 2001:
February 2003 presentation reported total reserves including peru stockpiles of 874.3 million ounces
earnings -$.77/share?!
$565 mil MC / 874.3 mil oz. = $.65/oz.
You get “approx” 7.95 ounces in the ground for 1 oz. silver’s worth of stock.Additional Comments: PAAS is one of the few silver producers on this list. Thus, they are a “silver miner” as their investor relations person will painstakingly point out. The other companies who do not mine silver, but merely own silver properties and drill them, are not “silver miners,” nor are they “silver mining companies”. They are “silver properties,” or “silver opportunities,” or “silver speculations,” I guess. Ok, but that still does not justify selling silver at firesale prices, in my book.PAAS recently went into debt in order to ramp up production. I am strongly biased against debt. But it’s a convertible debenture, so the debt can be converted into stock. They know and believe higher silver prices are coming, which is great, and their strategy is to be in solid production mode when the higher price hits. In the meantime, though, the extra production will delay the inevitable silver boom, and they are destroying shareholder value. I also advocated buying PAAS. And I recently sold. I sold because I think there are better opportunities out there.MAN.TO  MMALF.PK
Larry Glazer CEO
1 800 810 7111
63 mil shares fully diluted
$1.35  /share 
$85 mil MC
Location: northern Peru
t1 deposit inferred and indicated resources of: 
1.9 mil oz gold, 64 mil oz silver, 1.94 bil lb copper, 1.35 bil lb. zinc.
t3 deposit inferred 64.1 mil oz. silver, 2.1 mil oz. gold
Total of just these two:  128 mil oz. silver, 4 mil oz. gold x 10 = 40 mil oz. “silver equiv” = 168 mil oz. silver.
In the sulfide deposit of t-1, containing 47.7 mil oz. silver, perhaps only 1/2 the silver is “recoverable”.  So, minus half that, or 24 mil oz. = 144 mil oz.
$85 mil MC / 144 mil oz. = .59/oz.
You get “approx” 8.7 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments:  Significant copper and zinc and gold bonuses here.  $180 million to develop project.  Cash gold cost projected: $83/  The deposit has “been economic for some time now”.  TG-1 has a positive full feasibility study and and EIA now undergoing government review.WTZ / WTC.TO 
(formerly western copper)
34.3 mil shares  (Oct. 2003)
@ share price $3.82 US
$131 mil MC 
(not actively mining)
>From the “SNC Lavalin Resource Calculation” March, 2003.
Indicated 158.8 mil oz. silver
Inferred   54.6 mil oz. silver
Total 213.4 oz. silver.
Total 1.94 oz. gold x 10 (at 10:1) = 19.4 silver equiv.
The capital cost of the project to get the mine going is estimated to be US $148,628,400
$131 mil MC / 232.8 oz. = $.56/oz.
You get “approx” 9.13 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments:  (Updated March, 2003.–my prior data must have been older?)   Note the capital cost to get the mining started: $148 million dollars.   
A friendly email came in and said that WTZ also has the following other metal resources:
3.73 billion pounds of zinc
673 million pounds of copper
1.3 billion pounds of leadI note that Canadian Zinc has a similarly-sized 3 billion lbs of zinc, more lead, but with a much smaller market cap, and lower start up costs. MGR.V / MGRSF.PK
18.7 mil shares outstanding
@ share price $2.00 CAN x .77 = $1.54 US
$28.8 mil MC
inferred resource: 45 mil oz. silver + 1 mil oz gold.
1 mil oz. gold = + 10 mil oz. silver equiv
“The estimate does not address significant additional mineralized structures known to be present on the property, or the potential for large strike extensions of known high-grade zones.”
$28.8 mil MC / 55 mil oz. = $.52/oz.
You get “approx” 9.81 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments:  Gammon Lake is a large shareholder, 50%.  The quote above comes from Gammon’s website. / GQMNF.PK
51.9 mil shares outstanding
@ share price $.50 CAN x .77 = $.38 US
$20 mil MC 
“This mineable reserve is estimated to contain 1,529,000 oz gold and 24,870,000 oz silver.” –from the homepage
gold x 10 = 15.2 mil + 24.8 mil = 40 mil silver equiv.
“The estimated capital cost to the start of production is now U.S.$36 million”
$20 mil MC   / 40 mil oz. = .50/oz.
You get “approx” 10.28 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments:  My method is severely mis-pricing this company due to the large gold componant.  At a ratio of 70:1, the value of the gold and silver are as follows:  1.5 mil gold x $370/oz gold = $555 mil; 24.8 mil oz silver x $4.8/oz silver =  $119 mil.  Thus, this company, at today’s prices is 555/674 (82%) in gold and 119/674 (18%) in silver.  With values like that, it comes out relatively expensive as a pure silver play (discounting the gold as I do), but they could earn good profits, given that gold is not 10 times the silver price, but 70 times the silver price.  The interesting thing here is that the company has a historic ratio of silver to gold, at 16:1.Ignore my method of valuation for this one, and consider this company has a “huge gold bonus” that may be worth seriously considering if you are not a hard-core silver bug like I am.  If they move to production today, then the price will be based on the profits from the gold, not by the “oz in the ground” method of valuation.  I have not done a profit estimate for this one.CFTN.PK
Ken Friedman
(50 mil shares authorized)
45 mil shares fully diluted 
@ .55/share US
$24.75 mil MC  –source of 100 mil oz. resources est.
“A previous geologist has talked about a possible resource of 1 billion oz. of silver, and 5 million oz. of gold.”
100 mil oz. silver
+500,000 oz. gold x 10 = 5 mil oz. silver equiv.
= 105 mil oz. silver.
up to 1000 mil oz. silver “exploration potential”.
Clifton sold up to 50% of the project to Dumont Nickel for $5 million to be paid over time. 
50% x 105 = 52.5 million oz.
50% x 1000 = 500 mil oz. “exploration potential”
$24.75 mil MC / 52.5 mil oz. = $.47/oz.
The inverse: you get 10.9 ounces in the ground for 1 oz. silver.Additional comments:  Note the “exploration potential”. This is about 10 times cheaper, like 5 cents/oz, or you “might” get 100 oz. in the ground for 1 oz. silver.In previous reports, I said, “For more info on what’s going on with Clifton, see”  The bad news is that Dumont will own up to 1/2 the silver project.  The good news is that the exploration potential of the silver project may be up to 10 times bigger than the 100 mil oz. previously reported in the “100 mil oz. resources est.”Clifton also has a patent on a “super” colloidal silver solution made with 10,000 volts that adds oxygen that gives it more powerful antibacterial properties, and is safer since it uses less silver, which would prevent “blue skin” argyria.  Normal colloidal silver that you can make at home with 30 volts works to kill bacteria by disrupting the oxygen metabolism of the cell wall, killing bacteria with oxygen.  The market for safe antibiotics is in the multi Billions of dollars.I own a few shares of CFTN.PK.KBR.V
(604) 669-2251
28 mil shares fully diluted
@ share price $.75 x .77 = US $.58
$16.17 mil MC 
30 mil oz. silver resources indicated and inferred
540,000 oz. gold x 10 = 5.4 mil “silver equiv.”
$16.17 mil MC / 35.4 mil oz. = $.46/oz.
You get “approx” 11.17 ounces in the ground for 1 oz. silver’s worth of stock.TM.V / TUMIF.PK
Nick Nicolaas IR (604) 657 4058
16.2 fully dilutted shares (Oct. 21, 2003)
@ share price .92 CAN (x .77) = $.71 US
$11.47 mil MC
20 mil oz resource up to 50 million oz. silver potential but needs to be explored and drilled. 
500,000 gold resource x 10 = 5 mil oz. silver equiv. 
Debt free, 2 projects in Mexico.
$11.47 mil MC / 25 mil oz. = .45  ***I’m using this number***
$11.47 mil MC / 50 mil oz. = .21  
You get “approx” 11.19 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments:  I’ll consider the 50 mil oz as “exploration potential”.  Tumi is focused on becoming a premiere junior silver explorer.  Doing active drilling to prove up their projects and increase “resources”.  Nick Nicolaas really understands the silver story, beliving silver has much greater appreciation potential than gold.SSRI
40 mil shares (Oct. 2003)
@ share price $7.15
$286 mil MC
debt free, cash: $10 mil
not mining or producing
15 silver properties
measured and indicated resources totaling 300.4 million ounces of silver 
plus inferred resources totaling 366 million ounces of silver = 666 mil oz. 
2.2 mil oz. gold. Silver equiv = 22 mil oz. silver. (22+666=688 mil oz.) 
$286 mil MC / 688 mil oz. = $.42/oz.
You get “approx” 12.36 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments:  SSRI has the largest market cap this far down the list, which makes it a more attractive target for people with larger amounts of money to invest.SSRI continues to add to reserves, either through exploring, or through acquisitions.  This company seems to really understand the silver story, and helped to educate me as an investor. ADB.V
604 628 5642 
Curt Huber– Business Development
26.2 mil shares fully diluted (as of Oct 7th., 2003)
+ up to 5.2 mil shares in private placement of Oct 17, 2003
31.4 mil shares to possibly be fully dilluted. 
@ share price $1.38 CAN x .77 = $1.06 US
$33.36 mil MC
–owns an option to earn 70% interest in “Miera San Jorge’s Monte del Favor property in Mexico”
“An historical resource estimate based on underground sampling at Monte Del Favor is reported at 17 million tonnes grading 0.85 g/t gold and 224 g/t silver for a contained 123 million ounces of silver and 460,000 ounces of gold.” “While this resource estimate is not fully 43-101 compliant, the Company considers that it provides a conceptual indication of the potential of the property.”
460,000 x 10 = 4.6 mil “silver equiv”.
127.6 mil oz. x 70% interest = 89.3 mil oz.
$33.36 mil MC /  89.3 mil oz. = $.37/oz.
You get “approx” 13.75 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments:  Prior grades hit 2-5 kilos silver/ ton. (2000-5000g/ton. 70-176 oz. ton)  Very high grades.  The project was never properly drilled with modern methods.Admiral Bay acquired this option to own a 70% interest in this silver property in June, 2003, and the acquisition did not impact their stock price at that time at all.  Previously, they were a gas company, and they still have this other gas project, which may be more than half the intrinsic value of the company according to Curt Huber, who understands the silver story as expressed by Ted Butler and David Morgan.   My valuation method, obviously, does not give any value for their gas project, which therefore needs to be factored in as a “bonus”.They are actively digging now, building a road and uncovering mineralization areas, and tracing surface veins. They will be drilling before the end of October, spending $500,000 before the end of 2003.  They have $2 million cash in the till. SVL.V / STVZF.PK
17.8 mil shares 
@ share price $1.40 CAN x (.77 US/CAN) = $1.08 US
$19 mil MC
Indicated resources of silver 30 mil oz. (SOZ.)
Projects in Honduras.
*** discovery adds silver*** (perhaps 40-100 mil oz.) see below
new silver totals are projected to be: 70 – 130 mil oz.
$19 mil MC / 70 = $.27/oz.  
You get “approx” 18.75 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments: Now, whenever there is a range like that, it means those are ounces they need to drill to prove up.  And drilling costs money, but does not generate revenue like mining.  They are “exploring” those.  They are not like “inferred resources” ounces, which, although the least certain category, are more certain than this range number. There was a discovery that the company found and wrote and told me about, that they are now working on.  Plus, their reserves are potentially “open pitable” which reduces costs.Every silver company out there always has “more silver property” that potentially has “more silver in the ground” that they “need to explore”.  So every company has a “silver bonus” that’s not included in their oz. reserve figures.  But exploration is risky, and costly.  It’s why metals are precious.DNI.V
56,422,426 shares outstanding 
@ share price $.30 share x .77 = $.23
$13 mil MC
*** Dumont still needs to raise and pay several million to clifton for 50% of the project.
$13 mil MC / 52.5 million oz. = $.25/oz.
You get “approx” 20.71 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments:  Clifton’s JV partner.MAI.V / MNEAF.OB
IR Tel: (604) 689-7017
37 mil shares outstanding on February 5, 2003
@ share $.45 CAN x .77 = $.34 US
$12.8 mil MC
company says “55 mil silver equiv. oz.”  –Note, I do NOT know what that means!  But I do know they are counting gold, or copper, or something, as silver.  How much is gold or copper, I don’t know.  But I do know this:  Gold is NOT silver.  And I calculate gold as silver, differently than others.  I use 10:1.  They might use 70:1.  So be careful, and do more research.  Nevertheless, I’ll use the number to see if it is in the ballpark.  (Got to start somewhere)
$12.8 mil MC / 55 mil = $.23/oz.
You get “approx” 22.05 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments: I don’t know how much of the 55 mil oz. is gold, or copper or other minerals, which I value differently.  So, I’m really not sure how this company would be priced otherwise.ECU.V 
77.1 M shares 
@ Share price .14 CAN (x.77 US/CAN) = .108
$8.3 mil MC
Reserves and Resources: 41 mil oz. silver
Gold equivalents 712,000 x 10 (from the 70:1 silver/gold ratio) = 7.1 mil silver equiv… 
(new gold to silver value remember, see the top of this article) 41 mil oz. + 7 mil oz. = 48 mil oz.
$8.3 mil MC / 48 mil oz. silver equiv. = $.17/oz.
You get “approx” 29.68 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments: Half the current value is in gold, not silver. If the gold was counted as 70:1, instead of 10:1, the “price” would be about 57% of the price now, or 43% off.ASM.V / ASGMF.PK
604 682-3701
David Wolfin
6.9 mil shares
@ share price $1.58 CAN x .77 = $1.22 US
$8.4 mil MC
from: –in 1997
“How Much Silver Does Avino Have?”
“Operations at Avino’s silver mine in Mexico are both open-pit and underground. I examined the reserves and interpolated the tonnage into silver ounces as follows: 28-million ounces proven; 50-million ounces probable and 27 million ounces possible.” (Not all are 43101 compliant reserves & resources.–that is an old, third party report.)
–focus is on being silver company. A plus.
= 28 + 50 + 27 = 105
Avino owns 49% of that, or 51.5 mil oz.  
-“not considered reserves under the new Canadian National Policy 43-101”
$8.4 mil MC / 51.5 mil oz. = $.16/oz.
You get “approx” 31.53 ounces in the ground for 1 oz. silver’s worth of stock.Additional notes: Mexican mining law once stated that a controlling interest had to be owned by Mexicans, which explains why they only have a 49% interest.  That they don’t have a controlling interest is a minus. This law has changed. The mine was operational until the mine went into temporary closure in November 2001. So there is in place an existing mine, with working infrastructure, which is a bonus.  There is a need for drilling in order to test the potential that was stated in the feasibility study.I own shares of ASM.V.SRLM.PK
7 mil shares  
@ share price $6.60
$46.2 mil MC
~185 mil oz. reserves + resource, Sunshine alone
Quote from:
“The prior operator last estimated the mine reserves at 26.75 million ounces of silver, 10.36 million pounds of copper and 7.05 million pounds of lead (or approximately 28.85 million ounces of silver-equivalent), as well as an additional resource of 159.66 million ounces of silver. “
~100 mil oz. other properties: the 10 sq. miles around the 1/2 sq mile of the Sunshine (rough guess–needs to be explored) *** I use this number*** even though–these extra 100 mil oz. are in the “explorer” category.  They need to be drilled and found, although I’ve heard of estimates as high as 400 mil oz. total for SRLM.PK
$46.2 mil MC / 285 mil oz. = $.16/oz.  
You get “approx” 31.70 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments:Sterling Mining acquired the Sunshine mine. Sunshine was one of the big three: Hecla, Couer, & Sunshine. Sunshine went bankrupt. Sterling got the property a few months ago cheap, because they were quick & willing to pay cash. Other buyers wanted to do a full study before making an offer. This company’s share price went ballistic as a result. But the company is still way undervalued. Just do the math, people. I own a substantial share of SRLM.PK There were a few great articles written lately for SRLM. See the company web site, above. The best factors, I feel, are as follows:
1. The Sunshine mine is an existing mine that was mining at a profit. The company went bankrupt, not the mine. So there will be no great capital costs for start up, only minimal costs. 
2. The Sunshine sits on 1/2 sq. mile, and was never fully explored. Sterling Mining owns 10 square miles of property surrounding the Sunshine, right in the heart of silver country, the location of CDE and HL, the other two big companies at the top of this list. 
3. The management of Sunshine understands the silver story. They are on a mission to acquire distressed silver properties at today’s cheap prices. 
4. The additional share offering, if it closes, could mean 8.5 mil shares, which would mean a market cap of $37 mil. That’s a minus.  $37 / 260 = .14/oz., which is a little higher price.  Beware of additional share issues causing shareholder dilution. Do not confuse SRLM with SSMR. SSMR is the Sunshine mining company, which went bankrupt.  SRLM acquired the Sunshine mine.  If you want to buy the Sunshine mine, you buy Sterling Mining Company, SRLM.I own shares of SRLM.PKEXR.V / EXPTF.PK
Dr. Harlan D. Meade, President and CEO
TOLL-FREE: 1-877-682-5474
81.6 mil shares fully dulted. (As of oct 17th)
@ share price .27 CAN x .77 = $.2079
$17 mil MC
Mostly a base metals company.  Zinc.  Also has some silver.  Company president estimates 105 mil oz. silver.
$1.2 mil CAN capital in the til
no debt.
$17 mil MC / 105 oz. silver = $.16
You get “approx” 31.81 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments:  Significant zinc bonus.  Smelter credits are estimated at about 60% zinc, 25% silver, 10% gold and copper, and the rest, other minerals.  My method of valuation puts a value on the silver only, not the rest, so this is a better value than my number shows.I own shares of EXR.VFAN.TO / FRLLF.PK
Erick Bertsch
(604) 684-6365
43.8 mil shares fully diluted (At Aug 31, 2003)
@ share price $.44 CAN x .77 = $.34 US
$14.8 mil MC
Exploration and development in Mexico.
See also (Hunter-Dickinson) 
On 4 sulphide deposits out of 16, 29 mil ton grading 89 grams silver/t and 1.57 g gold/t.
Conversion: 89 grams x .0353 oz/gram = 3.14 oz.
RE: those 29 mil tons, they “anticipate increasing resources to 50 mil tonne range…”
3.14 oz. x 29 mil tons = 91 mil oz. silver
1.6 mil oz. gold x 10 = 16 mil oz “silver equiv”.
Total: 107 mil oz. silver equiv. 
$14.8 mil MC / 107 mil oz. silver equiv.  = $.138/oz.
You get “approx” 37 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments:  This stock was a $3/share stock in 1998.  Look at the long term chart.  Talk about “Buying low!”Nothing done or drilled on the property since 1999.  Why not?  Because of low zinc prices: 46% of the price of the metals was in the zinc before prices crashed…  (This one reminds me of Canadian Zinc.  They think they are a zinc company.)  The largest componant today is gold, which was surprising to Eric, the IR guy I spoke with.  About 1/3 is in silver now.At today’s low metals prices:  
2% x 2000 lb = 40 lbs zinc x $.37/lb =  $14 for the zinc  (.37 to .50 lb zinc.)
3.14 oz. x $5.15 = $16 for the silver.
.055421 oz. x $385/oz. = $21 for the gold
(Assuming 100% metals recovery–which is not likely to be the case.  It may range from 60% to a higher percentage, depending on extraction methods used and the particular mineral targeted, which constantly change with technology advancements, and price changes in the metals.  By the time a mine like this gets running, perhaps in 5 years or so, things may change to allow even greater metal recovery.)Speaking with the company, they think reserves of ore could be 50 mil tonnes OR MORE, but that they really don’t know, and want to issue conservative estimates.I own shares of FAN.TO.MNMM.OB 
7.5 mil shares 
@ share price $4.40
$33 mil MC 
261 mil oz. silver resources.  Previous drilling spent over $100 million drilling the property.   
$33 mil MC  / 261 mil = $.126/oz.
You get “approx” 41 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments: Mines Management owned 10% of the rights to their property in Montana. The other 90% owner, Noranda, simply gave up on the property and walked away from their mining claim due to “perpetually” low silver prices and political concerns.   That explains the rocketing share price.  So, the MNMM group got 90% of the rest of the property FOR FREE!–the value of which, and the nature of this transaction has just barely begun to be understood by the market, given the low relative price.Their property also has about 1/2 the value (at current prices) in copper, 2 Billion pounds of copper, and 261 mil oz. of silver.  Doing the math: 261 mil oz. silver x $5.25/oz. = $1.3 Billion. 2 Billion lbs copper x .85/lb. = $1.7 Billion. Amazing assets in the ground for such a small market cap. Three Billion in asset value / 30 million in market cap, means you are paying 1/100th the price.  Surely, the profit will be greater than 1% of the asset value, over the life of the mine.They do not have an active working mine–Which is a minus.  They will need to raise capital to get a mine going.  Noranda had several estimates for the cost to build a mine and mill, around $250 million.  But it could be more or less depending on how ambitious or economic they decide to do things. Regarding environmental concerns:  Noranda had a fully approved Environmental Impact Statement (EIS) that led to successful project permitting, so environmental concerns were not a factor in their departure in 2002.I own shares of MNMM.OBUNCN.OB
Ray Brown, 530-873-4394
70 mil shares
@ .027 cents/share
$1.89 mil MC
–lease of property will expire June 1 2004, need to raise significant money.
49 mil oz.
$1.89 mil MC / 49 mil oz. = .043/oz.
You have an expiring lease on “approx” 133 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments:  This one seems risky, whether or not they will be able to raise the money to maintain the lease.——————————————————
Explorers deserve their own category, since they cannot be valued by my method of looking at reserves and resources of ounces of silver in the ground.  We do not know how many oz. they might have. They are exploring for that. But, given their market caps, and given what I feel is a good price for a silver company of about 30 cents per oz. in the ground, I can calculate how much silver they had better find, in order to justify their current stock price. This valuation method might also help those who have a better feel for how much silver they might find than I do, to value the company. This list, although at the bottom, in no way indicates that these companies are more highly valued than companies listed above. It is also difficult to categorize a company as an explorer, since all silver companies always hold more silver properties that need to be explored.  Higher grade deposits, obviously, could be valued significantly more than my arbitrary number of 30 cents/oz.(The order is by largest market cap first, not by “comparative value”.)IMR.V / IMXPF.OB
43.4 mil Fully Diluted shares 
@ share price $1.69 CAN x .77 = $1.30  U.S
$56.4 mil MC / (.30/oz. “Arbitrary Jason Hommel good value” factor) = 188 mil oz. that they had better find to justify the current Market cap. Additional comments:  IMR.V has come down significantly in value in the last month, from a high of $2.54.  I suspect this series of articles may have had something to do with that, as several people wrote and told me they were selling IMR.  I guess a lot of people bought IMR when it was the “latest exciting silver discovery”, and pushed up the value too much, before doing their own calculations. Some may say that my valuation method is unfair.  I agree, it may be unfair.  There are a lot of factors to consider, besides the number of “oz. in the ground” such as high grades, which IMR has discovered and is exploring to prove up. If my article unfairly profiles a stock, and you know better, then this should open up an advantage for you to go ahead and buy the stock, knowing that in the end, profits will determine the ultimate value at the end of the day.All I have done, is show the size of the market cap, and show the implications of “comparative value”.This explorer has found bonanza high grades, which many people consider to be an outstanding benefit, and they are willing to pay much more for such high grades, which have a much higher chance of being able to be mined at a significant profit in today’s environment of low silver prices.  Some people say the high grades are far more important than how many ounces are found, and they more highly value this factor than my arbitrary “good value” number of 30 cents/oz.  In other words, they might be willing to pay up to 50 cents or a dollar for such high grades, and they may be worth that, and they may be right.(See also SPM.V below, they are next to IMR.V, and at 1/10th the price.)VGZ VGZ.TO
@ share price $4.34
Market Cap: 55.4M
VGZ is a gold exploration company with 8 projects.
(total measured, indicated, inferred)
8. Paredones Amarillos 2 mil oz. gold 
7. Mountain View .47 mil oz. gold 
6. Maverick Springs 1 mil oz. gold (further drilling in 2003)
5. Long Valley 1.7 mil oz. gold (plus signicant “exploration potential”)4. Hycroft. 1 mil oz. gold ( plus 6 mil oz. gold + 150 mil oz. silver potential)
3. Hasbrouck-Three Hills .74 mil oz. gold (excellent exploration potential)
2. Guadalupe De Los Reyes .5 mil oz gold (includes significant silver values)
1. Amayapampa .6 mil oz.
All total gold: 8.01 mil oz.
All total “exploration potential”: 14 mil oz. gold + 150 mil oz. silver.
Counting gold 14 mil oz x 10 = 140 mil oz “silver equiv” 
All total “silver equiv.” “exploration potential” = 290 mil oz.
Market Cap: 55.4M / 290 mil oz. = $.19/oz.
You get “approx” 26.9 ounces in the ground for 1 oz. silver’s worth of stock.Additional comments:  I am severely undercounting the gold with my method of counting an oz of gold as only 10 oz. silver.  Consider this one has a significant “gold bonus factor”.  Almost half the oz. are gold.  Much of the numbers for this one are “exploration potential” or indicated or inferred resource.It was also difficult to determine whether or not to count this one as an explorer or not.  To include the silver, I had to count them as an explorer.  They have 8 million oz. of gold in the “inferred and indicated resource” category, which is more certain that “exploration guesses”.MCAJF.PK
376 mil shares
@ share price $ .115 
$43 mil MC
“Total Inferred Resource is 34.5 million ozs silver but the district is unexplored for epithermal silver and exploration to date suggests a district potential of 50 to 100m ozs Ag or perhaps much more.” –“Macmin is a silver focussed company” The Texas Silver Project has in-ground resources of 44.5Moz of silver equivalent
$43 mil MC / 50 mil oz. = $.86oz. 
$43 mil MC / 100 mil oz. = $.43oz.  ***using this number*** since we are counting these as explorers in this categorgy.
You might get up to 11.88 oz of silver for one oz silver’s worth of stockAdditional comments:  Several people wrote to me about macmin this week, and gave me the following url: / CUEAF.PK 
28.3 million shares fully diluted (assuming all the options and warrants are exercised, which are NOT all “in the money”) 
@ share price $1.98 CAN (x .77 US/CAN) = 1.52
$43 mil MC
Proven & Probable: NONE! (explorer).
Speculated reserves ~ 100 – 250 or more mil oz.?????
$43 mil MC / (.30/oz. “Arbitrary Jason Hommel good value” factor) = 143 mil oz. that they had better find to justify the current Market cap.
$43 mil MC / 250 mil oz exploration potential = $.172/oz.
You might get about 29.88 oz. silver for one oz. silver worth of stock.Additional comments: *** I wrote an article on Cardero in January, 2003. 
See Cardero has three properties in Argentina; actively working on two:  Chingolo and Providencia.  Chingolo was just measured as twice as large as previously thought.  They are trying to prove up these properties.  This one also has potentially high grades in several very large conglomerate deposits that can be mined at a profit today.  Their property at Providencia was an active mine, but only a few tons/day.  But they hope to make a large open pit project out of the main deposit, processing perhaps a few thousand tons/day.High grades are very important in today’s environment, especially if you can buy them cheaply.They are also acquiring more silver properties, which is another bonus.  This is an aggressive silver company.  More properties help to alleviate the risk of an explorer.I own shares of CDU.VMAG.V
28 mil fully diluted shares
@ share price $1.70 CAN x .77 = $1.31 US
$36 mil MC / (.30/oz. “good value” factor) = 122 mil oz. that they had better find to justify the current Market cap.
–near Quaterra and Western Silver.TVI.TO / TVIPF.PK
Dianne (IR) Phone: (403) 265-4356
257.1 Million shares fully diluted
+87 mil shares & warrants as of Oct. 7th, 2003
= 344 mil fully diluted
@ share price $.095 CAN x .77 = $.073 US$25 mil MC
>From p. 1 of 2nd qtr 2003 report: “The company has a policy of not hedging or entering into forward sales contracts.”
Cash flow positive. !!!  
14 projects in the Philippines.
Producing a dore bar of 96% silver and 4% gold from Canatuan project with the following:
827,000 tonnes 3.98 (au)g/t 141.1(Ag)g/t = .14oz/t gold + 4.98oz./t silver
1,497,000 tonnes 1.26 (au)g/t 58.4(Ag)g/t = .044oz/t gold + 2 oz./t silver
= 115,780 oz. gold + 4,120,000 oz. silver
= 66,000 oz. gold + 3,000,000 oz. silver
Total silver = 7.1 mil oz silver
Total gold = 182,000 oz. gold x 10 (@10:1) = 1.8 mil oz silver equiv.
Total silver equiv (Canatuan) = 8.9 mil oz.
+ 2.5 % royalty on “Rapu Rapu” that should be worth about $1 million per year starting within 9-12 months.  (a cash source for an explorer is a big plus)
+ they own a drilling company with 20 rigs.
+ they have a “foot in the door” in China.
+ many other promising exploration properties in the Asian Pacific.
$25 mil MC (.30/oz. “good value” factor) = 83 mil oz. that they had better find to justify the current Market cap.Additional comments:  This company has many properties in the Philippines.  This one looks interesting, but there is just too much unknown for me at this point for me to be able to quantify.  So, they are an explorer, listed in terms of market cap size.  The bonus is they are a producer, and likely are cash flow positive, which are both extremely rare for an explorer.  MMGG.OB
TELEPHONE: 208-665-2002
14 mil shares fully diluted (Oct 23, 2003)
@ share price $1.60 x .77 = $1.23 US
$17.25 mil MC
zinc & silver
insiders buying on 9-10-2003
very high grades: 11.8% zinc.
Sierra Mojada is a Silver District
up to 4 Billion pounds zinc.
$17.25 mil MC / JH value .30/oz. = 57 mil oz. they need to find to justify current market cap.EPZ.V / ESPZF.PK
Esperanza Silver Corp
fully diluted 20 million shares
@ share price = $1.12 CAN x .77 = US$.86
$17.24 mil MC / (.30/oz. “good value” factor) = 57 mil oz. that they had better find to justify the current Market cap.  “Esperanza Silver Corporation is solely dedicated to the identification, acquisition and exploration of new silver projects.” Additional notes:  Management involved with SSRIIAU.V / ITDXF.PK
(416) 368-4525
30 mil shares
@ share price $.65 CAN x .77 = .50 US 
$15 mil MC
Company’s exposure is about half to gold, half to silver in several projects.
Joint Venture with BHP Billiton focused on “Cannington” style silver deposits using proprietary BHP Billiton data.
(all figures are “exploration potential”)
El Salvador – 38.5 mil oz.
Argentina – 6 mil oz. 
Total: 44 mil oz. silver
Total gold: ~690k oz.  x 10 (10:1 ratio) = ~ 6.9 mil oz. “silver equiv”
Total: 53 mil oz. “silver equiv”. (exploration potential or indicated or inferred, not reserves)
$15 mil MC / 53 mil oz. = $.28/oz.
Hopefully, you get 18 ounces in the ground for 1 oz. silver.Additional comments:  Their “exploration potential” lies within the “arbitrary good value” range.  This explorer/developer tends to focus on good grade, mineable deposits, and form partnerships with other companies to access great information, and expects to produce silver & gold within 2 years, by 2005.  They also took the time to contact me, after having seen this silver report. Since this company is about half gold and half silver, the 10:1 ratio really cuts down the “silver equiv” numbers, so keep in mind the “gold bonus” factor here.  But it’s like that with a lot of the companies on this list, so keep that in mind, and do your own math if you want to use the 70:1 ratio.NPG.V / NVPGF.PK
33 mil shares fully diluted
+ 1 mil shares options for executives
= 34 mil shares as of October, 2003
@ share price .82 CAN x .77 = .63 US
$21.46 mil MC
Amador Canyon Silver Project: 50-250 mil tonnes
silver grades average 4 oz. sil/ ton in the deposit
= 200 to 1000 mil oz. silver????? –very speculative at this point. Drilling needs to be done, scheduled $13.2 mil MC / (.30/oz. “good value” factor) = 44 mil oz. is all they need to find to justify the current Market cap.
$21.46 mil MC / 200 mil oz. = $.107/oz.
$21.46 mil MC / 1000 mil oz. = $.021/oz.
At $.11/oz.,
The inverse: you “might” get 46 ounces in the ground for 1 oz. silver. 
At $.02/oz.,
The inverse: you “might” get 257 ounces in the ground for 1 oz. silver.Additional comments: Explorer in Nevada. They do not really know how much silver they might they have in the Amador Canyon project. Exploration is risky.  They are doing drilling this fall, 2003, as they just did a $2.5 million private placement. The Chariman, David Hottman, says that 90% of the value of the company is in gold, NOT silver, and yet, I’m buying this company for the silver value only, and as if the gold componant was worth nothing. (The gold projects are a free bonus, in my book, and help to alleviate the risk of this explorer.) He has 10 gold projects, and one silver-but it may be big. On the website, for David Hottman’s bio, it says he was a founding member of Eldorado gold. “During his tenure, Eldorado’s market capitalization grew from Cdn $7 million in 1992 to a peak of Cdn $781 million in 1996.”  Please note, exploration is risky, and costly. Two weeks ago, the company proposed stock options for “for directors, officers, consultants and employees”.  If they now believe the share price to be headed much higher, they would want to lock in options at this low price. Investors have to be aware of this kind of share dilution.  This one is 1 million shares.  Thus, it increases the market cap, increasing the “cost”, and reducing percentage ownership for existing shareholders.  But this still looks like a good deal.  
I own shares of NPG.V HOLMER GOLD (HGM.V)
Phone: Toll-free tel. 1-877-859-5200
@ share price $.35 CAN x .77 = $ .26 US
$10.6 mil MCAdditional comments: silver in cuba. (final feasibility study completed by Rescan-Hatch) gold in Timmins, Ontario.NJMC.OB
15.7 mil shares
@ share price $.51 US
$8 mil MC / .30 “good value factor” = 26 mil oz. they need to find to justify a value price.
 New Jersey Mining Company (NJMC) is engaged in exploring for and developing gold, silver and base metal ore reserves in the Coeur d’Alene Mining District of northern Idaho also known as the Silver Valley – one of the world’s richest silver districts.MMG.V / MMEEF.PK
25.6 mil shares outstanding (3q 2003 report June, 2003)
@ share price $.51 CAN x .77 = $.39
$10 mil MC /.30 “good value factor” = 30 mil oz. they need to find to justify a value price. QTA.V  QURAF.PK
Jay Oness Toll Free: 1-888-456-1112
36.4 mil shares Sept 2002
+ 3 mil undefined “units” Oct 2003
41? mil diluted???
three main properties in North America
@ share price .22 CAN x .76 = $.169 US
$7 mil MC ?EXN.V 
2002 annual report: 
48 mil shares outstanding 
@ share price $.165 CAN x .77 = $.127 US
$6.09 mil MC
indicated = 63,400 t x 2738 g/t x .0353oz./g = 6.1 mil oz. silver
inferred = 2100 t x 1,433 g/t x .0353oz./g = .1 mil oz. silver
“gross in-situ value of mineralization is $31.4 million.” 
$6.09 mil MC / 6.2 mil oz. = $.98/oz.   
You get 5.22 oz. silver for one oz. silver worth of stock.
Additional comments:  (Expensive, unless they find more.)  “Excellon …is exploring and developing”…. “a Bonanza grade Silver deposit in Mexico.” GNG.V / GGTHF.PK
+ 4 mil warrants
= 32.4 mil shares fully diluted
@ share price $.30 x .77 = $.23
$7.48 mil market cap /.30/oz. “good value factor” = 25 mil oz. they need to find to justify a value price.I own shares of GNG.VAdditional comments:Silver Explorer in Mexico in the the Sierra Madre mountains: Uruachic.
Doing active drilling on their silver property, Las Bolas, “in a month” (as of Oct. 7th).  They hope to take a collection of old silver mines and make them open pittable.  They have some very high grades from chip samples from the tunnels, ranging from 100g to 500g all the way up to around and over 1000g/ton of silver.The largest placee in the recent private placement was Sprott Asset Management, run by John Embry.>From
“A major US television channel is currently producing a documentary on gold exploration, which will feature the Company at work on its Las Bolas property in the Sierra Madre mountains of northwestern Mexico. A film crew from the production company will be on site in October. The Company is pleased with this development, which will provide continent wide exposure at essentially no cost.”(Quite frankly, articles like this one on the internet may give companies better exposure than a TV show, because this is targeted towards investors.  Then again, I might be wrong.  We’ll see.)SPM.V
7.4 mil shares issued
@ share price .87 CAN x .77 = $.67 US
$4.9 mil MC /.30/oz. “good value factor” = 16.5 mil oz. they need to find to justify a value price.
Explorer: property next to IMR.V in Argentina, another explorerSHSH.PK
12 mil shares
@ .24 
$2.88 mil MC /.30/oz. “good value factor” = 9.6 mil oz. they need to find to justify a value price.
In Cour d’Alene, near CDE, HL, & SRLM.PKROK.V
14.3 mil fully diluted (July 15, 2003)
@ share price .17 CAN x .77 = .13
$1.87 mil MC /.30/oz. “good value factor” = 6.2 mil oz. they need to find to justify a value price.
no website
Phone:Magnus 1(604) 261-6040
6.924 million shares out (fully diluted)
@ .21/share x .77 = .16
$1.17 mil MC
Tiniest market cap on the list.
$14.5 mil MC
“Itronics Inc. is the world’s only fully integrated photochemical recycling company. It provides photochemical waste collection services, recovers and refines silver from the photochemicals,”Additional comments:  Itronics is not an explorer, and not a miner, and has no reserves.  As such, it is extremely difficult for me to value this compared to other silver stocks.  I just don’t know how to value this one.  —————————————————————–
Final Category: Silver stocks FOR YOU and I TO RESEARCH further:   I strongly recommend you try to “get ahead of me,” and research these stocks to see if I left out any great values.  I probably did.  I simply did not have time, or could not yet find information (without using the telephone) on all the three key figures needed to get the “price per oz.” in the ground.  You need:  number of shares fully diluted x share price to get the market cap.  Then, you need an estimate of the oz. in the ground.   Usually, I’ve been finding the oz. in the ground resource estimates right off the company webpages, and I get the number of shares by looking for it burried in the financial statements like the quarterlies or annual reports, which are also usually right on the company webpages.  Have fun this week!III.TO  IPMLF.PK
Sabine Goetz, Investor Relations – 604.488.2657 
Fully Diluted  24,206,764
@ share price $3.85 x .77 = $2.96
$71.7 mil MCAdditional comments:  III.TO has gone up 1000%, no typo, up one thousand percent, up by a factor of 10, in the six months from Spring to October, 2003, most in the last month or so since September!  And I completely missed the run up.  Shows how little I know.  I still don’t know how much silver or other metals they might have…!!!EZM.V  EZMCF.PK
Fully Diluted: 224,194,196
@ share price .25 CAN x .76 = $.19
$42.5 mil MCMountain Boy Minerals Ltd (MTB.V)
TEL: (250) 636-9283
@ share price .30
high grade samples:  3640 g/T Ag to 45.5 g/T AgMascot Silver Lead Mines (MSLM.PK)
“Though we have reserves and could conceivably mine them, it frankly makes no sense to do so at current prices. … The end of the silver bear will bring a number of the now-dormant small companies back to life…”Malachite Resources NL (MAR.AX)ROSS RIVER MINL (CDNX:RRM.V)Silver Buckle Mines Inc (SBUM.PK)Fischer-Watt Gold Co Inc (FWGO.OB)Metropolitain Mines Ltd (MEMLA.PK)Silver Surprize Inc (SLSR.PK)Standard Silver Corp (SDSI.PK)Horn Silver Mines Co (HRNS.PK)Holmer Gold Mines Ltd (HOGOF.PK)Golden Phoenix Minerals Inc (GPXM.OB)Teuton Resources Corp (TUO.V) TEUTF.PKHOLMER GOLD (HGM.V) HOGOF.PKGoldSpring Inc (GSPG.OB)Andean American Mining Corp (AAG.V) ANMCF.PKMVRM.OBReports such as this usually cost an annual subscription such as $100 – $300 or so.Articles like this one, that present opportunities as good as these, can tend to move the markets in these stocks. So, be careful when buying. If you place any market orders at the open for any of these small stocks, you might end up buying at prices that are significantly higher than you intended.  Limit orders might be better, but then, you run the risk of your order not being filled if the stock price exceeds your limit.  And bid / ask spreads such as 15% on small cap silver stocks are not unusual.  Markets can especially be moved given the wide readership of I’ve seen markets moved even by small private newsletters such as and (I subscribe to both), which reach much smaller numbers of people than Some of these stocks can move up 15%, 30%, 50% or even over 100% in a single day. Thus, valuations can change very, very quickly. So, be careful, and re-check the numbers if the prices move up. Do your own math.Also note, the majority of these companies have an emphasis on silver.  Most silver is produced as a by product of other mining, like lead or zinc or copper mining.  Those companies that primarily produce other minerals are not featured in this report.  This also helps to explain and prove, that silver is undervalued.  If silver miners cannot mine silver profitably, and this report shows that to be true, then something is wrong with the silver price.  It must go higher.More Information Sources on Silver:Book recommendations:”Silver Bulls” by Paul Sarnoff. Details the 1980 rise and fall of silver. Written in 1980.”Silver Bonanza” by James Blanchard. 1993. Outlines the case for silver.”The definitive guide to North American mining stocks” by Doug Casey & Jerry Pogue available thru & Jerry Pogue is a director of Mines Management. Doug Casey has been #1 booster of mining shares since 1978 publication of “Crisis Investing ” and 1982 “Strategic Investing” and 1992 “Crisis Investing for 90’s”The three best sources for commentaries on the silver market that I’ve found on the internet today are David Morgan, Ted Butler, and a report by “Kazvestor”.  I subscribe to, and read, David Morgan’s newsletter, and I recommend it.Some of the reserves and resources listed for the above companies, especially the juniors, may have been drilled out and calculated based on old regulations, before the new 43101 compliance rules were put into effect.  (Not all are 43101 compliant reserves & resources.)For information from the SEC on how to protect yourself from a “pump & dump” scam, see the following:Pump and Dump Schemes
Pump&Dump.con: Tips for Avoiding Stock Scams on the Internet
Microcap Stock: A Guide for Investors
Internet Fraud: How to Avoid Internet Investment Scams
Tips for Checking Out Newsletters Hommel
Jasonhommel@yahoo.comThe Silver Stock ReportFinal Disclaimer:  I have not received any compensation from any company for writing up my weekly report on “Silver Stocks–Comparative Valuations,” neither cash, nor shares, nor options, nor any other sort of compensation.  Within the report, I declared my ownership of each company that I own. To repeat, I own shares of the following 10 silver stocks: CZN.TO, MNMM.OB, SRLM.PK, FAN.TO, CDU.V, NPG.V, ASM.V, CFTN.PK, GNG.V, EXR.V.  I am not short any companies, and I hold no short positions, no puts, no calls.  I reserve the right to buy or sell any stock at any has not received any compensation for publishing this report. At time of publication, has ownership in Vista Gold and Silver Standard.
— Posted Sunday, October 26 2003