Silver Stock Report #18

Silver Stocks–Comparative Valuations  
Weekly Report #18
by Jason Hommel
The Silver Stock Report

Friday, Jan 16, 2004

This week’s report lists about 90 silver stocks.  There are 30 silver stocks that list reserves, resources (and exploration potential.) which I calculate by using my “ounce in the ground” forumula.  There are 40 explorers.  There are about 22 additional “silver” stocks with incomplete information. Additions & Changes from last week are in bold. 

If you are an Accredited or Sophisticated investor and want information I may find out about private placement opportunities in some of the very best silver stocks in my opinion, (This is not a solicitation for any stock, and I’m not brokering any securities) email me with PP in the subject field:  

I can’t tell you exactly which silver stocks to buy several reasons.  First, I’m not your broker.  Second, too many people ask.  Third, if I told you what I was buying as I was buying it, you’d buy, and push the price up against me.

The best I can do is tell you where I have already put my money.  I offer a monthly “look at my portfolio”.  Try it for a month, and see if it works for you.  I do not issue recommendations, and I don’t list number of shares or the size of my portfolio, but I will show the top investments in my portfolio, by rank, updated monthly.

To read about my religious bias, see my other website, There are two essays near the top of the page that explain why I believe the entire world will return to using gold and silver as money again before the end times.  Hint, see Ezekiel 38.

If you want to receive an email notice of when and where this FREE weekly report is published, sign up at  Anyone who signs up will also get a FREE e-book that explains the bullish case for gold and especially silver.  If you have studied the silver market at all, then the time has come that you ought to be a teacher, and you ought to explain the silver story to all who will listen. is designed to help spread the word. I suggest you email the url to your address book.

Price of silver is $6.30 as of Friday, 2:00 PM West Coast US, which was used to calculate the following figures. The CAN $ / US $ conversion factor is .7699  I will use .77 for ease.  

How to read the following table:
Stock Symbol that works at Yahoo! Finance (Company name) / Silver oz. “in ground”** for 1 oz. silver’s worth of stock. / price change since last week relative to silver price change (and stock dilution, if any) /  additional comments (EXPT is “exploration potential”)   

  1. HL (HECLA MINING CO)                                .42 down –current producer (gold bonus) cash rich.
  2. CDE (COEUR D’ALENE)                                 1.1 even –current producer, (gold bonus) in debt.
  3. IPOAF.PK (INDUSTL PENOLES)                    1.5  even –current producer, mostly family owned.
  4. ECU.V ECUXF.PK (ECU SILVER MINI)           2.2 even –(6.0 EXPT)  –50% gold bonus
  5. MAI.V MNEAF.OB (MINERA ANDES)             2.8  down   –exploring for more silver.  (gold bonus)
  6. SIL (APEX SILVER)                                        3.7 down  –large zinc bonus, low grades.
  7. MFN MFL.TO (MINEFINDERS)                       3.9  down  –significant gold bonus, $35 mil cash on hand.
  8. * CFTN.PK (CLIFTON MINING)                      4 up — (38 EXPT) (colloidal silver patent bonus)
  9. KBR.V KBRRF.PK (KIMBER RSCS)                   4.8 down  A one property company, with exploration potential.
  10. GRS GAM.TO (GAMMON LAKE)                     4.9 down –current producer
  11. * CZN.TO  CZICF.PK (CDN ZINC)                   5.4 down  –large zinc bonus, high grades, low start up costs, great EXPT
  12. PAAS (PAN AMER SILV)                                  5.3 down  –current producer, in debt.
  13. FSR.TO FSLVF.PK (FIRST SILVER)                 5.6 up  –current producer, (not profitable ’03 3rd q.) unhedged
  14. * TM.V  TUMIF.OB (TUMI RSCS)                    5.8 up — (12 EXPT) recent bonanza grade silver discovery
  15. WTZ  WTC.TO (WESTERN SILVER)                7 down   — (30 EXPT) large mine development cost.
  16. MGR.V MGRSF.PK (MEXGOLD RSCS)             8.4 up
  17. ORM.V (OREMEX RES)                                    8.6 down    (36 EXPT)
  18. SSRI (SILVER STD RSC)                                  9.9 down –multi-property company, understands silver story
  19. * SRLM.PK (STERLING MINING)                    10.3 down –(27 EXPT) acquired the Sunshine in Cour d’Alene
  20. FAN.TO FRLLF.PK (FARALLON RSCS)            12.1 down  –(20 EXPT) low grades, silver 1/3; also gold & zinc.
  21. DNI.V DMNKF.PK (DUMONT NICKEL)            15 down  –exploring Clifton’s property.
  22. * FR.V FMJRF.PK (FIRST MAJESTIC)            15  up  —(26 EXPT) silver bonus. Bought a former silver producer.
  23. * EXR.V EXPTF.PK (EXPATRIATE RECS)        15.3 down  –significant zinc bonus 60% zinc, 25% silver
  24. HDA.V (HUSIF?) (HULDRA SILVER)                 15.7 even   –very tiny, no debt, zinc bonus, low start up costs.
  25. * SVL.V STVZF.PK (SILVRCRST MINES)         17.1 up  –(30 EXPT) –(Silver in Honduras) acquiring silver props.
  26. * ADB.V ADBRF.PK (ADMIRAL BAY RSCS)      17.8 down –actively expanding resources. (Huge gas bonus)
  27. CHD.V CHDSF.PK (CHARIOT RSCS)                19.2 down   (explorer, with inferred resources)
  28. * ASM.V ASGMF.PK (AVINO SILV GOLD)       21 down –owns 49% of the Avino+ 4 other silver props. (silver bonus)
  29. * MNMM.OB (MINES MGMT)                          25 down  –60% copper bonus (low grades), start up ~ $250 mil
  30. UNCN.OB (UNICO INC)                                    44 down  –lease expiring on largest property in mid 2004.

* = I own shares

Explorers (by market cap):

  2. TVI.TO TVIPF.PK (TVI PACIFIC) –current producer of a dore silver bar 96% silver, 4% gold
  4. *FCO.TO FCACF.PK (FORMATION CAPTL)  Cobolt (and Sunshine silver refinery)
  5. * CDU.V  CUEAF.PK (CARDERO RSCS) 52-87 “exploration potential”
  6. * AOT.V ASOLF.PK (ASCOT RSCS) — owns percentage of Cardero, CDU.V
  7. MCAJF.PK (MACMIN LTD) 10.5 “exploration potential”
  11. * NPG.V NVPGF.PK (NEVADA PAC GOLD) 35-175  “exploration potential”  (owns 1 silver property, 10 gold properties)
  13. * OTMN.PK (O.T. MINING) 139 “exploration potential”
  14. * MMGG.OB (METALLINE MINE) –zinc/silver (historic high grade silver) (low cost revolutionary oxide zinc process)
  15. IAU.V ITDXF.PK (INTREPID MINRLS) 13 “exploration potential”
  19. MAN.TO MMALF.PK (MANHATTAN MNRLS) –Protests in Peru, and Peru revoking the property rights, hurt the price.
  21. * NBG.V NBULF.PK (NEW BULLET GP)  31 – 86 “exploration potential”
  22. SDR.V (STROUD RSCS) 33 – 104 “exploration potential”
  24. * GNG.V  GGTHF.PK (GOLDEN GOLIATH)  –Historic silver district in Mexico
  35. * CBE.V CBEFF.PK (CABO MINING) –Historic Silver and Cobalt district

* = I own shares
** = “in ground” counts all “silver oz. in the ground” as the same, but they are NOT EQUAL.  Some are more certain and others are more speculative.  Some are higher grades, some are lower grades.  They range from most certain to least certain such as: “proven & probable reserves,” “measured, indicated, inferred resources.”  This 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.)

At, they add 100% of proven & probable reserves, but only 70% of measured & indicated resources, and only 50% of inferred resources.  I don’t do that.  I count them as all the same.

To quickly “tab” down to the company you are interested in, note the symbol. Then hit “control-F” to “FIND” the symbol below. 

WEEKLY COMMENTARY (All new in this section):

This week, I wrote, “Usury Enslaves”.  It’s an article I’ve wanted to write for about 2 years now, because it defines a central problem with our current monetary system, and simultaneously shows why gold and silver will help the economy.  Many other writers attack the debt, but very few identify that it is the usury, the interest on the debt, as being the problem.


Silver is secure, enduring, priceless.  Which is better, silver that you own, or paper in the banks?  The issues are value and trust.  Who do you trust more, yourself, or the banks?  The banks have proven themselves to be untrustworthy, bankrupt, thieves.  Fractional reserve paper dollar banking is a cruel joke from a dying era.  

I went into my local fractional reserve establishment bank, and I asked how much cash I could withdraw without calling ahead first to see if they had the paper available.  At first, they refused to give me that information, and I protested, saying, “What, I won’t know about the inconvenience of having to wait until after I need the money?”  So, the maximum cash anyone could withdraw from my local branch without an appointment was $4000.  If I wanted more than that, I needed to call ahead and give them a day or two, in order to give them time to have the cash shipped in.  Ridiculous! 

Paper money is fraud.  Paper money banking is fraud upon fraud, as they don’t even have the paper to back up your accounts, and they won’t let you withdraw from your “on demand” accounts when you demand!

Here’s some old statistics on fractional reserve banking that I gathered back in 1999.  

In 1999, there was:
$44 Billion in paper money held in U.S. Banks
$250 Billion in paper money held by the U.S. Federal Reserve
$450 Billion in paper money not in circulation (under mattresses & outside the U.S.).
$17 Billion in paper in circulation in the U.S.

At the time, the amount of money in the banking system was about $6000 Billion (M3, money in the banks).  As of Nov. 2003, they have about $8850 Billion in the banks.

So, they had $44 Billion in paper money to back up $6000 Billion in deposits.  

When people begin to wake up to the fraud, when less than 1% of people try to take paper out of the banks in a hurry, there will be a serious problem getting even paper money.

But paper they can print.  How are they going to create the silver as the silver boom continues?  They can’t.

My point is that why would you trust a bank that doesn’t even have the paper they say they owe you, and won’t and can’t give even the paper to you if you ask?  And even if you had the paper, the paper is worthless.  What is paper?  People can print it out on their laser printers if they know how, and unless you have a very good eye, and are paying very close attention, you can’t really tell the difference apart.  Get something secure, enduring, priceless, scarce, and in high demand from industry.  Get silver.

If your business partner was bankrupt, and had a history of lying to you, would you trust him to hold your money for you?  Of course not.  So then why trust the banks?  They have been institutions of fraud since 1933, when they declared bankruptcy (but continued to operate) as gold backing was removed from the dollar.

If you want to be wealthy, you have to be responsible for your own wealth.  Get a few guns, get a safe, get some dogs, and get a security alarm system.  Spend what is reasonable that you can afford to protect your wealth.   

People are writing about a possible “correction” in gold or silver, and they mean they fear prices might go lower.  It’s ironic how the word “correction” is used to describe the “incorrect” low prices.  But the word, “correction”, should be used to describe the correct direction, which is UP!  This abuse of words by the newspapers is a very powerful psychological phenomenon that most of the time people, including myself, are completely unaware of.   Due to popular convention of this pervading bias, even those who are bullish on gold and silver use the word “correction” to describe a downward move!  If I’ve done so in the past, I apologize, and I’ll try not to do it again.


Silver stocks are volatile, that’s for sure!  The changes in price create a great opportunity for traders who want to stay well diversified across many silver stocks.  If you believe in silver’s upward potential, you will not want to sell a silver stock to take profits in the form of cash.  But you can sell a silver stock that has made more rapid gains to invest in another silver stock that you think might have better upward potential and maybe it has lagged.  However, don’t just buy the laggards for no reason.  Buy the laggards if you think they are better!  I’m making use of both trading strategies, as (1) I buy the stocks that have lagged and that I believe have better upward potential in the long run when there will be much higher silver prices, and (2) as I also buy into private placements.  In order to do this well, you have to have a feel for the relative price ranges, and potential, of a number of silver stocks.   I believe I’m getting a good feel for doing this because I am producing my weekly silver stock report.   By using this trading strategy, you can take advantage of selling on strength, and yet, remain fully exposed to the silver sector.  But I would caution about trading too much.  Commissions can add up, and also, the large spreads between the buy and sell prices (the bid and ask) can really be painful, and if you place your buy orders at the bid price instead of being willing to pay what they are asking, your buy orders might not get filled!  Also, you don’t want to trade out of a really great stock that has the potential to go up ten fold, just because it has doubled.  And you have to recognize that only you can make your trading decisions.

Let’s say you know of two silver stocks, but you don’t know which is better at the given prices.  You can put half of what you have available to buy stocks into each.  Then, if one gains significantly more than the other that you feel has similar potential, you can trade out of one, and into the other.

It’s not “selling out” if you sell one silver stock for another silver stock.  One of the main benefits of owning stocks in the first place is so that your ownership can remain anonymous, and so that you can trade them for greater gains.  The real beauty of this trading strategy is that it works best for the smallest traders, but who also have enough time to study the market–and I suppose that would include a lot of my readers.  The smallest traders will have an easier time, since they won’t move a stock price as much when they buy and sell.  Larger traders have a much harder time doing this, because they can move a market too much when buying and selling.  In other words, larger traders have to pay a bigger bid/ask spread because they move the market when they buy or sell.  For example, a millionaire probably wouldn’t trade anything smaller than $5,000-10,000, because that would be just under 1% of his portfolio, and almost not even be worth his time to place a smaller order.  But a smaller trader, with $10,000 to $100,000 has a stronger incentive to trade as small as $500-$1000 a trade, which should not unduly affect the markets, and it would be easier to buy and sell and get orders filled near the asking price.  

Although you may trade every day, or a few days a week, I’m not suggesting “day trading”.  I’m suggesting “silver stock arbitrage”.  Arbitrage:: “the nearly simultaneous purchase and sale of securities or foreign exchange in different markets in order to profit from price discrepancies”.

In this way, the volatility of the silver stocks will become your friend, instead of causing you worries.  But you have to trade against the natural instinct.  Everyone loves a stock that is going up, and nobody loves a stock that is going down.  You have to avoid looking at momentum, and you have to look at relative value as your guide instead, which requires study (you have to know your companies well), a complete lack of emotionalism.  Instead of saying to yourself, “I’m a genius, my stock is up, I should buy more,” or “I guessed wrong, I wonder why my stock is down,” you have to say to yourself, “This stock is up, but this other one is looking cheaper, given what you get.  Time to move to the cheaper one.”  But remember to stay well diversified.  Personally, I have about 20 silver stocks now, and I put no more than about 5-10% maximum in each one of them–no matter how great I think the opportunity is at the time.  If they appreciate beyond that, fine, I’m in no hurry to sell until I think the stock is getting expensive relative to some other ones.

Althought I sold Avino a while ago, I almost bought Avino back again two weeks ago when it was $1.80/share (it had been as high as $3.00).  But I got lazy or preoccupied with other things, and the price moved back up to $2.20.  But I kept an eye on it, and other such opportunities.  On Thursday, it dropped back to $1.75, so I bought some again.

This week, I bought a little of each of FR.V, NBG.V, ASM.V, NPG.V, KRE.V, and ADB.V.  This does not mean I think these are the “best values” out there right now.  Other companies may be better values, but I just can’t buy any more, because I already own so much in my personal portfolio.  Other companies also might be better values, but I just don’t know enough about them.

Now, it’s also not wise to avoid a stock or sell it for the sole reason that it has just moved up.  A very astute silver stock investor I know sold MNMM at under $2.00/share a few months back, because he had good gains already.  Another very astute silver advocate I know avoided buying SRLM.PK when I was telling him about it at $2-3/share, because he said he had a policy of “not chasing stocks” because it had just risen from $1.10.  This man had even once been a market maker for penny stocks!  Each of those stocks have proven themselves to be great values, even after they had moved up a large percent, and they remain relatively great values today! This is why you have to focus on value first, and look at relative price movements second.

I can’t tell you what I intend to buy, but I can tell you what I own: 

I do not issue recommendations, and I don’t list number of shares or the size of my portfolio, but I will show the top investments in my portfolio, by rank, updated monthly.

Douglas Kanarowski, who wrote 
78 Approaching Forces For Higher Silver Prices wrote to me the following:
(I removed a bit of the pleasantries, and I got Doug’s permission to put our emails here.)

Hi Jason,

I have given a lot of thought to your method of valuing silver stocks. In my opinion, your concept of “ounces in the ground” is just one of many valuation methods.  In fact, it’s one of the better ones …. but it doesn’t give the WHOLE picture of the value of a company.  In fact, the use of any SINGLE system would have a tendency to be littered with mistakes.  

The reason that I am bringing this up is that, the longer you use this valuation method,  you are setting yourself and your readers up to be STUCK in this lone method.  In a sense, you are only looking at one section of the night sky for rising stars and not seeing a bigger (and possibly more accurate) picture.  

Below is an off-the-cuff list of the general considerations that I look for in a silver miner.  In the interest of truth and accuracy, it might pay you to mention this concept occasionally to your readers so that they develop a broader view and look deeper prior to investing.

Otherwise, keep up the good work.  Always enjoy your writing.

1. Is the deposit open pit or underground
2. If open pit, how much overburden must be removed
3. What continent is it on
4. What country is it in
5. What % of stock does management own
6. What kind of options does management have
7. How will management get rich
8. How much cash does the company have
9. What is the company burn rate
10. How hard is it to find the company
11. Are they listed on a major stock exchange
12. Will they soon be listed on a major stock exchange
13. What grades is the ore found in
14. How close is the deposit to infrastructure
15. Has a feasibility been done
16. Who did the feasibility
17. What by-product credits are there
18. What % are the by-products 
19. What is the all-in production costs
20. What are the recovery rates
21. Is it a narrow vein or wide vein
22. Is the vein vertical, horizontal or diagonal
23. What will you have to pay our employees
24. Are they unionized
25. What extra employee benefits will you have to provide
26. Status of employee contract
27. How likely are strikes
28. What kind of people make up management
29. Have they ever built a successful mine
30. What is their sleaze factor
31. To what degree is nationalization a risk
32. How close is the drill spacing
33. In there valuable scientific data from the previous owners
34. Why did the previous owners sell
35. What is the structure of the deal
36. Can the company be bought by institutions
37. What class of people are the current shareholders
38. Does anyone own a large block of shares
39. What is the size of the deposit
40. Does the company have one deposit or several
41. Are they in more than one country
42. Are they in world class mining districts
43. What must be built to service the mine
44. What will these additions cost
45. How will the company get more money
46. What is the cost of the new money to the shareholder and interest rate
46. What currencies are involved
47. Are there royalties
48. Taxes
49. Hedges
50. What is the attitude of the local government
51. Is the mine in a pro-mining district
52. Is the company “in production”
53. When will production commence
54. How complex is the ore
55. Will the company mine the deposit, sell it or JV it.
56. Who are the JV partners
57. What is the financial condition of JV’s
58. What is the status of permitting
59. What environmental concerns are present
60. What is the cost of reclamation
61. How hostile is the work environment
62. What other companies looked at the deposit and walked away
63. Number of shares outstanding
64. Is there a marketable base metal deposit under the silver deposit
65. What did they pay for the deposit
66. Did the company pay too much for the deposit or was it a deal
67. What is the total number of proven and probable ounces that the company has in the stable
68. How long will it take to go into production
69. How many years will the mine operate
70. What exploration potential does the property have
71. At what dollar lever does the deposit become economic to mine
73. How much ground around the deposit does the company have
74. Are their other mineral deposits on the property
75. What are the total costs of putting the property into production
76. What can go wrong

We both could go on and on …

In short, figuring ounces in the ground per the price of the stock is just one of MANY considerations.  A company with a lot of the WRONG answers to the above questions could still come out very high on your singular rating system.

I’m sure that there would be a temptation to say that “they can figure it out”.  However, it is my experience that the average investor doesn’t want to think …. it’s difficult work … they want to be told!

Actually, when it’s all said and done, I maintain that virtually any company with the word silver in its name will go up.  Also, any
valuation method(s) used will appear to work.

–Douglas Kanarowski


I responded to Doug with the following:

Dear Doug,

That’s an awesome list of concerns.  I don’t think there is any way I could even get the answers to some of them!  And I don’t know if any mining company executive would have the patience for me to ask all of those!

Boy, you sure are thorough with your thinking, and that’s what I love about the way you do your stuff!

I know my valuation method is not perfect, and that it leaves out a lot of those considerations.  However, in a market where I expect the silver price rise to be meteoric, I think my valuation factor will be the most important consideration, that overshadows all others.

It is for the leverage to the silver price that one is buying silver stocks in the first place.  Increased oz. in the ground means increased leverage, period.

For example, take two silver stocks:

One has 2 oz. of silver per. oz. cost to buy the stock, and oh, let’s assume cost to mine of $3/oz.  Sounds great at $7/oz, because you are earning $4/oz. on each oz. of production.  And, of course, even better at $50/oz. since the profit could be $47/oz. per oz., times the 2 oz. in ground for your 1 oz. cost to buy the stock, is just under a hundred bucks.

Then, another silver stock has 10 oz. of silver per oz., but a cost to mine of $6/oz.  It’s not so good at $7, since profits are small.  But at $50/oz., you get $44/oz!  But with this stock, you got 10 times as many oz., so the profit is times ten, or $440!  The profit is over four times as much as the other miner, given the cost of acquisition of buying each stock–even though the cost to mine is greater!

A rise in the price of silver does, indeed, solve many problems.

And the problems are infinite, of course, if the silver price is too low, and no problem can be overcome if the cost to mine is higher than the silver price.

What do you think?

–Jason Hommel

Doug responded with the following:
Dear Jason,

Hi Jason,

I guess, with a little more work we could have doubled the length of that list.

I completely follow you logic.  The problem is that many investors never operate on that level of thinking.  For example, if they want to move into silver, they will look in USA Today and only find perhaps 4 silver companies listed.  CDE, HL, SSRI, PAAS or whatever.  A perfectly wonderful Australian silver stock may be a screaming buy …. but they will never see it … frustrating the soundness of your analysis.

If I could state my central argument again, I think that it would be worthwhile for you to OCCASIONALLY remind your readership that there is a whole world of alternate ways to value a silver mining company …. it’s just that you settled on the one that YOU BELIEVE offers the best comparisons.  

A.  This statement will tend to cover your backside in the event the worst companies in your ranking system, somehow continue to do the best.  

B.  It demonstrates broader thinking on your part to the public.  

C.  Lastly, it will tend to move the reader into doing a little more of his own research …. lifting the psychological burden off of your shoulders if things somehow go wrong … as they usually do at some point.

Kind regards, 

Doug Kanarowski
I finally responded to Doug with the following:

Yes, I know and agree that novice silver investors will be attracted to the “big five” of CDE, HL, SIL, PAAS, and SSRI.  Even Richard Russell mentions those companies first.

However, my method of investing is not the “sell to the greater fool” theory of investing.  My method of investing is to buy great value, and it’s a bonus to buy great value in unheard of companies that nobody knows about.  After all, if nobody knows about it, it’s probably that much more likely to be a great value!

Value is dependant upon the ability to reach a stage where massive profits will be there for the shareholders, regardless of whether or not “the masses” end up over bidding the stock price beyond what is reasonable.  In fact, if a stock I owned did get to such a level, I’d sell long before then, in order to raise the capital to buy undiscovered value all over again.

For example, my investment strategy does not require the public to buy silver in great quantity.  Silver will rise in value regardless of mass public buying, due to the supply and demand forces you mention.  But if the public does buy, it will certainly be a bonus.

I’m not trying to pick stocks that will continue to rise to “bubble” and “overvalued” status.  I’m trying to pick stocks that are significantly undervalued, and will rise to their true value.

–Jason Hommel

This week, I spoke with a silver stock investment relations guy who thought he was bullish on silver, (but he admitted he was not as bullish as me) and so we spoke about it.  He thought silver would go to $20/oz., due to lack of supply to industrial consumers.  He did not think there would be any change in the monetary demand for silver.  Think about that.  I know that silver will have no problem rising to $20/oz. or more due to the coming silver shortage.  But I have a very hard time believing that investors won’t want to buy silver as the price continues to rise.  Of course there will be investment and monetary demand.  The precious metals have a positive feedback loop built into them, because they are not just commodities, they are money.  As their prices rise, people want more, they will need them more!  

This week, I got an email from another man who also thought silver might run up to $20/oz. due to industrial supply and demand problems.  But he also thought that there would never be any monetary demand for silver, simply due to the fact that there has been so little monetary demand for silver during the 24 year bear market since 1980.  He wrote that he thought the primary driver of silver prices would be the cost of production.  I wrote back saying that production cost has absolutely nothing to do with the price.  Price is set by supply and demand.  Even if supply were to double, and increase by 500 mil oz. per year, at prices of $10/oz. for silver that would be $5 billion worth of silver.  That is nothing compared to the size of the bond markets, and it would not be enough to satisfy any meaningful monetary demand.

The vast majority of investors today are trend investors, and not value investors.  If most people were value investors, then the opportunity in silver would not exist.  People chase trends.  If silver moves from the recent low of $4.15 up to $20/oz., think about that.  And here’s the question:  Will that create an upward trend that will draw attention or not?  Of course it will. And then, you have to ask yourself, will silver at $20/oz., still be a good value or not?  Yes, silver will still be a great value at $20/oz., and by then, it will attract both value investors and trend investors, and it will still be only the beginning of the major price rise.

I heard something about amazing China and copper prices.  I heard that China is paying 20% over the spot price for copper.  I know that China is reducing production, because their copper producers don’t have enough material available, and they are not making a profit.  Also, demand is increasing, and is expected to be met with imports.  If so, this says several things that are truly amazing.  First, it says that the free market price is not the free market price.  The real price is the China price.  Second, this says something amazing about China!   China is beginning to understand the importance of price and how it functions as a mechanism to balance supply and demand, which is what the free market is all about!  China is thus learning, the expensive way, that communism does not work, and that capitalism (which we have obviously long since abandoned) works best.  Third, this is very bullish for all commodities prices, especially prices that are manipulated by short selling paper promises.  It says that the short selling game does not work to stabilize or find the true market price, and that it ruins true market pricing.  Fourth, it says that prices for copper, our prices at our markets, will have to go up, because if excess real supply is headed to China who is paying 20% more, then there will be less copper here for us.  We know that if there is less copper here, that means that the price must go up, because that’s how the free market works!  Physical demand over rules the paper markets in the end.  

General Commentary on Silver (slightly modified from last week):

Silver stocks were up 314% for 2003!  Eighty silver stocks on my list are up, on average, 314% for the year, from Jan 1, 2003 to Dec. 31, 2003.   I believe that beats any sector, and any mutual fund in the world for 2003.  Anyone know of a better sector or fund?  

My 2004-2009 price predictions for gold and silver: 
2004: $595/oz. gold,  50:1 ratio = $12/oz. silver
2005: $1011/oz. gold,  30:1 ratio = $34/oz. silver
2006: $1719/oz. gold,   10:1 ratio = $172/oz. silver
2007: $2923/oz. gold,  5:1 ratio = $ 585/oz. silver
2008: $4,969/oz. gold,  1:1 ratio = $4969/oz. silver
2009: $8448/oz. gold, 5:1 ratio = $1698/oz. silver
2010+: infinity dollars/oz. gold, infinity dollars/oz. silver.

I calculate the gold price rise by guessing that by 2009, M3 will have a “gold-value” like it did in 1980, which is to say, M3 was worth 2 Billion oz. of gold or less.  It also assumes M3 will about triple in that time.  These figures are conservative, because I see no reason that M3 should be valued more than the gold the U.S. actually holds, which is a mere 261 million oz., not billion.  Today, the M3 value is $8870 billion / $425/oz. = 19 billion oz. of gold M3 could buy in theory.  The silver:gold ratio is also a very, very vague guess, reflective of monetary demand chasing silver, which is more scarce than gold in above ground, refined form. I have no idea when the ratio of 15:1 will be exceeded, I’m just totally guessing.  I suppose it could happen this year or next month for all I know.  Of course my real price targets are infinity dollars per oz. for both gold and silver when all is said and done, I just don’t know how long that will take, nor what year it will be.  But my point in producing the price predictions is to show my bullishness for silver and gold.

Let me say how important it is for silver stock investors to own physical silver.  There is $334 million dollars worth of silver in the registered category available for delivery at the COMEX.  The 59 silver stocks on my list, for which I have information available to calculate market caps, add up to $7090 million as of Dec. 5th, 2003.  If silver stock investors move 5% of their silver stock holding to physical silver in the next few weeks, that would be $350 million dollars worth of physical silver, and thus, the silver price would probably hit $10-20/oz. within a few days.  And if silver stock investors try to move 20% into physical silver, the silver demand will end the COMEX manipulation tomorrow.  We don’t need anyone other than ourselves to make “the big breakout” happen at this point.  

I wrote an article predicting that Silver Companies will buy silver, and urging Silver Companies to buy silver with their cash, to use silver as money, and sell silver as needed for expenses.  See

That article is now having an effect!  It is being discussed by several large “cash rich” silver companies, who are seriously considering the idea of holding their cash in the form of silver.  

A great overview on silver: Douglas Kanarowski’s 78 Approaching Forces For Higher Silver Prices

See the 600 year silver chart to see how undervalued silver really is:

Look at the summary of the world silver survey by GFMS Limited on behalf of The Silver Institute:

Note, there is virtually no monetary demand. Note, the 2002 mine production (585 mil oz.) is greatly exceeded by industrial, photo, and jewelry demand. (838 mil oz.).  Note the chart on page five, “Supply from above-ground stocks”.

The difference between mine supply and industrial demand was met by a combination of three factors: 1.  Government selling, 2.  Private selling, 3.  Recycling

U.S. government selling is ending, as their stocks have run out, or will run out.  This factor will reverse, because the U.S. government will need silver to continue their coin program, and/or need silver when they wake up and decide they need to replenish their strategic stockpile for domestic security.  Silver is a war material.  China’s selling of silver will also likely turn into buying, as China will need silver for continued industrial development, or when they also lose faith in the U.S. dollar.

Private selling has been rapidly shrinking and is now almost ended, and should turn into buying, and become monetary demand.  Monetary demand is everything in the silver supply / demand situation.  It’s not now.  Now, it’s nothing.  But it will become something incredible, because the dollar is dying.

The following is a “must read”:  Ted Butler’s best ever explanation of how silver is manipulated lower than it should be.

Sign the silver petition to stop the manipulation at the COMEX:

Ted correctly points out that a lower price creates excessive demand from consumers.  However, Ted Butler does not point out, and neglects to mention, that a perpetually low price also creates lack of demand from investors who are “trend investors”.  

I think most silver experts over-analyze all the supply and demand factors of the silver market.  No factor is more important than monetary demand.  The force of photographic demand is like a light breeze compared to the hurricane or tornado of monetary demand.  Monetary demand is everything.

Consider the gold market for a moment:  Even short selling at the COMEX is nothing compared to monetary demand.  The short position most certainly helps to depress the price of gold as the short position is growing larger.  However, it adds fuel to the fire if there is short covering, and thus, it can boost the gold price later.  But the commercial short position on the COMEX is next to nothing compared to the non-reported “over the counter” trading that is done that does not appear on the COMEX.

(Numbers in metric tonnes, 32,152 oz. per tonne.)

870 tonnes — the paper position at the COMEX, 280,000 contracts for 100 oz. each.
5,000 tonnes — the official number admitted that the central banks have sold.
15,000 tonnes — the number GATA research shows that central banks have sold / or leased.
30,000 tonnes — the number of official central bank gold, minus either the 5000 or 15,000 tonnes.
145,000 tonnes — all the gold mined in the history of the world.
2,600 tonnes — annual mine supply
4,000 tonnes — annual demand

And all of that is nothing compared to the amount of dollars out there that exist that could buy gold. $20 trillion bonds, $9 trillion M3 = $29 Trillion.  A mere 1% is $290 Billion, which, at $500/oz. is a massive demand of 18,039 tonnes.  Do you understand what that means?  That means that far, far less than 1% of dollars, in either bonds or M3 can buy gold, because there simply is not that much gold available.  

Long before 1% of U.S. paper dollars tries to buy gold, gold will be going up well over $1000/oz., and silver will be headed up over $50/oz. 

To scare away investors–that is the entire reason gold and silver are manipulated in the first place.  Only the trend investors can be deceived.  The problem is that nearly everyone is a trend investor.  So few investors understand value.  If people knew the facts and used their brains, the available above-ground refined silver would be gone by tomorrow, and the price would be well over $20-50/oz.  But don’t trust me, follow the urls and check the numbers:

    1,000,000,000,000: 1 Trillion dollars
          1,000,000,000: 1 Billion dollars
                1,000,000: 1 Million dollars
$33,000,000,000,000: World bond market yr end, ’01:
$20,200,000,000,000: U.S. bond market, yr end, ’02:
$11,700,000,000,000: U.S. stock market, yr end, ’02:
 $11,038,000,000,000: U.S. annual GDP, 3rd q.’03 est.
  $8,879,000,000,000: M3 (money in the banks) Nov. ’03
  $6,939,572,558,142: US debt, 12-4-’03
  $2,212,000,000,000: U.S. annual budget 2003 
  $1,860,000,000,000: World gold, 145,000 T @ $400/oz.
     $554,995,097,146: U.S. budget deficit, ending fiscal year, 09/30/’03
     $274,000,000,000: Market Cap of Microsoft
     $180,000,000,000: debt of Ford Motor Co.
     $104,400,000,000: US gold, 261 mil oz., @ $400/oz.
     $100,000,000,000: all the world’s gold stocks (estimated?)
         $7,090,000,000: all the world’s silver stocks (59 of them on this list, as of Dec. 5th, 2003)
           $334,000,000: 53 mil oz. of registered COMEX silver @ $6.30/oz.

So, what do all those stastistics mean?

For a while I was using M3 and dividing that by the US gold (261 million ounces), which implies the us dollar is 84 times more valuable than it should be, and that gold should hit $34,000/oz. after the fraud is destroyed.  Today, I realize I need to add in the Bond market, because bonds are an asset class designed to siphon away and replace real money, which is to say, gold.  This gives a price of about $111,111/oz. for gold.  At $430/oz, this implies that US bonds and paper currency is 258 times more overvalued than gold.

Gold is overvalued relative to silver, because at current prices, it takes 66 ounces of silver to buy 1 ounce of gold.  Historically, this ratio was 15 or 16.  Given the silver shortage, this ratio will hit 10:1 or 5:1, or even 1:1.  Thus, gold is perhaps 66 times more overvalued than silver.

Silver is overvalued relative to certain select silver stocks, perhaps by a factor of 3 or 10 or 20 to one. 

Thus, if you multiply all those numbers, 258 x 66 x 10,  You will see that bonds and currency are overvalued relative to select silver stocks by a factor of 170,000 to one. In other words, if silver stocks reach their true value, and paper currency disappears as it always does, then you might expect certain silver stocks to go up in relative value by a factor of 170,000 times more than they are worth today.  By that time, you should definitely sell the silver stocks, and buy gold.

Can silver stocks really appreciate so much? Is there historical evidence for such a crazy thing?  Yes. 

“CDE rose from penny stock status (.02 in 1967) to an NYSE-listed, $60 per share stock in 1980. In fact, the average share on the Spokane Stock Exchange rose in value nearly 16000% (yes, sixteen THOUSAND percent), as America could not get enough of silver and silver stocks.”

CDE rose by a factor of 3000, or 300,000%, and by 1980, the metals boom was stopped short, and paper money’s death was postponed.  If paper money dies a death that lasts a generation world-wide, then even greater gains should have been expected.

For this reason, a wise silver stock investor should NEVER sell silver stocks for paper cash.  A wise silver stock investor who looks for value would never sell a fairly valued silver stock for an overvalued silver stock that traded for hundreds of thousands of times more value than it should be.  Likewise, there is no excuse for a silver stock investor to have any cash or money market or bonds in his portfolio for any reasonable length of time, except for when selling one silver stock to raise the cash for another silver stock, or for when you need to raise the cash to buy silver, or a private placement in another silver stock.  

So, if you want some fairly liquid alternatives to cash, in case you don’t know what other silver stocks to buy at the time, here they are:
1.  Buy silver.  You can hold silver in an IRA.
2.  Buy CEF.  Central Fund of Canada, ticker symbol CEF.  It’s gold/silver bullion fund.  It has 50 oz. of silver for every 1 oz. of gold.  The fund is fairly liquid, you can buy it as easily as any other stock, and is a good cash substitute.  Unfortunately, given the current ratio, about 60% or more of the value is in gold.
3.  Buy a fairly large cap silver stock, with fairly large volume, that is still fairly cheap on the list.  SSRI is probably the best candidate, the next might be PAAS.  


The sheer stupidity of big money not recognizing the value of the world’s remaining silver is utterly shocking to the rational mind.  Clearly, bond holders are utterly deceived, and totally unaware of the situation.  All my readers should understand and know that bonds were originally invented to suck the capital and money (gold and silver) away from the people.  Bonds today are a paper promise to repay paper.  What a con game!  Are bond holders conservative and safe?  No, they are fools!  There is nothing safe about holding a paper promise to receive more paper when we have been experiencing hyperinflation for the past two and a half years!  

See my prior essay, “Inflation & Deflation During Hyperinflation” 

And the fund investors who buy paper silver futures contracts instead of real silver are a very odd bunch of fools, for they should realize that nobody can deliver the 800+ million ounces of silver promised in the paper contracts and options that does not exist.  It’s like the paper longs are betting on the bank run happening, but they all are making sure they get at the end of the long line.  Instead, they could go front and center, where there is an open window available where you can go and get physical silver, and nobody is there.  Idiots!  If you know a bank run is going to happen, and you are actually willing to bet on it, then go and withdraw your money before it is too late!  Don’t bet on it happening, which, if it does happen, your contracts will be defaulted on!  Amazingly blind idiots.  Wake up!

See also my prior essay, “The Moral Failures of the Paper Longs


How bullish am I on silver?  Here’s an interesting way to put it: “75 times infinity” dollars per ounce. 

I believe the dollar will eventually be destroyed, likely within my lifetime, hence the “infinity” part.  I believe the ratio of silver to gold may be equal during a spike, when the market realizes that above-ground refined silver is more rare than gold.  Thus, silver may outperform gold by a factor of 75 times better.  Currently, the ratio is 75 ounces of silver can buy one ounce of gold or 75:1. 

I may end up selling silver for gold, some at the 10:1 silver to 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.

How we can tell if silver is leading gold, or if gold is leading silver?  IE, which is going up more, faster than the other?  The way you can tell is by looking at the ratio.  If the silver:gold ratio is going up (say, from 75:1 to 80:1), then gold is moving up faster (because it takes 5 more silver oz. to buy an oz. of gold.  If the ratio is going down (from 75:1 to 70:1), then silver is moving up faster.  So, keep an eye on the ratio. 
For a list of bullion dealers:
The Silver Stock Report

For a list of Brokers that handle Canadian issues and/or pink sheets:

To track the 130 ticker symbols of the 90 stocks on this list at yahoo:

To learn All about Canadian law, 43-101, about reserves and resources:

A good website that hosts posting boards for many of the smaller canadian stocks is
Click on “Bullboards”.

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 very strong 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 report is not investment advice.  This report contains information that may or may not be up to date, and may be inaccurate.  I urge you to contact the company and do your own research to verify the information contained in this report.

This report is not an offer to buy or sell any securities.  I am not a broker.  Only your broker can buy or sell securities for you.

I urge you to consult with your investment advisor to determine whether these kinds of investments are right for you.  

I also caution you to be aware of your investment advisor’s advice, they are sometimes paid to push things like mutual funds, bonds and other securities that may not be in your best interest to buy.  Some investment houses are short physical metal, and thus, they may attempt to strongly discourage you from buying precious metal or precious metals investments.  I believe that the propaganda machine in support of frauds such as bonds and the dollar is so strong, that they may even believe what they say when they give bad advice to avoid the safety and protection of precious metals.  It is most likely that they simply do not understand the precious metals market as well as you do.

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. 

Surely, there are scammers in the mining industry in the past, and there will be scammers in the future.  Remember the fraud of Bre-X.  The new 43-101 compliance laws put in place after Bre-X will not prevent a “certified” geologist from lying if he feels lying will create a better payoff.  The Bible warns, “trust no man”, yet at the same time advises us to “cast our bread upon the waters”, and to not issue “false allegations” against others.  Physical gold and silver provide the “payment in full” as long as the coins or bars themselves are genuine and not fake. 

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)

(These first three companies, BHP, GMBXF.PK, and BVN  produce a lot of silver, but are way to expensive to buy for the silver exposure for your portfolio.)

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.

Dear BHP:  By all means, keep mining the silver if you want the silver exposure, and want to be in the silver business.  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)
651,646,640 shares (2002 annual report)
@ share price $2.92
$1902 mil MC
“Grupo Mexico ranks as the world’s third largest copper producer, fourth largest producer of silver and fifth largest producer of zinc.”
They produced 28.2 million oz. of silver, worth $129 million, in 2002.  (P. 5, annual report.)
Total value of produced metals: $2527 milllion. (but the company lost money in 2002).  They mainly produce copper, 900,000 tons worth $1.5 billion in 2002.  Thus, silver, at 2002 prices, is only 5% of their production value.  Silver is a by-product for them, not a main product.
I don’t have silver reserve figures, nor do I see any need to find them or add them, since they are not a primary silver producer, and I don’t think anybody would be buying them for the “silver exposure”.
If we assume 280 mil oz. of silver (ten years reserve for production), then we still don’t have anything exciting.
1902 / 280 = $6.07/oz. cost.

Compania de Minas Buenaventura SA (BVN)
Minas Buenaventura 
– Peru´s largest publicly traded precious metals company 
–produces over 10Moz of silver per year
–looks way too expensive for the silver alone: 3.6 Billion market cap.

HL (HECLA MINING CO) (208) 769-4100
110 mil shares 
@ $7.54 share 
$833 million Market Cap (MC)
near zero debt, cash: $125 mil (Nov. 2003)
(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) Hecla owns just under 30% of it!
the Lucky Friday mine (proven & probably reserves) 14 mil. (produced 2 mil)
Total silver = 32 million oz.
Plus 412,000 oz. gold x 10 = 4.1 mil oz silver equiv.
Total silver equiv. reserves = 36 mil oz.
(Since my method values silver in the ground as a key asset, I should also value the cash as a “silver asset” which will be “marked to market” if silver goes up, and cash goes down.  If HL is smart, they should be able to turn the cash into increased “silver exposure” either through buying silver properties, silver equities, or physical silver.)
($125 million cash / $6.30/oz = 19.8 mil “silver equiv” oz.)
19.8 + 36 = 55 mil oz.
$833 mil MC  / 55 mil “oz.” = $15.14/oz.
You get “approx” .42 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments: My valuation method makes HL look even worse this week.  I just learned that HL only owns just under 30% of the Greens Creek silver mine, not 100%, so I was over-counting HL’s reserves by 21.7 million ounces.  So, due to my mistake in HL’s favor all this time, HL now looks even worse than ever.

HL has been holding large amounts of cash.  The “silver value” of that cash has been declining rapidly as silver prices move up.  They have lost several million ounces worth of silver by holding dollars, instead of silver. A silver miner has more reason to hold their money in the form of silver than any other corporate entity.  

Yes, it’s easy to be right “in hindsight”.  But I’m not calling this from hindsight.  I had the foresight to call it right, and time has proven me correct.  17 weeks ago, in my very first silver report, I wrote:  

Why 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, not selling.  They could buy 21 million ounces of silver at $5.25 with that cash.

Today, HL still holds all that 113 million in cash, and even more: they are up to 125 million in cash.  They should have been holding it in the form of silver bullion.  The difference at last week’s prices is $6.46 – $5.25 = $1.21.  $1.21/$5.25 = 23%.   17 weeks ago, they could have bought 21.5 million oz. of silver for their $113 million in cash.  Today, they can only buy 17.5 million oz. worth of silver for $113 million.  Therefore, they have LOST 21.5 mil – 17.5 mil = 4 million oz. equivalent worth of silver by holding dollars instead of silver bullion.  At $6.46/oz., that mistake is like a $26 million dollar loss!  

HL has more oz. than listed in the “proven & probable” category used in this calculation. Vein mining makes reserve calculations difficult, and HL has rarely had more than about a 3-4 year picture of reserves ahead of them in 100 years of production.   

I have been counting their papar cash as if it could be silver, but it still does not help boost their valuation much.  They are still the most expensive company on the list.  But if HL bought 19 mil oz. of physical silver, they might break the back of the silver market, and significantly boost their own profitability. 

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.  They had a loss in the 3rd quarter, 2003.  Total “cash costs” are $3.68/oz. (It’s that low because that figure includes gold credits!) Profit at $6.30/oz. is $2.62/oz x 9 mil oz. annual production = $23.6 million annual profit. That gives a PE of 35. That’s a very high P/E, which means HL is very expensive. 

Why does HL hold $125 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, like the undervalued silver stocks. 

OK, here’s another way to get a “guesstimate” of HL’s reserves.  I will assume they have enough silver to last another 20 years of mining.  That’s a fair enough time for a mine plan I suppose.  I suppose they could run out of silver sooner, or later.  They produce 9 mil oz. in a year.  9 mil oz. x 20 years = 180 mil oz.

$833 mil MC / 180 mil oz. = $4.62/oz. that you’d pay for the silver in the ground whey buying HL.  HL is still expensive, no matter how I run the numbers.  

And in 4 months, nobody has been able to rationally justify this high valuation to me, nobody from the company, and not a single email from any investor.  I believe that this stock trades on market perception, reputation, and momentum.  As for me, I’m not buying such intangibles. I’m buying silver in the ground, real assets, or exploration potential.

HL was downgraded Jan 6th by CIBC Wrld Mkts from Sector Perform to Sector Underperform
Perhaps that explains the drop in HL stock price last week? I see multiple reasons why their valuation of HL is right.

CDE (COEUR D’ALENE) (208) 769-8155 or (800) 624-2824
210 mil shares (Issued 32 mil new shares late Oct. 2003)
@ share price $5.90
$1239 mil MC
cash $38 mil (I think this is an outdated cash figure)
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)
$1239 mil MC / 224.7 mil oz = $5.51/oz.
You get “approx” 1.14 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments: A few weeks ago, CDE announded their intention to try and raise $150 million in the capital markets by issuing shares.

The first week of January, CDE announced a deal for $160 million in convertable bonds!   Beware of debt!

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. 

Again, their listing of ounces is in the “reserves” category (more certain) not the “resources” category, which is less certain.  They may have “resources” but like HL and Industrias Penoles, they give no estimates.

397.5 mil shares outstanding (2002 annual, unchanged since 2001)
@ $4.30/share
$1,709 mil MC
419 proven and probable reserves of silver (from 2002 annual report on website)
$1,709 mil MC / 419 oz. silver = $4.08/oz.
You get “approx” 1.54 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 refined by the metals division in 2002, and 1 mil oz. gold.
They probably refine almost all the silver that comes out of Mexico.
They probably produce about 34 mil oz. of silver from their mines annually, and they have expansion plans.  

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.

I’ve heard this stock is tightly held, most is family owned.  

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.

fully diluted shares = 103.3 million (6 January 2003)
@ share price $.31 Cdn x .77 US/Cdn = $.24
$25 mil MC
See the url above for the numbers from the company’s website, which are:
Proven & Probable & Possible: 7.6 mil oz silver, 93,000 gold. = 8.5 million “silver equiv” using my method of counting gold as 10:1
“Potential” total: 21.2 mil oz silver, 221,000 oz. gold.
According to my valuation method, that’s 2.2 mil oz. of “silver equiv” for the gold, plus the 21.2 mil oz. silver, for a total of 23.4 mil oz.
$25 mil MC / 8.5 mil oz. silver equiv. = $2.90/oz.
$25 mil MC / 23.4 mil oz. silver equiv. = $1.07/oz. –exploration potential
You get “approx” 2.2 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration potential: 6.0

See also regarding ECU’s exploration potential:

Additional comments: ECU recently recovered title to properties that were in dispute.  See:

MAI.V MNEAF.OB (MINERA ANDES) (604) 689-7017
73 mil fully diluted as of Nov. 2003
@ share $.60 Cdn x .77 US/Cdn = $.46 US
$34 mil MC
To raise $6.6 mil in recent financing.
owns 49% of the resource: “55 mil silver equiv. oz. resource” back in 2001.  AT 60:1 silver:gold when gold was about $300/oz., about half/half silver and gold.  
Estimated:  27.5 mil oz silver
Estimated:  27.5 mil oz. “silver equiv” of gold.
/ 6 = 4.58 mil oz. silver equiv at 10:1 ratio.
Total: 27.5 + 4.6 = 32 mil oz. silver equiv. (x .49 (they own 49%) = 15 mil oz.)
They will be exploring for more.
2.2 km stretch, open another 2.7, plus 3 other vein systems.  significant high grade silver exploration potential.  7000 meters of diamond drilling.  Plus a copper project, billion ton ore deposit.
$34 mil MC / 15 mil = $2.25/oz.
You get “approx” 2.8 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:  About half is gold value, half is silver value at 60:1.  Minera Andes has several significant bonuses that my method is not valuing properly.  First, I undercount the gold, of course, so consider there is a “gold bonus” at current gold prices.  Second, they will be doing significant exploration work to increase their resources, and they have recently raised the money to be able to pay for that exploration work.  Third, they have a copper project, and copper prices are rising.

SIL (APEX SILVER) (303) 839-5060 
36.7 mil shares 
@ share price $20.85/share
$766 mil MC
cash on hand: $40 million (Nov. 2003)
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
$766 mil MC / 454 mil oz = $1.68/oz.
You get “approx” 3.73 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments: Apex silver primarily has institutional investors.  

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. That’s a nother plus, in general, for the silver market if Billionaires are paying attention to it.  There are several other zinc / silver plays on this list that investors might also consider: CZN.TO, EXR.V, MMGG.OB (I own all three of these, but not SIL.)

Shares Outstanding Fully Diluted 34.1 mil
@ share price $9.27/share
$316 mil MC
Cash on hand, Fully Diluted: C$34 million
“over 3.5 mil ounces of gold resource and 160 mil ounces of silver” –Dec. ’03
silver conversion = 3.5 x 10 = 35 mil + 160 mil oz. silver = 195 mil oz. silver
At 70:1 ratio, 3.5 x 70 = 245 “silver equiv” of gold, and 160 mil of silver = 405.
245/405 = 61% of the mineral value is in the gold, 39% silver.
At 10:1 ratio, 35/195 = 18% of the mineral value is in the gold, 82% silver.
“In addition to the resources already drilled, Minefinders controls a strong portfolio of properties in Nevada, Arizona, and Mexico which have the potential to host new multi-million ounce discoveries over the next few years.”
$316 mil MC / 195 mil oz. = $1.62/oz.
You get “approx” 3.88 ounces in the ground for 1 oz. silver.

Additional Comments:  At 70:1 silver to gold ratio, over half of MFN is in gold, so consider this a significant gold bonus. MFN also now lists their resource figures on their website’s main page.  I’m sure investors appreciate this.  I do.  

The drop in the price of Minefinders since I started these reports has been extraordinary.  On report number one in late September, the share price was $11/share.  Today, at $9.27, that’s a drop of  16%!  That’s extraordinary, because silver stocks are up, on average 314% for 2003!  The drop in the price of Minefinders is greater than any other stock from that report.  

CLIFTON MINING)  (I own shares) 801-756-1414   (303) 642-0659 Ken Friedman
45 mil shares fully diluted  (Oct. 2003)
@ $1.83/share US
$82 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”
$82 mil MC / 52.5 mil oz. = $1.57/oz.
You get “approx” 4.0 ounces in the ground for 1 oz. silver.
Exploration Potential: 38

Additional comments:  The rise in the price of Clifton Mining since I started these reports has been extraordinary.  On report number one, the share price was $.29/share.  Today, at $1.83, that’s a rise of 531%!  That’s a greater gain than any other stock from that report.  Unfortunately, I did not own any Clifton at that time.

Note the “exploration potential”. If those oz. prove up, it is about 10 times cheaper.

For more info on what’s going on with Clifton, see, JV partner.

Clifton has 25% ownership of a biotech firm that makes a colloidal silver.  

The biotech firm 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 shares of CFTN.PK.  

KBR.V KBRRF.PK (KIMBER RSCS) (604) 669-2251
28 mil shares fully diluted
@ share price $2.15 x .77 US/Cdn = US $1.65
$46 mil MC 
30 mil oz. silver resources Measured & indicated, plus inferred
540,000 oz. gold x 10 = 5.4 mil “silver equiv.”
$46 mil MC  / 35.4 mil oz. = $1.31/oz.
You get “approx” 4.8 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:  A one property company.  The Carmen gold-silver deposit on their Monterde property in the Sierra Madre belt of Chihuahua State, Mexico.

GRS GAM.TO (GAMMON LAKE) (902) 468-0614
Fully Diluted 58.7 mil shares (Nov 30, 2003)
@ share price $4.35
$255 mil MC
Completed a $15 million private placement in Nov. 2003, and acquired 100% rights to Ocampo
Total Ocampo Inferred: 1,124,000 oz. gold,   50,438,000 oz. silver
Silver equiv = 11.24 mil oz. + 50.44 mil oz. = 62 mil oz.
Total Ocampo Measured & Indicated   2,207,800 oz. gold,  108,438,000 oz. silver
Silver equiv = 22 mil oz. + 108 mil  oz. =  130 mil oz.
Total Ocampo Measured & Indicated plus Inferred = 182 mil oz.
Gammon owns 27% of Mexgold, MGR
Since Mexgold owns 55 mil oz. of “silver equiv”, 27% of that is 14.85 (15) mil oz.
182 + 15 = 197 mil oz.
$255 mil MC / 197 mil oz. = $1.30/oz.
You get “approx” 4.86 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:  Drill results released Jan 7th:
At current prices of a 64:1 silver:gold ratio at $425/oz gold and $6.60/oz silver, the resources are worth $1048 million of silver, and $1411 million worth of gold.  Cash cost is $85/oz.  Life of mine is 7 years.  

* CZN.TO  CZICF.PK (CDN ZINC)  (I own shares) 1-866-688-2001
67.3 mil shares fully diluted as of Dec., 2003 (as stated in the proxy, p.8)
+ 12 mil more fully diluted shares as of Dec. 22 financing.
+ 0.36 mil shares on Jan 5th.
79.7 fully diluted shares as of Jan 14th, 2003
@ Share Price $1.32 CAN x .77 US/Cdn = $1.02 US
$81.3 mil MC
$13.5 million cash, CAN, no debt.
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.
$81.3 mil MC  / 70 mil oz. = $1.16/oz.  
You get “approx” 5.42 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:  The additional cash means that CZN will now be able to drill and explore more of their property.  Although the company is now more costly to buy, it is far less risky, given that they now have $13 million in cash.

CZN likely has much more silver in the ground, and has good profit potential.  

I would like the company to privide an estimate of the silver on the rest of their properties, but their mine plan consisted only of zone 3 at the moment.  The rest must remain “exploration potential” for now.  

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 US $2/share or more, and do a final public offering between US $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 bankrupted 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. 
3. High Grade ores:  
12% zinc/ton; = 240 lbs. zinc/ton x 46 cents/lb. = $110/ton for the zinc.
10.1% lead/ton = 202 lbs. lead/ton x 34 cents/lb. = $69/ton for the lead.
6 oz. silver/ton x $5.95/oz. = $35/ton for the silver.
0.4% copper/ton = 8 lbs. copper/ton x 1.07 cents/lb. = $8.5/ton for the copper.
Total: $223/ton!  (This price is moving up!)  
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 based on my “valuation method”.  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.  46 cents/lb. for zinc!  Check for updates.   

I own shares of CZN.TO  

PAAS (PAN AMER SILV) (604) 684 -1175
(I updated all key PAAS info this week from the company website)
58.2 mil shares fully diluted. (Sept. 2003)
@ share price $15.05/share
$876 mil MC
10 silver properties (3 in production)
produced 7 mil oz. silver in 2001:
Reserves & Resources through Dec. 11th, 2003 from
743.2 million total
$876 mil MC / 743.2 mil oz. = $1.18/oz.
You get “approx” 5.34 ounces in the ground for 1 oz. silver’s worth of stock.

Additional Comments: I believe PAAS is one of two silver companies on the list today that is significantly in debt (the other is now CDE).

PAAS recently went into debt in order to ramp up production. I am strongly biased against debt and against producing and selling a valuable asset like silver at today’s low prices. 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. 

I think it is extremely important to invest in a company that understands the silver story as reported by Ted Butler, David Morgan, and especially me, because I emphasise the potential of monetary demand.  If the company does not understand this, then they are more prone to doing extremely stupid things like perhaps hedging silver at $10/oz. or so, as they will see that as an “unusual spike,” instead of the inevitible stopping point on a major rise.  What if your silver company decides to lock in silver prices at $8, and hedge years of production to “protect the shareholders and provide exposure to the high $8/oz. price,” only to watch silver prices head past $25 and past $50/oz?  Your stock could get wiped out in bankruptcy, and your investment could go to zero value!  This is the danger of stocks!  Your investment is subject to the whims of management! 

WARNING: PAAS says at their website that they will hedge silver, in order to finance mine construction.
“Pan American is loath to give away the upside on any of its silver production, especially at current low metal prices, and will do so only to the minimum extent required as a condition of prudent mine financing.”

My opinion is that it is NEVER prudent to go into debt, or lock in silver prices to finance a mine.  If PAAS cannot raise capital on the markets by issuing shares, then they should not be financing new mine construction.  If the market will not support new mine construction, then the market does not need more silver.  PAAS and CDE should learn to trust the free market process, and avoid debt.  

On July 30th, 2003, PAAS got $75 million in cash from a debenture debt financing deal.
On July 30th, 2003, silver was $5.10/oz.

On Jan 9th, silver was $6.46/oz., a $1.36/oz. increase over $5.10, or an increase of 27%

PAAS’s “working capital” (or non-working, depreciating, paper dollars) was $92.8 million on Sept. 30, 2003 or 18.19 mil oz. silver equiv.  Check the link.
If PAAS averaged holding $92.8 million dollars from July to Jan 9th, then they lost the equivalent of 27% on their “money”.  
On Jan 9th, $92.8 million at $6.46 can only buy 14.36 million oz. of silver.  So, PAAS lost (18.19 – 14.36 = 3.83 mil oz.) which, at $6.46/oz., is $24.74 million dollar loss worth of silver by holding dollars instead of silver bullion during that time period.  Capital spending was only $3.5 million during the third quarter, so they did not need to use the money right away–they should have kept it in the form of silver bullion, obviously.

FSR.TO FSLVF.PK (FIRST SILVER) (604) 602-9973 or (888) 377-6676
37.8 mil shares (Sept 30, 2003)
options: 825,000
38.6 mil shares fully diluted
@ share price $1.58 Cdn x .77 US/Cdn = $1.22 US
$47 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.
$47 mil MC / 42 mil oz. = $1.12/oz.
You get “approx” 5.62 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments: This is a high grade, producing miner.  The high grades, about 300g/ton, are a plus.   They are also actively exploring, another plus. 

3rd quarter, 2003, FSR.TO produced 389,154 oz. silver, and 604 oz. gold. and revenue was $2.09 million for the 3rd quarter.  They produced at a loss, (a penny per share).  They are unhedged, and remain committed to remaining unhedged.

TUMI RSCS) (TUY Frankfurt Exchange)  (I own shares) Nick Nicolaas IR (604) 657 4058
23.7 fully diluted shares (Dec. 2003)
@ share price 1.49 CAN x .77 US/Cdn = $1.15 US
$27 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.
Raised $2.7 million Nov. 14, 2003
$27 mil MC / 25 mil oz. = $1.09/oz.  ***I’m using this number***
$27 mil MC / 50 mil oz. = $.54/oz.  (exploration potential)
You get “approx” 5.8 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration Potential: 12 (plus more after bonanza silver discovery late November.)

Additional comments:  Tumi roared up 29% on Nov. 20, followed by a 27% gain on Friday Nov. 21, after the company announced a bonanza grade silver discovery after drilling.  This should significantly increase the numbers for their “exploration potential”, but no word yet on the increase.  It takes time for the geologists to estimate all of that, but investors went crazy over it immediately.  

Tumi is focused on becoming a “premiere junior silver explorer.”  It’s good to see the focus is in the right metal.  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. 

Look at: Tinka TK.V (tumi’s sister company)
A pretty big gold/copper property in Peru (Tumi owns 30% of it)…  
That could mean significantly increased assets for Tumi.

I own shares of TM.V.

(formerly western copper) –And copper prices are headed up, too, $1.08/lb. now. Jay Oness Toll Free: 1-888-456-1112
40.1 mil fully diluted (After Dec. 16th 2003 financing)
@ share price $5.25/share
$211 mil MC
(not actively mining)
$16 million in cash in the till (4 mil + 12 mil financing)
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.
Got $3 mil CAN cash, no debt.  
The capital cost to get the mine going is estimated to be US $148 million
Penasquito silver/gold.  213 mil oz silver.  just over 2 mil oz. gold. from Chile/Colrado zone.  
Brechia zone will double the numbers, and infilling inferred to indicated: probably in Jan will have 500 mil oz. silver, 5 mil oz gold.
Exploration potential: 500 mil oz. silver, 5 mil oz. gold, from
Two other zones that could each duplicate the success of each of the other two. So up to a Billion… oz. of silver as “exploration potential”!
Feasibility: 2006-7 production timeline.
$211 mil MC  / 233 oz. = $.90/oz.
$211 mil MC  / 1000 oz. = $.21/oz. –exploration potential 
You get “approx” 7 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration Potential = 30

Additional comments:  Note the capital cost to get the mining started: $148 million dollars.   
WTZ also has the following other metal resources:
3.73 billion pounds of zinc
673 million pounds of copper
1.3 billion pounds of lead

18.7 mil shares outstanding
@ share price $2.85 CAN x .77 US/Cdn = $2.19 US
$41 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.”
$41 mil MC / 55 mil oz. = $.75/oz.
You get “approx” 8.44 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:  Gammon Lake is a large shareholder, 26.7%.  The quote above comes from Gammon’s website.  

ORM.V (OREMEX RES) (no PK symbol yet?)
Fully Diluted:   24,012,928
@ share price $.95 x .77 US/Cdn = .73
$18 mil MC
Have $5 million cash in the bank as of Dec. 2003. 
holds the right to acquire a 100% interest in six mineral properties in Mexico.
Oremex will focus on the exploration and development of the Tejamen Silver Property and the San Lucas Silver Property.
They are hoping to explore for up to 100 mil oz. silver by drilling over the next year.
–Experienced team of geologists and managment that have put other properties into production:
Anthony R. Harvey, Chariman, has put 14 properties into production in his 40 year career.
for an inferred resource of 8.4 million metric tons at a grade of 89 g/t Silver (2.86 opt) and 0.2g/t Gold (0.006 opt).
2.86 x 8.4 = 24 mil oz. silver at Tejamen (one of six properties)
$18 mil MC / 24 mil oz. = $.73/oz.
$18 mil MC / 100 mil oz. = $.175/oz. –exploration potential
You get “approx” 8.6 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration Potential: 36

SSRI (SILVER STD RSC) (604) 689-3856 or (888) 338-0046
41 mil shares (Oct. 2003)
@ share price $10.75/share
$439 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.) 
$439 mil MC / 688 mil oz. = $.64/oz.
You get “approx” 9.87 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:  SSRI really is the “silver standard”.  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.  

I attended a two hour SSRI presentation after the Gold show in SF in late November.  For the most part, their properties are very well drilled, and they have a fairly solid idea on how much silver oz. in the ground they have.  They started their plan to acquire silver properties and become a “silver company” in about 1993, which explains why they have such a large market cap, and so many good properties with so many ounces of silver.  I encouraged them to acquire silver properties and get ounces in the ground at 10-15 or even 20 cents/oz.  They indicated that they felt this would ‘dilute’ the value of the silver properties they acquired for 5 cents/oz in the ground.    I countered by saying new acquisitions would add value for existing shareholders who hold or acquire the share price at higher prices.  They said they would consider this idea further.  

Some investors like SSRI because of the diversification –SSRI owns many silver properties.  I say you can get a similar kind of diversification by owning stock in many silver companies.

* SRLM.PK (STERLING MINING) (I own shares) Ray DeMotte 208/676-0599
just under 10 mil shares fully diluted
@ share price $11.45
$114 mil MC
Cash on hand: $1.1 million (an increase, reflecting the increased number of shares from 7 to 9 million) 
~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)  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
$114 mil MC / 185 mil oz. = $.61/oz. 
$114 mil MC / 500 mil oz. = $.23/oz.  (exploration potential)
You get “approx” 10.3 ounces in the ground for 1 oz. silver’s worth of stock.
(Exploration potential is 27. )

Additional comments:  I wrote an article on SRLM in late Dec.  See: Sterling Mining

Ray DeMotte really, really understands the silver story, and has been aggressively acquiring silver properties.   Sterling continues to consolidate its land position around the Sunshine mine.  

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. See also: December 14, 2003: “In light of the continued low silver price, Sterling has this year begun holding back into inventory a portion of this year’s silver coins minted.”

I own shares of SRLM.PK

(604) 684-6365  Erick Bertsch 
73.8 mil shares fully diluted as of Oct 31, 2003
@ share price $.98 CAN x .77 US/Cdn = $.75 US
$56 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. 
(Exploration potential = x 1.7 = 181)
$56 mil MC / 107 mil oz. silver equiv.  = $.52/oz.
$56 mil MC / 181 mil oz. silver equiv.  = $.31/oz. –exploration potential
You get “approx” 12.1 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration potential = 20

Additional comments:  

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 $.42/lb =  $16.8 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 FAN.TO guys, 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.

DUMONT NICKEL)  (416) 595-1195
56.4 mil shares outstanding 
@ share price $.51/share x .77 US/Cdn = $.39
$22 mil MC
*** Dumont still needs to raise and pay several million to clifton for 50% of the project.
$22 mil MC / 52.5 million oz. = $.42/oz.
You get “approx” 15 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:  Clifton’s JV partner, doing active drilling work right now.  And recent property acquisitions.

9.1 mil shares fully diluted (Dec. 2003)
@ $1.45 Cdn x .77 US/Cdn = 1.12
$10 mil MC
The Naica Mine: up to 80% ownership
4.3%Zn, 5.5%Pb, 6ozAg, 0.01ozAu, 0.34%Cu
5 million tonnes reserves
= 6 x 5 = 30 mil oz. silver reserve. x .8 = 24 mil oz.
Also, First Majestic acquired the La Parrilla Silver Mine in Mexico, a former producing silver mine that closed in 1999 due to low silver prices.  They expect to re-open in 4 months, producing 175,000 tonnes a year at 300g/t silver, which means 1.8 mil oz. of silver produced per year.  The cost to mine is estimated at $25-30/tonne, and recovery is 85-90%.  Seems like it may be about half profit, or perhaps $5 million per year positive cash flow on over $10 million gross if silver is at $6.50/oz.
They linked an excerpt from my free e-book from “8 Reasons why silver is a better investment than gold!” see url here:
$10 mil MC / 24 mil oz.(not including the La Parrilla)++ = .42/oz.

You get “approx” 15 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:  I’m severely undercounting their silver reserves, since I’m not counting the La Parrilla, since there is no data for that.  But I’d like to guess.  Hmmm. what number shall I pick out of the hat?  I suppose we might “guess” that La Parilla may have 10 years of production left?????  But, of course, I have no idea whether it is significantly more, like 20 years, or less, like 5 years.  But anyway, we could add another 18 million oz. of silver?????  If so, it would be: 10 mil MC / 42 mil oz. = 26 oz. in the ground for the oz. you spend on stock.  I’ll just say, for now, that the 26 represents “exploration potential”, since that’s all guesswork too.

I own shares of FR.V

EXPATRIATE RECS) (I own shares) 1-877-682-5474 Dr. Harlan D. Meade, President and CEO
82 mil shares fully dulted. (Dec, 2003)
@ share price .44 CAN x .77 US/Cdn = $.34
$28 mil MC
$1.2 mil CAN capital in the til no debt.
Mostly a base metals company:  Zinc.  Also has some silver & gold.
Total metal content of the six projects with resources… “Using current metal prices, the gross metal value of Expatriate’s interest in the base metals in the properties is approximately US$1.56 billion as compared to US$540 million for its share of the silver and gold.”
Metal:  Expatriate share of the project:
Zinc      2.67 billion lbs.
Copper  385 million lbs.
Lead      202 million lbs.
Silver     63.1 million oz.
Gold       426,700 million oz.
Gold x 10 = 4.3 mil “silver equiv”.
$28 mil MC / 67.4 oz. silver = $.41
You get “approx” 15.3 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:  Significant zinc bonus, about 3 times the silver value.  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 significantly better value than my number shows.

I own shares of EXR.V.

HDA.V (HUSIF pink sheets symbol?) (HULDRA SILVER)
no website
Phone: Magnus 1 (604) 261-6040
6.924 million shares out (fully diluted)
@ share price $.60/share x .77 US/Cdn = .462
$3.2 mil MC
no debt
HDA’s proven and probable reserves stand at 161,000 tons of
ore grading an average 25.6 ounces per ton silver, and 10 percent combined
lead/zinc — 4.12 mil oz silver, not including the zinc & lead.
According to Magnus, the indicated and inferred reserves total about 180,000
tons at about the same grading — in other words, a further 4 million ounces of
~8 mil oz. silver
$3.2 mil MC / 8 mil oz. silver = .39/oz.
You get “approx” 15.7 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:  There is a significant lead/zinc bonus.  “The property could be put into production at a capital cost of CAN $3.5 million — with payback of capital (when equity financed) within two years.” 

* SVL.V  STVZF.PK (SILVRCRST MINES) (I own shares) (604) 691-1730 
24.2 fully diluted Nov. 21, 2003
(pub float: 8.93 mil, the rest is owned by insiders)
@ share price $1.48 CAN x .77 US/Cdn = $1.14 US
$28 mil MC
Indicated resources of silver 30 mil oz. (SOZ.)
Projects in Honduras.  
Silver totals are projected to be: 75 – 135 mil oz. (not 43-101 compliant)
$28 mil MC / 75 = $.37/oz.  
$28 mil MC / 135 = $.19/oz.  
You get “approx” 17.1 ounces in the ground for 1 oz. silver’s worth of stock.
(Exploration potential = 30 oz.)

Additional comments:  Silvercrest just acquired two 100% owned silver projects; one in Mexico and one in Guatemala.

I believe this is a great development.  The stock hit a high of $1.81 Cdn a few weeks back even before they acquired these two projects!  

They have been and will be acquiring more silver properties with the money raised in the late November 2003 private placement, which I think is an outstanding way to spend the money.

I own shaers of SVL.V 

* ADB.V  ADBRF.PK (ADMIRAL BAY RSCS) 604 628 5642 — Curt Huber– Business Development  
31.4 mil shares to possibly be fully dilluted.  as of Oct 17, 2003
@ share price $1.31 CAN x .77 US/Cdn = $1.01 US
$32 mil MC
They have $6 million cash.
–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.
$32 mil MC /  89.3 mil oz. = $.35/oz.
You get “approx” 17.8 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 significant “bonus”.  The company will probably split up the two projects into two companies, so existing shareholders will have shares of each.

They are actively digging, drilling, and releasing results in press releases.

I own shares of ADB.V.

* ASM.V ASGMF.PK (AVINO SILV GOLD) 604 682-3701 — David Wolfin
10.9 mil shares fully diluted, Nov. 2003 (with the 4 mil new shares from PP)
(proposed PP in late Oct 2 mil units at $1.27 (unit = 1 share + 1 warrant at 1.58)
@ share price $1.85 CAN x .77 US/Cdn = $1.42 US
$15.5 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.
They actually have over five silver properties/projects.  I’m only have numbers to count for one, the “Avino mine”.  
= 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”
$15.5 mil MC / 51.5 mil oz. = $.30/oz.
You get “approx” 21 ounces in the ground for 1 oz. silver’s worth of stock.

Additional notes: There are 4 additional silver properties that I don’t have numbers for.  Consider this a “silver bonus”!!!

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

45 mil shares fully diluted October 2003
@ share price $.31 x .77 US/Cdn = $.24 US
$11 mil MC
Cello Ccasa (1 project of 4) Resource Estimate – August 2002
31.4 mil oz. silver, 134,000 oz. gold. (x 10 = 1.3) 32.7 mil oz.
(Still much exploration work to do.)
$11 mil MC / 32.7 mil oz. = .33/oz.
You get “approx” 19.2 ounces in the ground for 1 oz. silver’s worth of stock.

* MNMM.OB (MINES MGMT) (I own shares) (509) 838 6050 Doug Dobbs
10.1 mil shares fully diluted as of the Sept. 3 pp that closed.
@ share price $6.54
$66 mil MC 
261 mil oz. silver resources.  Previous drilling spent over $100 million drilling the property.   
$66 mil MC / 261 mil = $.25/oz.
You get “approx” 25 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 60% of 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 1.07/lb. = $2.14 Billion. Total asset value: $3.4 Billion

Copper continues to move up.  It’s at $1.07/lb. now, and analysts are beginning to recommend copper plays.  MNMM is both copper and silver!  (Also, consider Western Silver formerly Western Copper)  Someday soon, investors are going to rush into copper opportunities, if they are not already.  Mines Management will benefit from this.

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 less depending on how economic they decide to do things.   They are working on a feasibility study, and avoiding excessive dilution, which is a plus. 

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.

For more on MNMM see

I own shares of MNMM.OB.  

Ray Brown, 530-873-4394
70 mil shares
@ share price $.10 /share
$7 mil MC
Three main properties:
Bromide– 372,000 ounces of gold?
Silver Bell–15 mil oz silver?
Deer Trail –287,000 ounces of gold and 27 million ounces of silver… but the lease on the Deer Trail will expire June 1 2004, so they need to raise significant money.
49 mil oz. total.
$7 mil MC / 49 mil oz. = .14/oz.
You have an expiring lease on “approx” 44 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:  They need $4 million to exercise their option to buy the “Deer Trail” property.   They are considering various options on how to do that.  Ray Brown has been in this business a long time, and is excited that he’s got a bunch of younger guys working on the property now, and he’s encouraged by the upward direction of the price of precious metals.

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. 

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.  

(The order is by largest market cap first, not by “comparative value”.)

Sabine Goetz, Investor Relations – 604.488.2657 
Fully Diluted     27,735,000 with Nov. 6th 2003 Private Placement
@ share price $5.40 x .77 US/Cdn = $4.16 
$115 mil MC

Additional comments:  III.TO raised $10 million in the Nov. 6th private placement.  

Dianne (IR) Phone: (403) 265-4356
= 344 mil fully diluted  Oct. 7th, 2003
@ share price $.30 CAN x .77 US/Cdn = $.23 US
$79 mil MC
“The company has a policy of not hedging or entering into forward sales contracts.”
Cash flow positive. !!!  –> + 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)
14 projects in the Philippines.
Producing a dore bar of 96% silver and 4% gold from Canatuan project with the following:
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.
+ 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.
$79 mil MC

Additional comments:  This company exploded in price this week from 16 cents to 23.5 cents when they announced that they would be mining in China: “TVI Pacific Inc. Receives Landmark Approval for Wholly Foreign-Owned Enterprise (WFOE) Status From Chinese Government”. see

They are primarily a silver explorer.  The bonus is they are a producer, and likely are cash flow positive, which are both extremely rare for an explorer.  In fact, the other producers mostly all lose money! 

43.4 mil Fully Diluted shares 
@ share price $2.18 CAN x .77 US/Cdn = $1.68  U.S
$73 mil MC

Additional comments:  This explorer has found bonanza high grades in Argentina, which many people consider to be an outstanding benefit, and they are willing to pay much more for such high grades.   Drilling is now underway (Nov. 26th)   

Drilling results were released Jan 6th.  I have no idea how to interpret the grades, but they didn’t seem like bonanza grades. But maybe plenty is there, to compensate, and the deposit is really big, I don’t know. I believe the stock price moved up significantly in response to the news.

FCO.TO FCACF.PK (FORMATION CAPTL) (I own shares) 604-682-6229 
Over 150 mil fully diluted, Dec. 2003
@ .78 x .77 US/Cdn = $.60
$90 mil MC
(Recently completed $10 million financing)
Very large cobolt property: 1-3 million tons of 0.60% cobalt equivalent
Cobalt prices are racing ahead, up to $33/lb.  see
2000 lbs/ton x 0.6% = 12 lbs/ton x $29.50/lb. = $354/ton (rich ore)
Cobolt is $29.50/lb. recently, up from $9/lb. 
Formation Capital owns the Sunshine Silver Refinery (near Sterling Mining), worth $50 million.
Break even cost $5-6/lb cobolt.
The Idaho Cobalt Project is projected to produce 1,500 tonnes of cobalt per annum.
= 3,000,000 lbs. production x about $20/lb profit? = about $60 mil profit/year???
FCO.TO also owns a few minor silver projects.
The cobolt project needs more drilling, and with recent financing, things look bright.
Formation capital will be re-starting the Sunshine Silver Refinery.

I own shares of FCO.TO

* CDU.V  CUEAF.PK (CARDERO RSCS) (I own shares) 
Henk Van Alphen — President (604) 408-7488  
32 million shares fully diluted Dec. 11th , 2003
@ share price $2.47 CAN x .77 US/Cdn = $1.90 US
$61 mil MC
($10 million Cdn cash in the till after $5.9 mil private placement closed on Dec. 11th)
Speculated resources, or “exploration potential”:
Providencia — high grades, could have 100-250 mil oz.
Chingolo — Will finish drilling by secnod week in November — Henk says, “may have 400-600 mil oz. “exploration potential” in 200-300 mil tons of rock.”  They got 30-40 grams (1.23 oz.) on the first drill hole, but hope to find 2-3 ounces silver/ton.  Please note, “exploration potential” is a non quantifiable, non-regulated, unauthorized type of estimate.  It is not 43-101 compliant.  Trading decisions should probably not be made on these kinds of shaky estimates, which may be only hype and hope.  An investor who wants to be protected by US regulations should wait for geologists to pour over the drill results and produce numbers that comply with 43-101 regulations, that may one day appear in a company press release.  (Also, the first time Cardero issued drilling results earlier this year, the stock price was cut almost in half due to lower than expected results.  The stock price has since recovered.)  Nevertheless, here’s how those “exploration potential” numbers work out if you do the math:
$61 mil MC / 500 mil oz exploration potential = $.13/oz.
$61 mil MC / 850 mil oz exploration potential = $.08/oz.
Exploration potential:  you might get about 52 – 87 oz. silver for one oz. silver worth of stock.

Additional comments: *** I wrote an article on Cardero in January, 2003. 

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.   

Providencia 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.V

* AOT.V ASOLF.PK (ASCOT RSCS) (I own shares)
1 604 684 8950
39.7 fully diluted. (Nov 2003)
@ $.31/share  x .77 US/Cdn = .24
$9.47 mil MC (US)
Additional comments: They own 5.82 million shares and 388,000 warrants of Cardero at $.35, which have a greater asset value than their market cap. 

5.82 mil shares x $2.85 x .77 US/Cdn = $13.1 mil (US)
$2.85 – .35 = $2.50 x .77 US/Cdn x 388,000 = $766,000 (US)
= $13.9 million (US) worth of Cardero
$13.9 mil Cardero /  $10 mil MC Ascot = 1.39 
(Inverse: Ascot’s share price is 72% of the value of their Cardero Stock)

The value of Cardero Stock, although an asset, it is not like cash, nor silver.  That much stock is far less liquid.  Ascot might have serious trouble selling that much Cardero stock all at once in the current market.  I suppose Ascot is discounted to reflect the reduced liquidity.  This helps to explain why private placements go out at about 80% of the stock price (20% cheaper), due to the lack of liquidity.  

Nevertheless, this looks like a great opportunity for people who cannot afford Private Placements, since the share price is 72% of the value of their holdings of Cardero Stock.  It’s rare when you can buy a company with a market cap of less value than their assets.

(I’m listing this one out of order, not by market cap, and next to Cardero, because of their position in Cardero.)

I own shares of AOT.V

376 mil shares
@ share price $ .16 
$60 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=br> $60 mil MC / 50 mil oz. = $1.20 oz. 
$60 mil MC / 100 mil oz. = $.60 oz.  ***using this number*** since we are counting these as explorers in this categorgy.
You might get up to 10.5 oz of silver for one oz silver’s worth of stock

Fully Diluted: 224,194,196
@ share price .37 Cdn x .77 US/Cdn = $.28
$63 mil MC

Additional comments:  Eurozinc does have significant silver.

28 mil fully diluted shares (Nov. 19, 2003)
@ share price $2.10 Cdn x .77 US/Cdn = $1.62 US
$45 mil MC

–“MAG Silver Corporation enters the silver market as a powerful force. MAG combines a seasoned management team with two drill-ready geological extensions of high-grade world class producing districts. MAG controls 100% of the Juanicipio property adjacent to the Fresnillo District in central Mexico, currently producing over 12% of the world’s silver from high grade underground vein structures.”

The geologist, Peter K.M Megaw, is also working with  EXN.V, another high grade silver project.  Peter’s philosophy was that it makes sense to go after very high grade silver projects that will be profitable regardless of the silver price.  

Shares Outstanding – 180,721,142
@ .25 at Yahoo! 
(Mining in China)
$45 mil MC

* NPG.V NVPGF.PK (NEVADA PAC GOLD) (I own shares) (604) 646-0188 David Hottman
= 43 mil shares fully diluted (Nov 26th, 2003 including recent PP)
@ share price $1.08 CAN x .77 US/Cdn = $.83 US
$36 mil MC
(up to $10 million cash in the til from recent PP)
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.
$36 mil MC / 200 mil oz. = $.18/oz.
$36 mil MC / 1000 mil oz. = $.036/oz.
The inverse: you “might” get 35 – 175 ounces in the ground for 1 oz. silver.

Additional comments: NPG.V has 10 gold projects, and one silver-but it may be big.  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.)

Explorer in Nevada. They do not really know how much silver they might they have in the Amador Canyon project.  They are doing drilling this fall, 2003, as they just did a $2.5 million private placement, and another $10 million private placement in late November.   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.   

Now that they are well-capitalized with over $10 million dollars, this company will likely do very well as they drill and prove up the deposits across all their properties.

NPG.V recently acquired two more gold properties, producers that collectively produced 45,000 oz. gold per year, that will contribute positively to the bottom line, and provide the income to develop and explore their Nevada gold properties.  An explorer with income may mean less dilution in the future, and significantly better returns for shareholders.

I own shares of NPG.V  

Fully Diluted Issued & Outstanding 23,133,623
@ $1.88 x .77 US/Cdn = $1.45
$33 mil MC
Located in China
2 gold projects and 1 silver  (42% owned).  Explorer
$33 mil MC

* OTMN.PK (O.T. MINING) (I own shares) Jim Hess Tel: 514-935-2445
8 mil fully diluted.
@ share price $3.40/share
$27 mil MC
May have over 600 mil oz. exploration potential. (They think their deposit may be bigger than “the richest hill on earth”, which is located near their property.  Visit the url.)  
$27 mil MC / 600+ mil oz. = .045/oz.
Exploration potential: you “might” get 139 ounces in the ground for 1 oz. silver.

I own shares of OTMN.PK

* MMGG.OB (METALLINE MINE) (I own shares) Merlin Bingham 208-665-2002 
14 mil shares fully diluted (Oct 23, 2003)
insiders buying on 9-10-2003 at about $1.30/share
insiders buying on 12-01-2003 at $1.66/share
@ share price $1.57 US
$22 mil MC

Additional Comments:  Zinc & Silver in Mexico: Sierra Mojada.  Sierra Mojada is a Silver District!
Silver: Historic production was 10 mil tons of high grade ore… historic silver production went right “direct shiped” to the smelter, non-milled.  It contained 500-1000 grams silver/ton, or 17.65 to 35 oz. ton.  This means 170-353 million ounces of historic “high grading,” non-milled, production.
(Who knows how much silver is left?)  That’s the question with an explorer.

Zinc: Very high grades: 11.8% zinc.  Potentially the lowest production cost in the entire zinc industry due to new “oxide deposit” chemical extraction process as revolutionary as “heap leaching”.  Exploring for up to 4 Billion pounds zinc.

Project ownership:  MMGG terminated the buy-in agreement with Penoles, who went into default, so MMGG now owns 100% of the project!  See

I believe this is very good for MMGG, since the Penoles agreement made it more difficult to quantify the value the company.  Now, it is easier to value the company, and the existing shareholders will own more of the project and profits.  It is important to note that MMGG took the initiative to terminate the agreement.  Penoles did not issue a statement indicating any intent to walk away.  Penoles’ delay or indecision caused them to lose the rights to their buy-in option agreement.  Just like if you have an “in the money” option, it’s a mistake to let it expire.

For more, see the research works article here:

(Merlin of MMGG.OB, and Harlan of EXR.V (friends, actually) both have reports that will educate you on the bullish story for Zinc.)

I own shares of MMGG.OB

IAU.V ITDXF.PK (INTREPID MINRLS) Stephen Coates, Investor Relations (416) 368-4525
41.6 fully diluted w/ Dec. 9 financing?
@ share price $.78 CAN x .77 US/Cdn = .60 US 
$25 mil MC
$3.2 million cash from Dec. 9 financing.
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)
$25 mil MC / 53 mil oz. = $.47/oz.
Hopefully, you get 13 ounces in the ground for 1 oz. silver. 

Additional comments:  IAU was featured positively by John Embry of Sprott Asset Management on Saturday, Jan 16th. 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.  

IAU.V released drill results, Jan 6th.

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.

SML.V SMLZF.PK (STEALTH MNRLS) 604-306-0391 Bill McWilliam, Chief Executive Officer
48,197,893  (August 31-02)
@ share price $.55 x .77 US/Cdn = .42
$20 mil MC

Jay Oness Toll Free: 1-888-456-1112
41? mil diluted??? Oct 2003?
three main properties in North America
@ $.62 CAN x .77 US/Cdn = $.48 US
$19 mil MC?

QTA.V is a Sister Company to Western Silver, WTZ above.  

87 mil shares fully diluted (Jan 9, 2004 press release)
(Previously, I had listed a number of 114 mil shares, which was, apparantly incorrect.  I don’t know how the mistake was made, or what my source was for the 114 mil shares.)
@ share price $.26 Cdn x .77 US/Cdn = $.20 US
$17 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.” 
EXN to own 51% of the project.  Apex is the joint partner. 51% x 6.2 mil oz. = 3.16 mil oz.
(Company expects 114 mil shares fully diluted after takover of Destorbelle, needed to bring project ownership up to 51%)
$17 mil MC 

Additional comments: “Excellon …is exploring and developing”…. “a Bonanza grade Silver deposit in Mexico.”   The geologist, Peter K.M Megaw, is also working with MAG.V  From J. Taylor’s write up on 2002: “After subtracting capital cost of US $1.8 million, custom milling charges and operating costs, management believs this underground development mine can, over the next two years, generate US $15.8 million or nearly $8 million for EXN’s 51% share.” The company plans to use these proceeds to further drill and explore the property.  They believe the property may contain significantly more silver, as if what’s known is only the tail of the tiger; furthermore, they believe they can fund exploration by mining the high-grade silver deposit that has been partly drilled.

Larry Glazer CEO 1-800-810-7111
63 mil shares fully diluted
@ $.37/share x .77 US/Cdn = $.29 US
$19 mil MC
Location: northern Peru
Do they even own their properties anymore?
Manhattan stock sinks after Peru ends mine deal
$19 mil MC / ???

Additional comments:  The Peru government revoked the mine concessions.  MAN.TO is consulting their attorneys.  This is a clear example of the RISKS inherant in mining stocks.  

20 million shares fully diluted 
@ share price $1.05 CAN x .77 US/Cdn = US $.81
$16 mil MC 
“Esperanza Silver Corporation is solely dedicated to the identification, acquisition and exploration of new silver projects.”   Looking for high grades.

* NBG.V NBULF.PK (NEW BULLET GP) (I own shares)
50 mil shares fully diluted (including 15 mil new PP)
@ share price $.40 Cdn x .77 US/Cdn = $.31 US
$15 mil MC
NBG.V has a gold deposit in Brazil that’s bigger than the silver project in Mexico.
” If the deposit extends to considerable depth, as do many of the silver deposits in the region, it is reasonable to assume a deposit of 300 million ounces of silver.” 
Stroud Resources, JV partner, lists the deposit at 150-300 million oz.
NBG.V partners with SDR.V
NBG.V to get a 50-70% interest. 
50% x  150 mil oz.= 75 mil oz., 70% x  300 mil oz. = 210 mil oz.
$15 mil MC / 75 mil oz. = .20 oz.
$15 mil MC / 210 mil oz. = .079 oz.
Exploration potential = 31 – 86 oz. per oz. worth of shares.

I own shares of NBG.V

SDR.V (STROUD RSCS) (There is no PK symbol as yet) Mr. George E. Coburn, President Tel: 416-362-4126
Fully Diluted 69,745,562
@  .16 x .77 US/Cdn = .123
$8.6 mil MC
JV partner with NBG.V on Santo Domingo Silver Project in Mexico.
150 to 300 mil oz.
$8.6 mil MC / 30% 150 mil oz. (45 mil oz.) = .19 oz.
$8.6 mil MC / 50% 300 mil oz. (150 mil oz.) = .07 oz.
Exploration potential = 33 – 104 oz. per oz. worth of shares.

39,240,457 shares fully diluted
@ $0.56/share x .77 US/Cdn = .43 US
$17 mil MC
–About 6 properties in Peru  (I wonder if Peru presents a significant political risk, given what happened to MAN.TO, or whether that was an isolated case in Peru?  I don’t know either way.)

32.4 mil shares fully diluted
@ share price $.56 x .77 US/Cdn = $.43
$14 mil market cap 

Additional 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.

I own shares of GNG.V

1-877-859-5200 ask for John Robinson
39.4 mil shares
@ share price $.40 CAN x .77 US/Cdn = $ .31 US
$12 mil MC 

Additional comments: silver in cuba. (final feasibility study completed by Rescan-Hatch) gold in Timmins, Ontario.  If there’s a final feasibility study done, it either means they should be close to production, or there should be some good data available on a reserves picture.  But I just don’t have it yet.  Note to self: call these guys!

Bill Hoyt, 785-383-9246
“2.3 million shares outstanding, positive working capital and no debt”
@ $5.25/share
$12 mil MC
Historic estimate: “defined Conjecture mineral reserves of 706,000 tons grading 11.8 ounces per ton (oz/t) silver”
–the Conjecture Mine, with a lease-option agreement signed with Shoshone Silver Mining Company
= 8.3 million ounces of silver (leased out)  Since Chester will be receiving royalties, it makes it harder for me to value this company.
$14 mil MC

Fred or Grant Brackebusch
18.7 fully diluted (July 2003)
@ share price $.72 US
$13 mil MC 
 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.

25.6 mil shares outstanding (3q 2003 report June, 2003)
@ share price $.63 CAN x .77 US/Cdn = $.49
$12 mil MC

Toll-free 1-888-805-3940
16 mil shares outstanding   Use “fully diluted” to be safe.
@ $.87 share x .77 US/Cdn = .67
$10.7 mil MC
Adjacent to Barrick’s silver property, which is “the fifth largest silver producer in the world”.
“The Property was once almost bought for $34.5-35 million in 1996.”

I own shares of KRE.V

7.4 mil shares issued
@ share price $1.93 CAN x .77 US/Cdn = $1.48 US
$11 mil MC 

Scopio begins contstruction on new mine.

Michael Townsend, President
Toll Free: 1-866-669-9377
Richard one of the IR guys.
25-27 mil fully diluted. (Nov-Dec ’03)
+ 12.66 fully diluted shares in Jan 7 financing.
= 38.66 fully diluted? (Jan 7, 2004)
@ share price $.30/share x .77 US/Cdn = .23
$9 mil MC
see also Teuton Resources Corp (TUO.V)
Additional Comments:  –Bonanza grades.  Newmont called them, noticed the property.  Flew out a guy.  El Tigre in Mexico: gold/silver  bonanza style mineralization.  Top grades:  62g/T gold 15,500g/T  silver historic production, from trenching and surface sampling in late 90’s.  Cash on hand: $500,000 CAN

Bill Hoyt, 785-383-9246
12 mil shares
@ .67/share 
$8.4 mil MC 
In Cour d’Alene, near CDE, HL, & SRLM.PK

16.3 mil shares outstanding 
(fully diluted?)
@ shar price $.59 share x .77 US/Cdn = .45 US
$7.4 mil MC
Bonanza grade “grab samples” in southern Argentina near IMA

SRY.V (STINGRAY RSCS) (416) 368 6240
fully diluted 5.9 mil
@ 1.42 x .77 US/Cdn = 1.09
$6.4 mil MC- Current projects centered in the Sierra Madre Belt of Mexico 

CBE.V CBEFF.PK (CABO MINING)(I own shares) (604) 681-8899 John Versfelt, President
Fully diluted subtotal, including shares needed to acquire two drilling companies, which is contingent upon a financing.
= 18,208,314 as of December 31, 2003 (Post-Consolidated)
Plus a proposed $5 million financing to acquire the two drilling companies.

@ share price $.61 Cdn x .77 US/Cdn = .47
$8.5 mil MC
Cabo Mining issued a 4 page press release on Jan. 5 detailing their contracts to acquire two drilling companies.  They did a 5-1 share consolidation, or “reverse split”.  It’s like, instead of having 5 dimes, you now have a 50 cent piece.  Five shares become one share, and the price per share moved up by five times.  It can help the liquidity of trading and narrow the spread between the bid and ask, since the bid and ask might be 52-54 cents, instead of being from 9-11 cents, which would be like a spread of 45-55 cents.

Regarding the contracts to acquire two drilling companies in Canada:  With all the money raised lately by so many companies to do exploration work now that precious metals prices have increased, I think drilling companies will be very busy making money.  

Cabo Mining is in Cobalt, Ontario, which is a Silver and Cobalt district.  Cobalt prices are racing ahead, more than trippling, up to $29.50/lb up from $9/lb.    To learn more about the mining camp town of Cobalt, there is a fascinating article detailing the history of the camp at

I own shares of CBE.V

17.2 fully diluted
@ .38/share x .77 US/Cdn = .29
$5 mil MC
Silver projects:
Yukon –grab sample of 611 g/t Ag
Argentina –samples from 31 to 5640 g/t Ag

Dino Cremonese, P.Eng. President (604) 682-3680
20.6 mil fully diluted (July 28,2003)
@ share price .25 x .77 US/Cdn =.19
$4 mil MC
“Management of Teuton and Lateegra are highly encouraged by the prospective results from the Del Norte exploration to date
located in the Eskay Creek region”

14.3 mil fully diluted (July 15, 2003)
@ share price .23 Cdn x .77 US/Cdn = .18
$2.5 mil MC 

Guilford Brett, IR (604) 682-2421
9.2 mil shares outstanding
@ .17 x .77 US/Cdn = .13
$1.2 mil MC

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 two key figures needed to get the “price per oz.” in the ground.  You need: 1.  The number of shares fully diluted x share price to get the market cap.  Then, 2., 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 researching for silver companies, and let me know if you find any good ones, and I’ll add them to this list.

Legend Mining LEG.AX
specialising in exploration and production of silver.
Silver at the Munni Munni Joint Venture in the West Pilbara region of Western Australia

Malachite Resources MAR.AX

Mountain Boy Minerals Ltd (MTB.V)
TEL: (250) 636-9283
high grade samples:  3640 g/T Ag to 45.5 g/T Ag

Mascot Silver Lead Mines MSLM.PK
Coeur d’ Alene, Idaho
“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…”

Silver Buckle Mines Inc (SBUM.PK)
Coeur d’ Alene, Idaho

Fischer-Watt Gold Co Inc (FWGO.OB)
Coeur d’ Alene, Idaho
George Beattie, 208-664-6757

Merger Mines Corp (MERG.PK)
Coeur d’ Alene, Idaho 216,559,942 Fully Diluted shares
oxus will spin off:  Khandiza is a high-grade zinc, silver, copper and lead deposit located in the Sariasia region of southeast Uzbekistan.

Silver Mountain Lead Mines Inc (SMLM.PK)

Silver Butte Mining SIBM.OB
(mine abandoned in 1996, copper/zinc waste water?)

Silver Verde May Mining Co (SIVE.PK)

Metropolitain Mines Ltd (MEMLA.PK)

Silver Surprize Inc (SLSR.PK)

Standard Silver Corp (SDSI.PK)

Horn Silver Mines Co (HRNS.PK)

Golden Phoenix Minerals Inc (GPXM.OB)
“The bars totaled 480.8 ounces and refining returned 228.2 ounces of gold, 243 ounces of silver and 8 ounces of other material. The gold has been sold at about $408 per ounce and the silver has been retained waiting for a higher price.”
–even gold miners are holding back from selling silver!

GoldSpring Inc GSPG.OB

Andean American Mining Corp AAG.V ANMCF.PK

Langis Silver & Cobalt Mining Co Ltd  LSM.V
Phone: (416) 628-5936

Ross River Minerals Inc (RRM.V RRMLF.PK)

Silver Bowl –not yet public?

Contact: Bill Murray
Tel: 1-250-832-0336
Not yet public, looking for a listed shell on TSX
–The 12th largest undeveloped silver property in BC Canada
10.5 million oz. silver, average grade 24 oz/ton

Bill Murray also has another high grade silver property, no reserves. About 13 ton
was shipped [hand picked] the grades were 51 grams/ton gold and 4456 grams/ton silver
(that’s 4.4 kilos/ton silver!)

Articles like this one, that present opportunities like 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 on the internet. I’ve seen markets moved even by small private newsletters such as and (I subscribe to both). 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.

This report, and my method of valuing silver companies, depends on a much higher price for silver than exists today to be most accurate and most successful.  If silver prices go up significantly, my picks will do well.  If silver prices remain flat, then many of my picks should not do well.  

To learn more about the silver market:

For information from the SEC on how to protect yourself from a “pump & dump” scam, see

Several people have told me that they don’t get information this good even when they sign up for annual newsletter subscriptions from others that cost from  $100 – $300.

You can help to make sure you can keep getting this report for free if you sign up at The Silver Stock Report

Jason Hommel
The Silver Stock Report

Final Disclaimer:  I have not received any compensation from any company for writing up my weekly report on “Silver Stocks–Comparative Valuations”.  I own shares of the following 20 silver stocks: ADB.V, CZN.TO, MNMM.OB, SRLM.PK, CBE.V, CDU.V, NPG.V, CFTN.PK, GNG.V, EXR.V, SVL.V, MMGG.OB, AOT.V, TM.V, OTMN.PK, FCO.TO, KRE.V, FR.V, NBG.V, ASM.V.  These are required disclaimers by the SEC: whether I’ve been paid, and what I own.  I believe the SEC intended this to be a cautionary note that I own these shares, not as a recommendation or endorsement.  I reserve the right to buy or sell any stock at any time.