Silver Stocks–Comparative Valuations
Weekly Report # 30
by Jason Hommel
The Silver Stock Report
FRIDAY, April 9th, 2004
This week’s report lists 102 silver stocks. There are 31 silver stocks that list reserves, resources (and exploration potential.) which I calculate by using my “ounce in the ground” formula. There are 47 explorers. There are about 24 additional “silver” stocks with incomplete information. Additions & Changes from last week are in bold.
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To read about my religious bias, see my other website, bibleprophesy.org 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. To read more about my religious bias when it comes to investing, see my essay, Biblical Guidelines for Managing your Money
Kitco reports silver at $8.14 as of Friday, 3:00 PM West Coast US, which was used to calculate the following figures. The CAN $ / US $ conversion factor is .7531. I will use .75 for ease. Silver continues to rise, from Friday to Friday for the past 7 weeks. Report #29: $8.12, #28: $7.71, #27: $7.53, #26: $7.03, #25: $6.95, #24: $6.70, #23: $6.49
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. / valuation price change since last week relative to silver price change (and stock dilution, and resource changes, if any) / additional comments (EXPT is “exploration potential”)
- HL (HECLA MINING CO) .31 down –current producer (gold bonus) cash rich.
- ABX (BARRICK) 1.1 even –infamous hedger (18 mil oz. gold hedged, 3 yrs production)
- IPOAF.PK (INDUSTL PENOLES) 1.4 up –current producer, mostly family owned.
- CDE (COEUR D’ALENE) 1.5 down –current producer, (gold bonus) in debt.
- SIL (APEX SILVER) 3.7 down –large zinc bonus, low grades, cash rich–$345 million! in debt
- CFTN.PK (CLIFTON MINING) 3.8 up — (90 EXPT) (colloidal silver patent bonus)
- GRS GAM.TO (GAMMON LAKE) 4.0 up –current producer, owns 26% of Mexgold
- FSR.TO FSLVF.PK (FIRST SILVER) 4.4 down –current producer, (not profitable ’03 3rd q.) unhedged
- MFN MFL.TO (MINEFINDERS) 4.7 down –significant gold bonus, $35 mil cash on hand.
- KBR.V KBRRF.PK (KIMBER RSCS) 5.2 down A one property company, high grades, with exploration potential.
- PAAS (PAN AMERICAN SILVER) 5.3 down –current producer, in debt.
- HGM.V HOGOF.PK (HOLMER GOLD) 5.4 down –silver project in cuba, large gold project bonus.
- WTZ WTC.TO (WESTERN SILVER) 5.6 down — (24 EXPT) large mine development cost. copper & zinc bonus
- * TM.V TUMIF.OB (TUMI RSCS) 5.8 down — (11 EXPT) recent bonanza grade silver discovery
- MGR.V MGRSF.PK (MEXGOLD RSCS) 7.4## up (##exploration target) — bonanza grade discovery on Jan 13th
- SSRI SSO.V (SILVER STD RSC) 8.1 down –multi-property company, understands silver story
- ORM.V OREXF.PK (OREMEX RES) 8.1 up (34 EXPT)
- CZN.TO CZICF.PK (CDN ZINC) 9.9 down –large zinc bonus, high grades, low start up costs, great EXPT
- SRLM.PK (STERLING MINING) 17 down –(45 EXPT) acquired the Sunshine in Cour d’Alene
- RDV.TO RDFVF.PK (REDCORP VENTURE) 17 up –60% gold bonus
- FAN.TO FRLLF.PK (FARALLON RSCS) 19 up –(33 EXPT) low grades, silver 1/3; also gold & zinc bonus.
- HDA.V (HUSIF?) (HULDRA SILVER) 20 down –very tiny, no debt, zinc bonus, low start up costs.
- EXR.V EXPTF.PK (EXPATRIATE RECS) 20 down –significant zinc bonus 60% zinc, 25% silver
- * PLE.V (PLEXMAR RES INC) 21 down
- * MGN (MINES MGMT) 21 up –60% copper bonus (low grades), start up cost ~ $250 mil
- ADB.V ADBRF.PK (ADMIRAL BAY RSCS) 22 down –actively expanding resources. (Huge gas bonus)
- * SVL.V STVZF.PK (SILVRCRST MINES) 22 down –(38++ EXPT) –(Silver in Honduras) ++ added resources last week.
- CHD.V CHDSF.PK (CHARIOT RSCS) 25 down (explorer, with inferred resources)
- ASM.V ASGMF.PK (AVINO SILV GOLD) 26 down –owns 49% of the Avino +4 other silver props. (silver bonus)
- GGC.V GGCRF.PK (GENCO RESOURCES) 26 down
- UNCN.OB (UNICO INC) 58 up –lease expiring on largest property, June 1 2004.
* = I own shares
Explorers (by market cap, in millions):
- * IMR.V IMXPF.OB (IMA EXPL)
- EZM.V EZMCF.PK (EUROZINC MINING)
- CDU.V CUEAF.PK (CARDERO RSCS) 43-74 “exploration potential”
- AOT.V ASOLF.PK (ASCOT RSCS) — owns percentage of Cardero, CDU.V
- MCAJF.PK (MACMIN LTD)
- * FCO.TO FCACF.PK (FORMATION CAPTL) Cobolt (and Sunshine silver refinery)
- TVI.TO TVIPF.PK (TVI PACIFIC) –current producer of a dore silver bar 96% silver, 4% gold
- * FR.V FMJRF.PK (FIRST MAJESTIC) — Bought a former silver producer. Acquiring silver properties.
- * NPG.V NVPGF.PK (NEVADA PAC GOLD) 35-173 “exploration potential” (owns 1 silver property, 10 gold properties)
- SPM.V SMNPF.PK (SCORPION MINING)
- MAG.V MSLRF.PK (MAG SILVER)
- IAU.V ITDXF.PK (INTREPID MINRLS) 7 “exploration potential”
- * MMGG.OB (METALLINE MINE) –zinc/silver (historic high grade silver) (low cost revolutionary oxide zinc process)
- * OTMN.PK (O.T. MINING) very large exploration potential
- ECU.V ECUXF.PK (ECU SILVER MINI) 4.1 down –(11 EXPT) –50% gold bonus
- CAUCF.PK (CALEDON RES)
- MMM.TO MMAXF.PK (MINCO MINING)
- MAI.V MNEAF.OB (MINERA ANDES) (gold bonus)
- * EDR.V EDRGF.PK (ENDEAVOUR GOLD) A PRODUCER (I could not yet find a listing of resources or reserves)
- BZA.V ABZGF.PK (AMER BONANZA)
- DNI.V DMNKF.PK (DUMONT NICKEL) exploring Clifton’s property
- EXN.V EXLLF.PK (EXCELLON RSCS)
- BCM.V BCEKF.PK (BEAR CRK MINING)
- NJMC.OB (NEW JERSEY MIN)
- * CMA.V CRMXF.OB (CREAM MINERALS) 144 “exploration potential”
- * KG.V KDKGF.PK (KLONDIKE GOLD)
- * CBE.V CBEFF.PK (CABO MINING) –Historic Silver and Cobalt district
- SML.V SMLZF.PK (STEALTH MNRLS)
- NBG.V NBULF.PK (NEW BULLET GP) 42 – 122 “exploration potential”
- SDR.V SDURF.PK (STROUD RSCS)
- CHMN.PK (CHESTER MINING)
- EPZ.V ESPZF.PK (ESPERANZA SILVR)
- GNG.V GGTHF.PK (GOLDEN GOLIATH) –Historic silver district in Mexico
- MMG.V MMEEF.PK (MCMILLAN GOLD)
- SHSH.PK (SHOSHONE SILVER)
- * KRE.V KREKF.PK (KENRICH ESKAY)
- EGD.V EGDMF.PK (ENERGOLD MINING)
- PCM.V PAOCF.PK (PAC COMOX RES)
- LEG.V LEGCF.PK (LATEEGRA RSCS)
- BGS.V BLDGF.PK (BALLAD GLD SLVR)
- * AUN.V AUNFF.PK (AURCANA CORP)
- SRY.V (STINGRAY RSCS)
- TUO.V TEUTF.PK (TEUTON RES)
- ASLM.PK (AMER SILVER MINI)
- BBR.V BBRRF.PK (BRETT RES)
- ROK.V ROCAF.PK (ROCA MINES INC)
- CBP.V CPBMF.PK (CONS PAC BAY MIN)
* = I own shares
Silver oz. “in ground” means and 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 into buying shares in the company at current prices. Here’s the math on how to get it. 1. Get a market cap in U.S. dollars. Divide that by the silver price, so the market cap is denominated in terms of silver ounces. Then, divide the ounces in the ground by the market cap as denominated in silver. This tells you how many ounces of silver in the ground you are buying when you give up one ounce of silver in you hand for shares of stock, instead.
(It does not include zinc, or copper, or lead, but it does include gold at a 1:10 ratio of gold:silver.) At goldsheetlinks.com, 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.
If I use a word you don’t understand and is not listed in the dictionary at www.m-w.com you can look up the meaning at http://investorwords.com/
WEEKLY COMMENTARY (All new in this section):
The link above contains two outstanding and short articles on silver by Sol Palha and Alan Lunt of www.tacticalinvestor.com
Key phrase: “When silver breaks free of the COMEX it will be of such value that it’s “spending power” will be greater than it was under the gold standard for the simple reason that there is a lot less of it.”
My comments: Well, what did an ounce of silver buy during the age of the gold standard? I remember reading an article where a man’s suit was sold for $1.50 in a Sear’s catalog in the early 1900’s. That coinage contained about an ounce of silver. Today, I suppose the equivalent would be a suit from the Men’s Wearhouse that would run about $300. Yes, an ounce of silver will soon buy perhaps about 2-3 men’s suits, and be worth about $600 to $900 in today’s money, because silver is so very, very, very scarce these days compared to the olden days. We used all the silver up, and melted most of the coinage down to take pictures, and build electronics over the years. It’s just about all gone! And now we are using the equivalent of rocks, or beans for money, that somehow, is “worth a lot”. One day, the people will wake up, and realize the fraud of paper, and when they turn to silver, the price will just explode. And when the dust settles, the real buying power value of silver… and who cares how many dollars that will be then… will be just tremendous compared to what an ounce of silver is worth today.
April 7, 2004
Silver a Sell, Unless The Jig is Up
By Brady Willett
In the article above, the author concludes, “Although I have my doubts that the jig will ever really be up, if the manipulation is exposed look for panicked buying in silver and plenty of defaults.”
My opinion is that, yes, the Jig is Up, so silver is a buy!
Amazingly, Brady Willett just exposed the manipulation! Thus, he should expect panic buying at any time! And so do I!
Title: Exchange to Increase Margin Rates on Silver Contracts
NEW YORK, N.Y., April 6, 2004; The New York Mercantile Exchange, Inc., announced today that it will increase the margins on its COMEX Division silver futures contracts at the close of business tomorrow.
The margins for all months will increase to $2,500 from $2,000 for clearing members and members and to $3,375 from $2,700 for customers.
My comments: The margin increases are often said to be a reflection of the desperation of the shorts, and said to mean that the shorts are playing manipulative games, and changing the rules in order to scare the longs to sell.
At first glance, it may seem rather manipulative and unfair to give the longs what looks like a margin call, when they are ahead. Usually, the longs get margin calls only when silver is down, not up! It’s like they want more money from the paper longs whether silver is up or down! On the surface, it seems rather unfair. But let’s analyse it with the 7th grade math here.
Back when the margins were last raised a few months ago, silver was about $6.50, and the margin was $2700 for a contract of 5000 oz. Thus, this means a person could “control” $32,500 worth of silver ($6.50 x 5000) for $2700, which is like a down payment of about 8% (2700/23500).
Now, as silver rose to $8/oz., the value of the contract also rose to $40,000 ($8 x 5000), yet the margin stayed the same, at $2700. Now, the margin will be $3,375. Is that any more or less than the 8% that was required to hold a contract? Let’s see, 3375/40,000 = just about 8%.
Now, that seems rather fair. That the margin stays the same, about at 8%. And in the meantime, from $6.50 to $8.00, the paper holder who put down only $2700 to hold a contract, held a contract the value of which changed from $32,500 to $40,000. That is a gain of the difference of $7500. (40,000 – 32,500). And now, this contract holder is being asked to put up at least 8% per contract again, and put in an additional $675 (3375-2700). Now, given that a paper long just made $7500 (on a $2700 investment) from the time of the last margin call a few months ago, and is now being asked to put $675 back in to continue to hold on to his contracts, does not seem unfair at all to me, not in the slightest.
I think the complaining that goes on around these margin hikes just goes to show the shameless and excessive greed of the paper longs, that they would even remotely complain in the slightest about such a tiny margin increase, that is really no increase at all, but just keeping pace at about 8% of the value of the contract!
Now, I do not support, nor recommend, buying or selling futures contracts. Please don’t misunderstand me… I’m not arguing in favor of the shorts, or in favor of arbitrary “rule changes”. I condemn the shorts far worse than the longs, but I condemn them both.
How can a person really “control” what is not yet his, not paid for, and not delivered to him? The long is NOT in control, and is being deceived and taken advantage of… deceived by his own greed and attempt to take a short cut to gaining wealth. The long will likely be defaulted on, the long cannot, in the end, receive the silver that he thinks he can control, but does not exist.
And how can a person sell what he does not possess? Such a short is a liar.
And so, I recommend taking physical possession of the silver that you think you own. Whether you own bullion at CEF, or at a bullion account, or whether stored at the COMEX, or whether through a paper futures contract, or option. You don’t “control” your silver unless you have silver in your possession, in your own safe, the combination to which you know, the door to which you can open and shut at your command. Then, you “control” your silver, and not before. Anything less, is less than honest. Don’t lie to yourself and say you own and control silver that is in the possession of another person!
A receipt or silver certificate is NOT the same as silver bullion. The dollar was once a silver certificate. A promise is fundamentally different from silver bullion. The promise of an honest person with high integrity, and with lots of money is still just a promise. Bullion in the hand is a different thing, it is payment in full.
Need I remind the market that four years ago Handy and Harmon, the world’s largest silver refiner, went bankrupt? They could not honor their promises to deliver silver, and went out of business. Major silver miners, such as Pan American Silver, who sent silver ore to Handy and Harmon for refining lost everything they had on deposit! This refiner tried to operate their business as a bank, and they made more promises than they could deliver. Who knows whether your bullion depository company is doing the same thing? Do you really think a huge company would go into business to store your bullion, merely out of the goodness of their hearts? How likely is it that these bullion holding companies would never develop a greedy eye towards all the wealth they have in their control and in their possession?
Some Chrisitans are especially concerned about some verses contained in the Bible, regarding the possession of physical gold or silver bullion. Enough people have asked me about this verse that I must address it. If you don’t want to read about Christians who are concerned about what their Bible says, please just skip this next part of my weekly commentary.
Matthew Chapter Six verses 19-34:
19* “Do NOT lay up for yourselves an earthly treasure. (silver, gold and precious stones, fine fabric, etc.)
Moths and rust corrode; thieves break in and steal. (gold and silver – a steel safe, or a gun case, a gun, and a guard dog as you have suggested in your latest newsletter is directly opposed to your Christian faith and would be also against your Bible Prophecy interpretation if you would not have been influenced by your own bias toward buying and saving silver bullion) 20* Make it your practice INSTEAD to store up heavenly treasure, which neither moths nor rust corrode nor thieves break in and steal. 21* Remember, where your treasure is, there your heart is also. 22* The eye is the body’s lamp. If your eyes are good, your body will be filled with light; 23 if your eyes are bad, your body will be in darkness. And if your light is darkness, how deep will the darkness be! 24* No man can serve two masters. He will either hate one and love the other or be attentive to one an despise the other. YOU CANNOT GIVE YOURSELF TO GOD AND MONEY. Jason, you can read the rest of the Chapter for yourself if you will.
Your recommendation to purchase silver bullion is DIRECTLY opposed to your Christian believe system
and your encouraging others to do the same is heaping more and more responsibility upon your shoulders subconsciously.
Jason, how do you rationalize this to make it seem right when you know it is against Christ’s principle’s…?
I agree about God’s laws concerning money (gold and silver) and investing in stocks thereof, and other forms of those kinds of investments perhaps even a Mutual Fund devoted to such (do you know of any?) – you might want to mention in your newsletter also; but to actually store up silver treasure needing a gun safe, a gun and gurard dog to protect from “THEIVES” as you recommend….I don’t understand…? Could it be your faith has been clouded over by your lust for silver treasure…?
Jason, why NOT purchase silver bullion at E-Bullion.com where one has none of the logistics or safe storage problems and where they guarantee they “already” have the purchased amounts backed by physical gold or silver…?
Your brother in Christ Jesus,
Very, very, very good question. And I do not have time for these kinds of questions these days, but nevertheless…
Do NOT lay up for yourselves an earthly treasure
Do not lay up FOR YOURSELVES an earthly treasure
I see that treasure is not wrong when used to further the gospel, and when you use your wealth to further the gospel, you are storing up treasures in heaven. In order to answer a question about what the Bible says, I need to reply with what the Bible says.
1 Timothy 6:17 Charge them that are rich in this world, that they be not highminded, nor trust in uncertain riches, but in the living God, who giveth us richly all things to enjoy;
18 That they do good, that they be rich in good works, ready to distribute, willing to communicate;
19 Laying up in store for themselves a good foundation against the time to come, that they may lay hold on eternal life.
I see it is how you use your treasure that is most important. Perhaps spending your treasure, silver, to promote the gospel when people are not receptive, is not wise. After all, the Bible says to speak to people who will listen, and to shake the dust off your feet if they don’t. I think it may be better sometimes to wait until the people are more ready to listen, and when your capital will have more value, both monetarily, and spiritually. In which case, you will have made a wise investment!
In any event, the fraud of the dollar can never be said to be approved by God, even though man prints “in God we Trust” on the abomination of unjust weights and measures.
Others translate “do not lay up for yourselves an earthly treasure where moths and rust corrode and where thieves break in and steal.”
There are two instructions here. First, “don’t invest in treasure that will rust”. Incidentally, gold and silver are such treasures that are not susceptible to corrosion and deterioration! Thus, the passage is an indirect recommendation for gold and silver! It would be bad to store up a more perishable commodity, such as wool or wheat or iron.
The second instruction is to keep it in a safe place, and not where thieves know where it is. So, put it into a safe and in a well-hidden place! It is just common sense that storing your bullion in a location that is known to thieves, where thieves regularly break in and steal, such as banks, is not wise!
In this case, gold and silver can, indeed, be seen as a heavenly treasure. Gold is a reward from heaven for all your hard work and obedience to the laws of God, such as “you reap what you sow”. In the Bible, also, gold was used inside and out of the ark of the Covenant and Temple. Gold was a blessing to Abraham, and gold was given to the Israelites by the Egyptians when Israel fled Egypt.
If you flee the abomination of today’s monetary system, you, too, can be blessed with gold and silver, and you will get them at prices that are literally, a “steal”.
I understand that the phrase, “you cannot serve God and money” means that you must remain debt free. We were “bought with a price,” and told to “not to become the slaves of men”. A person in debt is a slave to the lender. “The borrower is the slave to the lender”.
If you avoid debt, you avoid the perils of the modern financial system, such as overvalued real-estate, and you avoid futures contracts and options that expire.
Gold and silver do not expire, and do not default. Paper promises expire and default. The two are not the same, and those who observe Bible principles will clearly recognize the difference.
The suggestion to use e-bullion to store your physical bullion is an abdication and rejection of your own personal responsibility to protect your own wealth.
A mutual fund is also and abdication and rejection of your responsibility to look after your own investments. Tend your own flocks, the Bible says.
See for more:
Biblical Guidelines for Managing your Money
The man then responded with the following:
You say: Very, very, very good question. And I do not have time for these
kinds of questions these days, but nevertheless…
Response: I do not have time for these kinds of questions….is like
saying, “I do not have time to consider my relationship with You Lord, Jesus
because I am overcome with greed and lust for silver even though I am
rationalizing I will use it to spread Your gospel; nor do I have time to
consider what I am doing storing up silver when I need to be storing up
treasures in heaven.”
Protecting the stash to me is just another prideful rationalization. As
humans we can rationalize almost anything, even murder and rape, as
Question: Jason, if we are storing up treasures in heaven do we need a gun
vault, a gun (“Thou shalt not kill”), and a guard dog to do so…?
Jason, what if you have to kill the thief you “invited” to your house by
stashing your silver there and not only putting yourself in harms way but
your wife and children, if this is the case; or putting your neighbor in
harms way should they pick the wrong house accidently.
Also, ask yourself this question in regard to using gold and silver to
spread the gospel (another rationalization) Question: How did Jesus send
his disciples to spread the gospel? Matthew Chapter 10, especially 10:9-10:
9* “Provide yourselves with neither gold nor silver nor copper in your
belts; 10* no traveling bag, no change of shirt, no sandals, no walking
staff. The workman, after all is worth his keep.”
I agree with you 100% on the current financial system – are you familiar
Also, thanks for your understanding of “God and money” meaning debt
free…..I never thought of it that way nor was it ever presented to me that
way…….I own my house, my truck and all I have been given as gifts from
the Lord Jesus and would be totally debt free had I not just last month
borrowed $5000 to buy a particular gold/silver/nickel/diamond stock that was
supposed to have some news and move up some….well it moved alright but in
the WRONG direction SO now I am stuck paying the abominable interest
until it finally does move……I was WRONG for doing so, I moved in haste
and in a moment of weakness.
So, you have answered and so have I – perhaps you could put this situation
to all of your subscribers as you did with the young man you referred to in
your last two newsletters to see how it is viewed by other believers.
Take Care. The Peace of Jesus be with you and with all of your family,
friends and neighbors, (Name Removed)
Finally, I responded to that, by intermixing my comments after his with the following:
Thursday, April 8, 2004, 8:44:17 PM, you wrote:
TP> Dear Jason,
TP> You say: Very, very, very good question. And I do not have time for these
TP> kinds of questions these days, but nevertheless…
TP> Response: I do not have time for these kinds of questions….is like
TP> saying, “I do not have time to consider my relationship with You Lord, Jesus
TP> because I am overcome with greed and lust for silver eventhough I am
TP> rationalizing I will use it to spread Your gospel; nor do I have time to
TP> consider what I am doing storing up silver when I need to be storing up
TP> treasures in heaven.”
Now it is harvest time for silver and silver stocks. There is a
season for all things. Now is silver rush time. I would be a fool to
let ripe fruit rot in the fields, and God would chastise me for doing
so. He does in Proverbs.
TP> Protecting the stash to me is just another prideful rationalization. As
TP> humans we can rationalize almost anything, even murder and rape, as
TP> Question: Jason, if we are storing up treasures in heaven do we need a gun
TP> vault, a gun (“Thou shalt not kill”), and a guard dog to do so…?
There is no commandment “thou shalt not kill”
The commandment says, “thou shalt not murder”.
In fact, there are many commandments that we SHOULD kill people…
kill the adulterer, kill the idolater, kill the murderer, and so on.
Have you not read that the prophets had many men killed? Did you not
know that David killed?
You need to think a bit more about what the Bible says.
TP> Jason, what if you have to kill the thief you “invited” to your house by
TP> stashing your silver there and not only putting yourself in harms way but
TP> your wife and children, if this is the case; or putting your neighbor in
TP> harms way should they pick the wrong house accidently.
You missed also the law that says that we have the right to defend
ourselves with lethal force. The thief that is caught breaking up, if
he is killed, no blood shall be shed for him. It’s called
“justifiable homicide” in our code of laws in the US.
I could kill you in an instant if you were trying to take my silver,
and it would be no sin at all in God’s eyes. In fact, it would
probably be a greater sin if I let the thief take the silver, for
then, I would not be able to “provide for my family”, and a man who
does not provide for his house is worse than a man who has left the
faith, and is an infidel!
God’s law gives us the rationalization for private property (not my
pride as you accuse), and God
provides laws and the means to defend it. It is Godless communism
that says we should not be entitled to own property.
TP> Also, ask yourself this question in regard to using gold and silver to
TP> spread the gospel (another rationalization) Question: How did Jesus send
TP> his disciples to spread the gospel? Matthew Chapter 10, especially 10:9-10:
TP> 9* “Provide yourselves with neither gold nor silver nor copper in your
TP> belts; 10* no traveling bag, no change of shirt, no sandals, no walking
TP> staff. The workman, after all is worth his keep.”
Yes, I AM worthy of my reward. Did you not know how much wealth it
took to produce one, single Bible in the old days? It took the modern
day equivalent of hiring a skilled laborer, such as a lawyer, 10
months to produce one copy. It’s like $300,000.
How much can you spread the gospel if you cannot afford to make even
one Bible? You and your rewards would be rather limited.
How much could you spread the word if you had 5 years able to study
the Bible diligently, because you had saved up enough money to do so?
But oh, so many these days just borrow the money, and attend Satan’s
Could you produce Mel Gibson’s movie, the Passion, on nothing? That
took wealth, too.
Oh, but would you argue that in the meantime, wealth should be in the
form of paper money, or that you should borrow?
TP> I agree with you 100% on the current financial system – are you familiar
TP> with NESARA…?
never heard of it.
TP> Also, thanks for your understanding of “God and money” meaning debt
TP> free…..I never thought of it that way nor was it ever presented to me that
TP> way…….I own my house, my truck and all I have been given as gifts from
TP> the Lord Jesus and would be totally debt free had I not just last month
TP> borrowed $5000 to buy a particular gold/silver/nickel/diamond stock that was
TP> supposed to have some news and move up some….well it moved alright but in
TP> the WRONG direction SO now I am stuck paying the abominable interest
TP> until it finally does move……I was WRONG for doing so, I moved in haste
TP> and in a moment of weakness.
Yes, that was VERY wrong. both to borrow, and to jump in without
TP> So, you have answered and so have I – perhaps you could put this situation
TP> to all of your subscribers as you did with the young man you referred to in
TP> your last two newsletters to see how it is viewed by other believers.
TP> Take Care. The Peace of Jesus be with you and with all of your family,
TP> friends and neighbors, ^Tom.
Thank you very much for bringing this topic up for discussion. I
know there is a reward in that, too. Seeking the truth has a great
reward behind it, and you will be blessed.
Tom Replied next with a nice forwarded note, and the comment, “The Peace of Jesus be with you”
The following is another letter to me:
I’ve written you before and know of your objections
to usury. Nonetheless, the —– Deposit Company pman
of buying silver and gold with as little a 20% down
has enabled me to acquire around 9000 oz of silver
plus some gold and palladium on an initial payment of
about $24,000. As the price of silver rises, so does
my equity in the metal, and gives me the option of
adding considerably more silver.
A good man to talk to at —– is —–—–. You
can reach him at —–. If you
do talk to him, please mention my name.
Not only am I against buying bullion on leverage, I’m against storing it with someone else. You are doing both.
Don’t you understand that the —– guys are likely taking your 20%, and likely using it to buy TWO contracts at 10% leverage each?
How can you REALLY own something by paying only 20% for it? Think about it. It’s a scam. All scams end bad, with the scammer scamming the scammee.
Are you scamming them, or are they scamming you?
You think you are scamming them, but I tell you, they are scamming you!
Here is another letter
Something just hit me. Why do they let COMEX set the silver price? Other than commodity producers, what industry lets another organization set the prices they are paid for their products? Does Sears set the prices they pay manufacturers using clothing or garden tractor futures? If that last sentence sounds absurd, that’s my point.
It gets even more absurd, you have COMEX setting the price of something they don’t even have. The Central Fund of Canada is still waiting for a large silver delivery, even so, COMEX still allows more short selling of silver. I think CEF should get an injunction against any more shorting of silver until they get theirs.
In the current situation, I think it is those who actually possess real silver that should be the one’s to set the price. What would be the effect of the following advertisement in the Wall Street Journal?
Caught in the Silver Squeeze?
1000 oz. good delivery silver bars
available for immediate delivery
$500.00 per oz.
Wouldn’t this set a price at which real silver was available for delivery. If COMEX was to default on physical delivery, couldn’t it set the fiat compensation level for those who were denied their physical delivery?
I think Barry raises several very, very good points. The first that I really like, I have underlined. I hear that CEF is still waiting for physical delivery of silver. It is the Commodity Futures Trading Commission’s job to make sure there are no market defaults. The CFTC should be banning all new short positions until and unless they are all covered and unwound. It is healthy for a market to clear out the short positions at least once in a while, especially in light of the reports of shortages, delivery delays, and that the shorts have been short for over 20 years.
His second suggestion, that Longs take out ads in the newspapers to sell silver bullion, is not really needed. Bullion is available for sale at e-bay.com and at bulliondirect.com and many other places. In the end, it will likely be the shorts who will be placing excessive and expensive ads to buy silver bullion to cover their obligations, willing to pay at ever higher prices, and driving up the spot price.
The following commentary appeared at the Daily Reckoning’s April 8th email commentary, titled, “The Unintended Consequences Of Globalization”, and sub-headed, “The myth of the ‘average investor’…”
“The idea that the average person somehow becomes an ‘investor’ simply by buying a mutual fund or a share of Yahoo is a myth and a fraud. He is not an investor anymore than a man who tries to make money at a slot machine in Las Vegas is a businessman. He may wear a suit and tie. He may carry a brief case. He may even tally up his expenses and net them against his income, but he’s really just entertaining himself.
“Warren Buffett is an investor. Carl Icahn is an investor. These are guys who study businesses – in detail – and decide which businesses they want to own.
“The little ‘investor’ doesn’t do that. He merely reads an article in the paper. People are getting older, he discovers. ‘Oh,’ he says to himself, ‘I’ll put my money in nursing homes.’ But this knowledge – that people are getting older – is the kind of knowledge that Nietszche called ‘wissen.’ It is public knowledge… abstract, vague, misleading, and for an investor, worse than no knowledge at all. Just because the average age is increasing doesn’t mean you’re any more likely to make money in a nursing home stock than in a nursery stock. If you buy on the basis of the news, or what your neighbors suggest, or a tip from your broker… you are just gambling.
“In order to invest, you would have to know a lot more; you would have to do actual research, like Buffett does. You have to have what Nietszche called ‘erfahrung’ – practical, experienced-based, direct, often personal knowledge.
“The average guy who buys a mutual fund is not an investor at all; he’s a chump, a patsy, a schmuck. We say that affectionately, of course. Were it not for this guy, most of Wall Street would be out of business. Because what this guy really does is not invest, but consume. He’s a consumer of Wall Street products… he’s the source of financial firms’ revenues and profits. He’s the reason people on Wall Street drive around in big Mercedes and have mansions in the Hamptons.
“The trouble is, you can’t get rich by giving other people your money. And you can’t get rich by spending it, either. The whole U.S. economy only gets bigger by, say, 3% per year on average. So, if you really did ‘invest in America,’ maybe you could expect your investments to rise at a 3% rate. But if you consume the financial industry’s products, you have to realize that the sellers/packagers/brokers/ financiers and so on have to get a cut. And those fellows don’t work cheap. Nobody wants to buy ‘investment’ products from a poor man. So, like Vegas casinos, Wall Street institutions need to spend a lot of money to keep the rubes coming in the door. Warren Buffett once estimated that the financial industry gobbled up nearly a third of all investment gains. Plus, the average lumpeninvestor has to provide higher returns to the ‘smart money,’ the people who actually know what they are doing. This doesn’t leave much for the little guy.”
My comments: While his commentary seems a bit too extreme on a few points, such as “you can’t get rich by giving other people your money,” which sounds like you should never buy stocks, it makes many very good points.
I think that commentary is extremely important to note, especially in light of the extreme volatility of many of the silver stocks lately. Many silver stocks are trading at nearly 50-60-70% of their recent highs of the last few months, and this has happened while silver has screamed upwards in price! Yet many of these stocks have tremendous leverage to the silver price, and still stand to make tremendous gains greater than silver bullion itself. I believe this is the result of the relatively illiquid markets for silver stocks. Many investors must be eager to lock in gains that have been tremendous. Many investors must be relatively inexperienced and may not have the ability to do a proper comparative analysis among the many silver stocks that are available.
This is one reason why I have gone to such trouble to create this huge list. You need to have at least a starting point for understanding all that is out there, before you go about making investments. Investing is WORK, and should be treated as such. How many of you have looked at this list, and actually visited each website on it, taking at least 15 minutes to an hour to go over the contents of each, and take your own notes? That’s at least 25 to 100 hours just to start… before you put a dime anywhere. At 5 hours a day, that’s at least a month of research! And by then, the prices, and number of shares, and drilling results of quite a few of them would have changed! Again, that’s why I keep this list–it arose out of me taking my own notes, for me!
Therefore, until and unless you have the time and energy, and desire, to devote to understanding your silver stock investments, many of the smaller traders may be much better off investing in silver bullion first, and bullion only!
For example, if you only have $2000 to spend, the bare minimum to open a brokerage account, what in the world are you doing messing around with stocks? There is no point, for you barely have the time to earn enough money to keep your head above water! A person in that case first needs to earn more, and second needs to spend less, so they can have at least a reasonable amount of savings to start. And savings of money, means investing in silver bullion, because silver is the best money there is right now.
If, after you have money, then you can put a small portion of your unneeded money out for investment. That’s after you have about a one month $1000 to $2000 cushion in cash, and perhaps $2000 to $5000 worth of silver bullion. And perhaps this means that a person should have at least $10,000 worth of “extra” silver bullion first, before they even think about touching a silver stock. This may shock many people.
I know that the vast majority of people who own stocks have between $2000 and $10,000 with their brokerage accounts. In fact, that is the size of about 90% of all brokerage accounts. I hope they have more at home, in silver bullion, than with their brokers.
My point is that it is not worth your time to become an expert on silver stocks if you have so little money to spend. Why spend 20-40 hours a week trying to determine where to put $5000? Let’s say you make 40% in 3 months, like I did in my marketocracy account from Jan, 2004 to March 2004? You’d make $2000 for your efforts, which is not likely worth your time. If you spent 20 hours a week on that (and I spend more), you’d spend, let’s see, 20 x 4 x 3 months is 240 hours. $2000 / 240 is $8 an hour. Sad. A person may make more money by working hard at a second job for six months… Yet if you were in silver bullion during that time, you also could have made even more, as silver rose from $5 to $8, which was a gain of 60%!
I spend all the time that I do, and yet I still try to allocate at least 20% or more of my portfolio to silver bullion, because I know it has the potential to outpace any little unknown silver stock that may have (or may not hawe) better long term potential.
Silver bullion is where the market is. Silver stocks are just there to help you diversify away from having too much silver bullion around, and to avoid having “all your eggs in one basket”.
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Now, once you study the silver stocks, then you can become a trader. A trader of silver stocks is someone who must be very experienced, very knowledgeable, and up on what many companies are doing at once. This is what I try to do. While I trade some stocks, I have other silver stocks I own that require a 2 year hold time, or a 1 year hold time!
When trading, and placing an order, it’s like I have to bluff, because I place relatively big orders. I can’t just place one big order, for if I did, the market would see it, and the price could run away ahead of me, in front of me, trying to “ride the coattails” of my demand, and I would not get my full order filled, even if I bid 10% over the ask, in some cases! Sometimes, I’ll place a small order for $10,000, and that alone will drive the price up 10%. It’s horrible!
For example, I have been watching Golden Goliath as the price crashed from 70 cents down to nearly 30 cents, over the last three months. I was getting very tempted to buy it back again, since the open market price was lower than a recently proposed PP price. Yet, on April 8th, before I acted, someone else did, or a few people did. 272,000 shares traded, perhaps a volume of only $85,000. And the price jumped up 27% on April 8th up to .48 Cdn/share! It jumped right on up to the price I recently sold it at, so my opportunity just vanished. This is my problem as a trader, and as a newsletter writer. How can I put $100,000 of my own money into an opportunity like that? I couldn’t, not even if I wanted to, and neither could the buyer or buyers who moved the price up!
This is also one reason why many stock trading and recommending systems are frauds. I cannot recommend to my list of 9000 readers to “buy stock X” and then claim that all my readers should have been able to “get in” at the price the stock was on the day I gave the recommendation. It does not work like that! Buyers drive up the price! All I can do is highlight opportunities–again, which is why I highlight both silver bullion and all of the silver stocks! It is up to you to decide to buy or not, based on the price you see on the day you are aware of the opportunity.
So, now, if I know that my readers can drive the volume up to $500,000 to $1,000,000 in one day, then I have to be aware of that, too, and it would have been unreasonable for me to try and say “Golden Goliath at 30 cents is my recommendation”, and then claim that all who read my report should have been able to make 27% in one day based on my recommendation. See?
Now, I could get around that problem by only discussing companies with a certain high daily volume, or a minimum market cap or larger, and recommend HL, CDE, PAAS, SSRI and SIL, the largest market cap silver companies on the list. However I cannot recommend a larger company if I think it is truly overvalued. Once again, the only real way around this problem is to list all the companies that I do.
Therefore, if I want to take a big position in the open market in a small silver stock myself, I have to spread my orders out, and place many smaller orders, and in different sizes, and not at regular intervals, perhaps over a week or two, so the traders don’t see how much I plan on buying. Furthermore, I also may not even tell my own broker how much I intend to fully buy. And I will never, never, never, of course, disclose who my broker is.
And if I buy a private placement, there’s no telling whether or not the liquidity will be there to be able to absorb shares I may want to sell.
Realizing this difficulty of buying an illiquid stock, some traders try an opposite tactic–one I have never done, as I see it as too risky in a bull market. Seeing as how large buy orders can move a price away from them… people may place large sell orders above the market price, to try and drive the market down. In this way, they may be able to buy more at a lower price. Manipulative? Perhaps. But perhaps not. Perhaps a person honestly wants to sell, but they feel the market will surely “come up” to their sell price? But the traders just get scared, and/or run ahead of them, too?
I trade large, and I typically hold for months, at the least. The least is about one month, and that would be rather rare. Other traders trade back and forth, many times in one day. These are the “market makers”. They create the bid and ask prices and they create the spread that you see a stock offered for. To me, it’s also like they are bluffing. After all, are their prices really the price? And if so, why can’t I get all I want at that price? See, those are not the real prices, those are only the prices for the small amounts on offer. If you want more, the price goes up, sometimes way up, as I have found out.
These are all lessons that translate directly to the silver bullion market. How much silver is really for sale at current prices? Probably very, very little. Current prices are, therefore, not the true price. The price will be driven way, way up when people realize their dollars are fraud, and when several trillion dollars tries to buy silver bullion. That is the real situation that will soon hit.
So, think about what goes on with futures contracts. Since so few of them are ever settled in physical delivery, perhaps only one percent. So, then, those contracts are like bluffing. I believe the short selling of futures contracts by the commercials are the bluff to deliver silver at low prices. Designed, perhaps, to drive the price down, for whatever reason. Perhaps to drive away investment demand? Perhaps to stave off their own silver bankruptcy? Perhaps so they can acquire more physical themselves at lower prices? The strongest reason is to keep the dollar strong. If they do it to keep the dollar strong, it’s like engaging in a tiny fraud in the silver market to keep the mammoth fraud of the dollar alive. It certainly makes sense from their perspective. But people can’t see it because they know so little about how markets work.
Once again, this proves why you need physical silver bullion above all else. It is the greatest trade in the world to get physical at these low prices. The rapidly rising price of physical bullion shows that the market price for bullion is not very deep. The little available keeps getting bought up, and the price has only one way to go, way up. The silver on offer at the “ask” price, is very limited, and very scarce.
Therefore, you can see also that producing this weekly report is extremely difficult for me. If I add a new stock to the list that I have not yet taken a position in that I want to, I have to be very careful that I have a full position, otherwise, it tends to take off on me, simply because I add it to this list! It’s horrible for me. Yet, I do get some benefits, of course, as producing this report has made me a central location to go to for information, and I have learned a tremendous amount.
Here are a few different investment strategies. I’m not recommending any of these, just throwing them out there as “creative” ideas you may not have thought of before.
1. Assume each company on this list of 100 is a good one run by good people, and put an equal number of dollars into each of the 100 silver stocks on this list, and hope for the best, and do nothing for a year. If you did that in Jan 2003, you would have made 314%… but, of course, back then, this list did not exist!
2. Do the same as number one, and put an equal dollar number into each silver stock on this list, and then re-distribute your gains to the laggards.. So, take profits when they go up, and spread out the profits among those that drop.
3. Do the same as number two, except narrow down the list a bit.
A. Narrow down the list by buying only the stocks I own–assuming I know what I’m doing.
B. Narrow down the list by buying only the stocks I don’t own–assuming I’ve pushed up the price by buying, and as others have bought.
C. Narrow down the list by using your good judgement–say, by buying the “cheap” stocks. For example, cut the top list in half, and only buy the bottom half, that all compare favorably on the valuation scale. And, for example, buy buying stocks on the second list if they have market caps under $30 million.
D. Or, use a combination of A and C, or B and C.
E. Buy only the 5 “cheapest” silver stocks on each list. Five that compare favorably, and five of those with the smallest market caps.
F. Buy the “look at my portfolio“, and buy all the stocks I own.
G. Buy the “look at my portfolio“, and only buy the stocks I own most of–assuming I know what I’m doing, and that I’ve made very wise choices about where to put my money.
H. Buy the “look at my portfolio“, and only buy the stocks I own little of–assuming that I know what I’m doing, and that the little stocks are “more speculative” and may have greater upside potential.
4. Find a silver stock with a wide spread, and consider becoming a market maker in that penny silver stock yourself by placing the bid and ask prices that are closer than another person’s, and let the market buy from you, and sell to you, when the market decides, and raise and lower your prices together, as your pool either fills with dollars or fills with stock… (and as you make money on the spread that you have created!)
5. Create your own strategy or combinations of strategies.
One last recommendation. Never put more than 10-25% of your net worth into any one single silver stock. You don’t need to take that risk. Diversify among the many available to choose from.
Here’s something I should boast about. My fantasy portfolio or fund at Marketocracy.com. I made it into the top 100 for the first quarter of 2004. My ranking is #33, out of about 50,000 to 60,000 investors who have signed up. You can see that if you go to marketocracy.com, then rankings, then top rankings, then last 3 months. Then click 21-40. Or click the link here: http://tinyurl.com/ysh7s
Here is my portfolio allocation as of April 8th. There are several things that pleased me from this experiment. First, that the two stocks I picked to put most of the money into, MGN and MMGG, were up by the greatest percentage for the quarter (each over 50%). Second, since my personal portfolio was not limited to the stocks that Marketocracy limits you to (no pinksheets and no Canadian), my personal portfolio outperformed the marketocracy one, again showing I know my stuff. Third, this portfolio was maintained rather easily. No “in out” jumping, no crazy movements. Just a steady long-term buy and hold strategy, with only a bit of re-diversification to maintain “portfolio compliance” as necessary as my top picks moved up beyond 25% of the portfolio, or as a few of the others moved above 5%. Regarding all of the stocks just under 5%: What I do there for “compliance” is I have to keep 50% of the portfolio in stocks under 5%. So, whenever a stock moves above 5%, I sell it to bring it back to 4.6%. Whenever another stock dips below 4.3%, I add to it to bring it back to 4.6%. Thus, even though I own $60,000 of GPXM, it shows a loss, because I have been adding to the position, to bring it up to $60g. And for PAAS, it shows a gain of 35%, but it remains at only about $65,000 because I have been selling from the position.
The return for this fantasy portfolio during the first quarter was 26.26% for the quarter. The return for this fantasy portfolio since I started, in mid December 2003, until April 8th, 2004, was 40% so far.
|DIVERSIFICATIONSymbolPriceSharesValueCurrent ReturnPortion of Fund MGN$8.5536,492$312,006.6050.01%22.21%Details First 50%MMGG$2.9086,044$249,527.6059.22%17.76%Details VGZ$5.4412,240$66,585.6015.07%4.74%Details CEF$6.2410,600$66,144.0015.59%4.71%Details PAAS$18.533,500$64,855.0035.02%4.62%Details Second 50%HL$8.237,800$64,194.008.67%4.57%Details WHT$3.2219,900$64,078.0017.54%4.56%Details MFN$10.006,400$64,000.0020.19%4.56%Details SSRI$16.453,800$62,510.0022.13%4.45%Details WTZ$8.367,460$62,365.6028.03%4.44%Details GSS$6.759,200$62,100.003.27%4.42%Details GPXM$0.34179,140$60,907.60-20.29%4.34%Details CDE$6.719,000$60,390.0028.45%4.30%Details SIL$21.082,800$59,024.0018.24%4.20%Details NJMC$0.7373,827$53,893.71-3.51%3.84%Details|
Many people from New Zealand or Australia write to me asking for a review of the Australian Silver Stocks. Usually, I send them on to some of Locantro’s work. See Locantro’s latest article that came out this week below:
AUSTRALIAN SPEC MARKET REVIEW
At the end of Locantro’s article, there is a link, Also by Tony Locantro
At that “Locantro Index”, there are plenty of articles on Australin Silver exploration stocks.
I’m not endorsing Locantro’s work. I’m just admitting that he’s the place to start, because he knows more than I do about the Aussie stocks, and he’s got a longer list of them than I do.
Now, regarding my “look at my portfolio” that I offer. I have tried my hardest to provide the price at a reasonable cost, “for the little guy”, by offering just a “one month” look. That way, more people can afford it than if I only had an annual option. I also provide this weekly report that you are reading now, for free.
If you are, at all, biting your fingernails about the price of the “look at my portfolio”, this is NOT for you. If it is troubling to pay the price, you probably do not have anywhere near enough money, or time, to be devoting to silver stocks at all, and should probably have all your money in silver bullion. I honestly wonder whether people who have less than $10,000 to invest (in addition to their $10,000 of silver bullion holdings), or perhaps significantly more, (and this includes home equity) would benefit by buying the look at my portfolio. I tend to think people should have more than that to invest before buying, but I just don’t know. It’s your decision, though, not mine.
Because I have a market reach, I also receive a lot of tips about silver stocks. And thus, I believe I may have invested in some of the best ones that came my way. If you believe I may have an edge based on my work and position… then the best way for me to share this with you is to is tell you where I put my money. It’s not investment advice. 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.
I just raised prices recently to the following:
Price: $39.95/monthly, or $49.95 for a single month, or $295.00/year
To order: The Silver Stock Report
If you have any questions about billing or order fulfillment, you need to contact my support staff at firstname.lastname@example.org and not me. I manage a large portfolio, and I don’t have time to process billing requests. I don’t bill any cards, my support staff handles all of that. We finally got a toll free telephone customer support line. 800-370-4154.
General Commentary on Silver (slightly modified from last week):
See my article: Biblical Guidelines for Managing your Money
As the New York Times, January 11, 1859, page 2 said—
“It is well known that the most colossal fortunes the world ever saw have been based on silver mines…”
–quote found by Charles Savoie
For news on the New Hampshire Sound Money Bill, that proposes to use U.S. Treasury minted Silver Eagles and Gold Eagles as money see:
Current status of the NH bill:
The bill will live until the November elections. It’ll have a different #,
but we now have 6 months or so to get EVERYONE we need on board.
Thanks to you for your efforts. Now, the fund raising part begins
so we can take it to the other states ! More on that later.
For now – V I C T O R Y is in sight !
WHERE and HOW to BUY SILVER BULLION
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 $422 million dollars worth of silver in the registered category available for delivery at the COMEX (52 mil oz. at $8.12). 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 http://news.goldseek.com/GoldIsMoney/1069879327.php
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 also Douglas Kanarowski’s article: What Impact Will Digital Photography Have on Silver?—————————-
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: http://tinyurl.com/vr7u
$20,200,000,000,000: U.S. bond market, yr end, ’02: http://tinyurl.com/vr7g
$11,700,000,000,000: U.S. stock market, yr end, ’02: http://tinyurl.com/vr7g
$11,038,000,000,000: U.S. annual GDP, 3rd q.’03 est. http://tinyurl.com/vr9y
$8,879,000,000,000: M3 (money in the banks) Nov. ’03 http://tinyurl.com/vra0
$7,001,312,247,818: US debt, 12-31-’03 http://tinyurl.com/bbp
$2,360,000,000,000: U.S. annual budget 2004
$1,860,000,000,000: World gold, 145,000 T @ $400/oz. http://tinyurl.com/vrcc
$554,995,097,146: U.S. budget deficit, ending fiscal year, 09/30/’03 http://tinyurl.com/bbp
$272,000,000,000: Market Cap of Microsoft (03-2004) http://tinyurl.com/vrcn
$180,000,000,000: debt of Ford Motor Co. (03-2004) http://tinyurl.com/vrd1
$104,400,000,000: US gold, 261 mil oz., @ $400/oz. http://tinyurl.com/vsr9
$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) (Perhaps $10 billion by April?)
$422,000,000: 52 mil oz. of registered COMEX silver @ $8.12 /oz. http://tinyurl.com/vrcw
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 are 258 times more overvalued than gold.
Gold is overvalued relative to silver, because at current prices, it takes 59 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 59 x 10, You will see that bonds and currency are overvalued relative to select silver stocks by a factor of 152,000 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 152,000 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 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: “59 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 59 times better. Currently, the ratio is 59 ounces of silver can buy one ounce of gold or 59:1.
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 60:1 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 60:1 to 40:1), then silver is moving up faster. So, keep an eye on the ratio.
For a list of bullion dealers:
For a list of Brokers that handle Canadian issues and/or pink sheets:
To track the 163 ticker symbols of the 100+ stocks on this list at yahoo: (Updated on April 2!!!)
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 (that Yahoo! finance does not have boards for) is stockhouse.com
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 yahoo.com 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)
The Market Cap is the usual tool to value a company. It is what the company “costs to buy” if you could buy the entire company, all the shares, at the latest share price. It is calculated by multiplying the share price, by the total number of shares that the company has issued. In reality, you could almost never buy an entire company at the price of the Market Cap, but only a small portion. Usually, even small buying pressure, such as trying to buy 1% of a company, can push up the price of a stock by up to 10-50% higher. In my reports, I list Market Cap in terms of millions of dollars as “$75 mil MC”.
To calculate the Market Cap, I try to get and use the number of “fully diluted shares”. A company creates shares when they sell them to investors in what are called “private placements”, or “initial public offerings” (IPO). A private placement is done usually before there is ever an IPO. These usually consist of shares and warrants, sold for cash that the company will need to grow and expand.
The “outstanding shares” is the number of shares that exist out there if you count them all, and it does not count the warrants, which are like options. The investor can “exercise the warrants” which is a right, but not an obligation, to buy more shares from the company at the set price of the warrant.
If the company does well, and the stock price moves up, all the warrants will be, or should be, exercised and converted into shares, especially if they become “in the money”, and the warrants are significantly cheaper than the stock price.
Now, “fully diluted shares” is the total number of shares, plus the warrants, counting warrants as if they were all exercised and became fully trading shares. I think “fully diluted shares” is a better number to use to calculate market cap than by using “outstanding shares” as most do.
Finally, I go beyond valuing a company based on Market Cap alone; instead, I value a company by dividing the Market Cap by the assets of the company, which are usually the silver reserves in the ground. Thus, I can get a sense of what you are getting for what you are paying. And then, I denominate the whole thing in terms of silver, and not dollars, to get a more constant measure.
(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 53 Billion market cap, so we can’t buy BHP for the silver exposure. IE, $53 Billion / oh, say, 1000 million?????= $53/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)
$2606 mil MC
“Grupo Mexico ranks as the world’s third largest copper producer (copper at $1.24), 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 for the silver alone.
$2085 mil MC / 280 = $7.45/oz. cost.
Compania de Minas Buenaventura SA (BVN)
– 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)
email@example.com (208) 769-4100
115 mil shares
$952 million Market Cap (MC)
near zero debt, cash: $123 mil (Feb., 2004)
(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.)
($123 million cash / $8.12/oz = 15 mil “silver equiv” oz.)
For a while, I was counting cash as bullion. However, since the bullion value of the cash has fallen by half since I started doing that, we can now easily conclude that doing so is like fraud. I can’t participate in fraud, so I can no longer count the cash as silver. Cash is trash. Cash value evaporates. Silver value appreciates. The two are not the same.
$952 mil MC / 36 mil “oz.” = $26.44/oz.
You get “approx” .31 ounces in the ground for 1 oz. silver’s worth of stock.
Additional comments: HL has more oz. than listed in the “proven & probable” category used in this calculation. 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 in terms of cost per oz. of silver in the ground. But if HL bought 18 mil oz. of physical silver, they might end the silver manipulation, and significantly boost their own profitability.
Earth to Hecla: Is silver useful as money, or not? It’s a simple question, and your actions speak volumes.
HL was downgraded Jan 6th by CIBC Wrld Mkts from Sector Perform to Sector Underperform http://biz.yahoo.com/c/20040106/d.html?hl
I have thought about moving HL to the “explorer” list, since the have so few reserves and resources. (Just to be fair.)
I believe silver bullion will continue to skyrocket, and I expect silver bullion to continue to outperform HL stock at these prices.
David Bond interviews Hecla Mining Company’s new CEO, April 4th!
David Bond’s interview is a MUST READ for all HL investors. It is eye-popingly stunning, and reveals exactly why HL made such horrifying blunders by sitting in CASH while the silver price rose from $5/oz. to $8/oz. Here is a few important excerpts:
The CEO asks, “Can you be prepared for $5 silver?”
Q. Where is the silver price going?
A. I don’t have the time to figure all that out. I can only focus on what I can really influence, which is our properties and our growth opportunities. While I look at the fundamentals and I see the deficit we’ve been running in silver between supply and demand, you see we are going to get to some point where there are no more above-ground stocks of silver to meet worldwide demand. The demand for silver is not abating. The industrial demands are greater now than they’ve ever been. If you look at the silver use in photography, and figure in the recycling from photo-processors, it amounts to only 2 percent of the actual demand. It is not quite a zero-sum game, but the conversion from silver-halide film to digital is a very small factor in the overall market.
Having said all that, I’m not going to predict what the price will be. We will not build a business plan around some assumption of what the price of silver will be. We will exploit our abilities. We will come in to some new property where somebody else broke their pick, and we will develop and mine it.I find such comments very contradictory. The CEO knows of the supply and demand deficit in silver, knows that above ground supplies of silver are headed towards zero, and yet, he says he will do nothing to take advantage of those clear facts! In fact, HL even sponsors the groups who publish that information!!! At least he acknowledges the situation! That’s a start! But his statements are far too similar to a moron who is standing on the train tracks and who says, “Yes, I see the train coming toward me at full speed, I hear the sirens blasting, but there’s no way I’ll try to predict whether or not it will hit me, and I’ll be damned before I make any moves based on what I know so far.” His statements are an absolute refusal to face the facts and use his brains! Clearly, there will be no attempt by management to use their huge cash hoard to buy silver bullion or buy plenty of cheap, prospective silver exploration properties. If they really think they need to be prepared for $5/oz. silver, then they will hold on to cash for dear life, because at that level, in fact, they have not been profitable. In fact, they were not profitable at $6/oz. silver.
Furthermore, I think the CEO is worthless when he says he cannot influence the price of silver. Utterly ridiculous. They have $125 million in cash! CASH! A few months ago, that much cash could have bought out nearly all of the COMEX registered silver supply, and forced a resolution to the short selling. That much cash, at $5/oz., could also have been used to buy over 2 years of HL silver production of 9 million oz. per year. Today, that much cash, of course, buys far less silver. I’m a little nobody compared to the CEO of the nearly $1 Billion in market cap Hecla mining, and I think I am influencing the silver market. The CEO is basically saying he refuses to use his brain, and that he believes he will be ineffective. I think people should believe him! I think the CEO should either lead, follow, or get out of the way. Right now, I see that he is refusing to take a leadership position, refusing to follow silver’s lead, and he is absolutely standing in the way of the interests of HL shareholders who expect a higher silver price.
So, what has HL done? They have over-diluted the stock by raising that much cash, and done nothing constructive with it. And in the meantime, the rise in the price of silver has caught them off guard, and the CEO says he does not even care what the price is, or will be. Outrageous! At least this interview explains such horrible management actions, and lackluster relative price movement for HL stock in all of 2003.
It is no wonder that silver investors have suffered if these are the kinds of people that silver investors are putting into places of leadership to represent their interests. Unbelievable. But instructive, nevertheless. Once again, this just goes to show why silver was so cheap for so many years.
535 million shares
$12,573 million Market Cap
5.5 million oz. / year gold production.
–production hedged out for 3 years, or about 18 million oz. (most notorious hedger of the industry, the “leader”)
–price of hedges locked in near the market lows, perhaps $340/oz. on average, nobody knows for sure, because Barrick will not say
–reportedly, Barrick is trying to “unhedge”.
–reportedly, they plan to deliver 1/3 of production to hedges, which means they will be hedge free in about 10 years.
–the size of the hedge, 18 mil oz. gold, at $400/oz., would be valued at $7.2 billion dollars. At $500/oz, it’s $9 billion.
–but they claim to be “debt free”, if you ignore the gold they owe for delivery, at locked in, low prices. (only true if gold is not money)
–cash “rich” of about $1 billion dollars.
Silver Reserves reported to be 850 million ounces!
Gold Reserves reported to be 86 million oz. (x 10 = 860 mil oz. + 850 silver = 1710 mil oz. “silver equiv.”
$12,573 million Market Cap / 1710 mil oz. = $7.35/oz. silver
You get “approx” 1.11 ounces in the ground for 1 oz. silver’s worth of stock.
Additional comments: Over the years, Barrick has hedged their production, which many claim has helped to depress the price of gold and silver, by artificially adding to supply. (Barrick’s promises becoming the extra supply.) The declining price of the precious metals has put other miners out of business, which Barrick has acquired at low prices. If Barrick goes bankrupt due to their hedges, and rising gold and silver prices, then perhaps Barrick’s many properties will, once again, be sold at distressed prices.
Barrick boasts a “cash cost” of $189/oz., for gold for 2003, yet their cash has dropped from $2 billion down to $1 billion. It could be due to the hedging, locking in precious metals prices at low prices, and/or hedge covering that explains the monetary loss in the light of their low cash costs.
About a year ago, perhaps spring 2003, ABX made an announcement about covering 30 million ounces of silver they sold short. Then, a large buyer showed up in the futures contracts for about that amount. I do not know whether, or how, that has yet been resolved.
I believe silver bullion will continue to skyrocket, and I expect silver bullion to continue to outperform ABX stock at these prices.
IPOAF.PK (INDUSTL PENOLES)
397.5 mil shares outstanding (2002 annual, unchanged since 2001)
$2385 mil MC
419 proven and probable reserves of silver (from 2002 annual report on website)
$2385 mil MC / 419 oz. silver = $5.69/oz.
You get “approx” 1.43 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.
The word late Feb. is that Penoles has hedged several year’s worth of silver, that is, they have locked in contracts at set prices. Set when prices were lower. How much lower, and at what price, is anyone’s guess. As reported at lemetropolecafe.com, “We know the market is so tight even the world’s largest silver producer, Mexico’s Penolas, wasn’t thrilled about supplying 1 million ounces for a special project with ECU Silver, led by their extremely able CEO Michel Roy.”
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’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.
Given the report that Penoles has hedged silver for two years, I believe silver bullion will continue to skyrocket, and I expect silver bullion to continue to outperform IPOAF.PK stock at these prices.
CDE (COEUR D’ALENE)
firstname.lastname@example.org (208) 769-8155 or (800) 624-2824
213 mil shares (Issued 32 mil new shares late Oct. 2003)
$1431 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)
$1431 mil MC / 225 mil oz = $5.61/oz.
You get “approx” 1.45 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. http://biz.yahoo.com/prnews/031211/sfth014_1.html
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.
CDE looks like they owe both gold and dollars. A double debt warning for CDE investors!
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.
I believe silver bullion will continue to skyrocket, and I expect silver bullion to continue to outperform CDE stock at these prices.
SIL (APEX SILVER)
email@example.com (303) 839-5060
45,023,760 ordinary shares outstanding. (Jan 30th press release)
$998 mil MC
cash on hand: $350 million after Jan 30th share offering, and March 16th convertable debenture.
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
$998 mil MC / 454 mil oz = $2.20/oz.
You get “approx” 3.70 ounces in the ground for 1 oz. silver’s worth of stock.
Additional comments: A reader emailed me saying that Apex has 35 exploration properties. I have not yet confirmed this report.
March 16th, Apex raises $144 million in a convertable debenture deal to help finance the development of San Cristobal. They now have 350/435, or 80.4% of the capital costs needed for construction. Raising the last bit should now be very easy to do. If, while raising money, they held their cash in the form of silver bullion, they would probably not need to raise any more cash at this point, since silver has moved up over 50%.
Apex is now the most cash rich silver stock on the list. About $350 million! Amazing. Their plan, as they have stated all along, is to wait until higher silver and zinc prices to develop their deposit. I wonder if they will be smart, and hold their “cash” in the form of silver bullion while they wait for silver bullion to go up in price? Seems so basic even a child could understand it. One key problem standing in the way is that there are position limits on paper longs, and thus, APEX could not probably not buy that much silver bullion even if they wanted to. Ironic, isn’t it? It is the most natural and sensical thing for Apex to buy silver while they wait for higher silver prices, and doing so would push up the price, but they likely will not act, and almost cannot act due to the problem of scales of size. This, to me, is so bizzare, I cannnot fathom it. I think I understand a lot, but this…. it is simply mind boggling. It’s the result of a system so out of balance, it’s insane, and the rational mind has no answer for the bizzare things we see today.
Look, COMEX is the last place on earth to buy silver now, in any really big size. Reports are coming in from all over that there is no bullion in significant size for sale available anywhere.
My advice to Apex would be to buy every bit of silver they can get. Even hold out a sign, put up a website, hire people to take the orders, and start buying silver, in all forms, at 10% and even 15% above the spot price. Just make yourself become the “market maker” and start buying silver from all over like a sponge soaking up water. Let the silver find you! In the long run, a 10-15% commission is nothing when the trade is this good. There may be position limits at the COMEX, but it’s not illegal to offer to pay what you are willing to pay to the free market. Forget the COMEX, and make your own market!
Apex silver primarily has institutional investors.
Apex has a lot of zinc. That’s an added bonus that is not factored in to my method of valuation. Zinc prices have been heading up soon, so that’s another bonus. Plenty of zinc is especially good if zinc is moving up in price. Zinc is now up to $.51/lb., from a low of about $.35/lb. For zinc prices, see http://www.metalprices.com
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 another 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: Canadian Zinc, Expatriate, or Metalline (I own Metalline, but not SIL.)
I do not have an idea on whether or not SIL will out perform silver bullion or not. It’s hard to say, because of that huge zinc bonus. I expect most of the other stocks on this list to outperform or significantly outperform silver bullion in the long run from today’s prices.
CFTN.PK (CLIFTON MINING)
firstname.lastname@example.org 801-756-1414 (303) 642-0659 Ken Friedman
45 mil shares fully diluted (Oct. 2003)
@ $2.00/share US
$90 mil MC
http://www.cliftonmining.com/wsreview.htm –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 has a complex JV agreement with Dumont Nickel. In sum, here is what Keith Moeller VP, Clifton Mining Company wrote to me: “If Dumont produces a positive feasibility study on an individual property piece, then they gain a 50% interest in that piece alone, not in the rest of the property. If they spend more than 5 million dollars (US) on any one piece and they produce a positive feasibility study on that piece, then they will gain a 60% interest in that one piece of property, not in the rest. If they stop at any time or fail to produce a positive feasibility, then they will gain no interest in any of our property. Right now we have around 7 different pieces of the property that have “Stand Alone” mine potential. If Dumont stakes or purchases any property within five miles of the joint venture property, then we automatically receive a 50% interest in that property.”
My problem is how to quantify that. First, there is the range of potential silver resources. Second, there is the range of potential ownership, which is highly variable, and not subject to the entire property, nor necessarily subject to spending by Dumont, but subject mostly to Dumont doing a positive feasibility study on each of many properties . At the extreme ranges, the values are:
40% to 100% of 105 = 42 – 105 million oz.
40% to 100% of 1000 = 400 – 1000 mil oz. “exploration potential”
$90 mil MC / 42 mil oz. = $2.14/oz.
$90 mil MC / 1000 mil oz. = $.09/oz.
You get “approx” 3.80 ounces in the ground for 1 oz. silver.
Exploration Potential: 90
Additional comments: Note the “exploration potential” is very large.
For more info on what’s going on with Clifton, see http://www.dumontnickel.com , 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.
See the human study data released on their colloidal silver product:
Clifton Mining Company – New Human Study Data Released
ABL signs a contract with GNC. Clifton’s biofirm’s colloidal silver product will be on the shelves of this mass market health food and fitness stores, GNC. Congradulations to Clifton!
GRS GAM.TO (GAMMON LAKE)
email@example.com (902) 468-0614
Fully Diluted 58.7 mil shares (Nov 30, 2003)
+3.33 mil special warrant financing (Feb 27th, 2004)
Fully Diluted: 62 mil shares (Feb 27th, 2004)
$466 mil MC
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 26.3% of Mexgold, MGR
Since Mexgold owns 185 mil oz. of “target exploration potential”, 26.3% of that is 48.6 mil oz.
182 + 49 = 231 mil oz.
$466 mil MC / 231 mil oz.= $2.02/oz.
You get “approx” 4.04 ounces in the ground for 1 oz. silver’s worth of stock.
**Note** most of Mexgold’s oz. that are added in are an “exploration target” not yet “inferred resources”.
Additional comments: Drill results released Jan 7th: http://biz.yahoo.com/cnw/040107/gammon_lk_drill_rslts_1.html
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.
FSR.TO FSLVF.PK (FIRST SILVER)
firstname.lastname@example.org (604) 602-9973 or (888) 377-6676
38.6 mil shares fully diluted (Jan 2004)
@ $2.70/share Cdn x .75 US/Cdn = $2.02 US
$78 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.
$78 mil MC / 42 mil oz. = $1.86/oz.
You get “approx” 4.37 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.
MFN MFL.TO (MINEFINDERS)
Shares Fully Diluted 34.1 mil (Late 2003?)
$341 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.”
$341 mil MC / 195 mil oz. = $1.75/oz.
You get “approx” 4.65 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.
KBR.V KBRRF.PK (KIMBER RSCS)
email@example.com (604) 669-2251
31.2 mil shares fully diluted (Jan 20, 2004)
@ $2.35/share x .75 US/Cdn = US $1.76
$55 mil MC
30 mil oz. silver resources Measured & indicated, plus inferred
540,000 oz. gold x 10 = 5.4 mil “silver equiv.”
$55 mil MC / 35.4 mil oz. = $1.55/oz.
You get “approx” 5.24 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. Significant exploration potential.
It was reported by a press release that 16%-17% of KBR.V is owned by silver bull Jim Puplava of http://www.financialsense.com, which I think is a rather solid endorsement of the company.
PAAS (PAN AMERICAN SILVER)
firstname.lastname@example.org (604) 684 -1175
58.2 mil shares fully diluted. (Sept. 2003)
+ 3.33 mil share financing (Feb 27)
61.5 mil shares fully diluted (Feb 27, 2004)
$1139 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
$1139 mil MC / 743 mil oz. = $1.53/oz.
You get “approx” 5.31 ounces in the ground for 1 oz. silver’s worth of stock.
Additional Comments: Pan American Silver Announces US$55 Million Common Share Financing
Pan American of Canada buys Morococha silver mine in Peru for US$35 million
This $35 million acquisition is a great deal for PAAS, and a minor help for PAAS shareholders. According to the press release above, the silver mine produced 3.5 million ounces of silver a year, at a cash cost of $3/oz., which is great! At $6.50/oz, that’s $3.5 x 3.5 mil oz. = $12.25 million per year profit after cash costs! That gives the acquisition a P/E ratio for the mine’s acquisiton cost of under 3! What a deal!
Unfortunately, PAAS shareholders are paying way above that when they buy the stock today. After this acquisition, PAAS should have a “2004 silver production forecast to 13 million ounces from 10.1 million ounces and will reduce forecast cash costs to below $ 3.50/oz, bringing anticipated total costs to less than $4/oz for the year.” Now, at $6.50/oz, that’s $2.5 x 13 mil oz. = $32.5 million per year profit, after cash costs. That gives a P/E ratio for PAAS of about $1000 / $32 = 31. Therefore, considering the two P/E ratios, 31 compared to under 3, PAAS stock is over ten times overvalued compared to other silver mining opportunities that exist in the market, such as the property they just purchased.
I believe PAAS is one of two silver companies on the list today that is significantly in debt (the other is now CDE).
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.
HGM.V HOGOF.PK (HOLMER GOLD)
1-877-859-5200 ask for John Robinson, or George White
48 mil shares fully diluted (March 2004)
@ $.37/share Cdn x .75 US/Cdn = $ .28 US
8.9 mil oz. silver resources in cuba, according to final feasibility study. Short mine life.
$13 / 8.9 mil oz. = $1.50/oz.
You get “approx” 5.44 ounces in the ground for 1 oz. silver’s worth of stock.
Additional comments: silver in cuba. (final feasibility study completed by Rescan-Hatch) gold in Timmins, Ontario.
Most of the value of Holmer is in the gold property in Timmins, not the silver property in Cuba.
–final approval by the Cuban Govt. is expected within few weeks.
–Capital needed for the silver project, approx. $6 million.
WTZ WTC.TO (WESTERN SILVER)
(formerly western copper) –And copper prices are headed up, too, (copper at $1.30) now.
email@example.com Jay Oness Toll Free: 1-888-456-1112
40.1 mil fully diluted (After Dec. 16th 2003 financing)
$335 mil MC
(not actively mining)
$14 million Cdn in cash in the till (2 mil + 12 mil financing) no debt
From the “SNC Lavalin Resource Calculation” March, 2003.
Indicated 158.8 mil oz. silver
Inferred 54.6 mil oz. silver
Total 213.4 oz. silver.
Total 1.94 oz. gold x 10 (at 10:1) = 19.4 silver equiv.
The capital cost 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.
$335 mil MC / 233 oz. = $1.44/oz.
$335 mil MC / 1000 oz. = $.335/oz. –exploration potential
You get “approx” 5.65 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration Potential = 24
Additional comments: Western Silver was formerly Western Copper… Copper now at $1.35/lb!
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 x .50/lb = $1865 million
673 million pounds of copper x $1.30/lb = $874 million
1.3 billion pounds of lead x .40/lb = $520 million
* TM.V TUMIF.OB (TUMI RSCS) (TUY Frankfurt Exchange) (I own shares)
firstname.lastname@example.org Nick Nicolaas IR (604) 657 4058
23.7 fully diluted shares (Dec. 2003)
@ $1.98/share Cdn x .75 US/Cdn = $1.49 US
$35 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
$35 mil MC / 25 mil oz. = $1.41/oz. ***I’m using this number***
$35 mil MC / 50 mil oz. = $.70/oz. (exploration potential)
You get “approx” 5.77 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration Potential: 11 (likely plus more after bonanza silver discovery late November, 2003.)
Additional comments: Tumi soared in late November, 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.
MGR.V MGRSF.PK (MEXGOLD RSCS)
18.7 mil shares outstanding
+ 22.5 mil unit financing (x 1.5) (1 unit = 1 share and 1/2 warrant at $2.50 Cdn)
52.5 mil fully diluted
@ $5.15/share Cdn x .75 US/Cdn = $3.86 US
$203 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.”
February Financing was for the El Cubo Gold-Silver Mine is located in the Guanajuato gold-silver district in the Republic of Mexico. Historical reports cite district production at 1.2 billion ounces of silver and over 4 million ounces of gold. With capital spending and upgrades, and expect to produce up to 100,000 oz. gold equiv/year at $190/oz. At $400/oz, that may mean $210/oz. net profit, or $21 million positive cash flow/year, and yet, the purchase price was $21.5 million. Seems like they bought a mine, at a price, with a profit potential, of a P/E ratio of 1.
Target to expand the El Cubo project resource to over 2 million ounces of gold equivalent. Given that historic production was 300 oz. of silver for each 1 oz. of gold, I think it’s odd that they speak in terms of “gold equivalent”. Why not emphasize the silver??? Converting their target of gold back to silver, at their ratio of 65:1, gives 130 mil oz. “silver equivalent”.
55 + 130 = 185 “exploration potential”
$203 mil MC / 185 mil oz. = $1.10/oz.
You have an “exploration potential target” of 7.43 ounces in the ground for 1 oz. silver’s worth of stock.
Additional comments: In spite of the recent very large financing, which nearly trippled the market cap of the company with a very large acquisition, the stock price barly moved.
Gammon Lake is a large shareholder, 26.3%.
Mexgold announced bonanza grade discovery on Jan 13th, 11 kilos per ton silver, over 2 meters.
Part of a section of “25.5-metres grading 1.16 grams per tonne gold and 961 grams per tonne silver.”
The stock moved up strongly mid week, most likely in response to the news.
SSRI SSO.V (SILVER STD RSC)
email@example.com (604) 689-3856 or (888) 338-0046
45.4 mil shares (or more), Jan 19th, 2004 (after recent PP)
$747 mil MC
debt free, cash: $Cdn 60 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.
Silver Standard Options In-Ground Silver Resources in Peru — March 31, options 56.3 million oz. silver.
2.2 mil oz. gold. Silver equiv = 22 mil oz. silver. (22 + 666 + 56 = 744 mil oz.)
$747 mil MC / 744 mil oz. = $1.00/oz.
You get “approx” 8.10 ounces in the ground for 1 oz. silver’s worth of stock.
Additional comments: Silver Standard Defines Second Silver Zone at La Pitarrilla-Significant Silver Grades up to 46 Oz./Ton Over 123 Feet
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.
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.
ORM.V OREXF.PK (OREMEX RES)
Fully Diluted: 24,012,928
@ $1.35/share x .75 US/Cdn = $1.01 US
$24 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)
$24 mil MC / 24 mil oz. = $1.01/oz.
$24 mil MC / 100 mil oz. = $.24/oz. –exploration potential
You get “approx” 8.06 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration Potential: 34
CZN.TO CZICF.PK (CDN ZINC)
67.3 mil shares fully diluted as of Dec., 2003 (as stated in the proxy, p.8)
80.2 fully diluted shares as of Feb 2, 2003
@ $.96/share Cdn x .75 US/Cdn = $.72 US
$58 mil MC
$13.5 million cash, Cdn, 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.
$58 mil MC / 70 mil oz. = $.82/oz.
You get “approx” 9.87 ounces in the ground for 1 oz. silver’s worth of stock.
Additional comments: Canadian Zinc Corporation: Summer 2004 Exploration Program Approved Wed, Mar 24
CZN is a junior explorer with relatively high trading volume recently, which is unusual for a stock with such a small market cap.
The additional cash from the recent private placements means that CZN will now be able to drill and explore more of their property. CZN likely has much more silver in the ground, and has good profit potential.
I would like the company to provide 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 in additional financings.
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 build the mine. 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 50 cents/lb. = $120/ton for the zinc.
10.1% lead/ton = 202 lbs. lead/ton x 40 cents/lb. = $80/ton for the lead.
6 oz. silver/ton x $6.95/oz. = $42/ton for the silver.
0.4% copper/ton = 8 lbs. copper/ton x 1.30 cents/lb. = $10/ton for the copper.
Total: $249/ton! (Prices have been moving up!) Prices accurate as of Mid Feb., 2004
4. My method of valuation: I’m really counting only the silver, not the base metals in my “oz in the ground” valuation. So consider a significant “zinc bonus”, and “lead bonus”.
5. Zinc and base metals prices are moving up, up to. 50 cents/lb. for zinc! Check http://www.metalprices.com/ for updates.
Zinc prices are off, down to .465/lb. May partly explain the dip in price. (Also, the $7 million financing at 50 cents coming due after 4 months ago, in November, 2003) Could also partly be that I sold my shares, removed the “star”, and others followed me out. I do not issue buy, or sell, recommendations.
One person suggested that I keep a few shares, just to keep a “star” listed by a company, to “help it out”. Well, that seems to me to be somewhat manipulative. There are several companies I own that are less than 1% of my portfolio, but my 1% is still a very substantial position in the marketplace.
(I think held my shares of CZN for about 9 months. In contrast to that, I have held shares of Avino, on two occasions now, each rather short term, while I don’t have any Avino now.)
SRLM.PK ( STERLING MINING)
RDemotte@aol.com Ray DeMotte 208/676-0599
just under 10 mil shares fully diluted (early Jan. 2004)
$90 mil MC
~185 mil oz. reserves + resource, Sunshine alone
Quote from: http://www.sterlingmining.com/jun112003.html
“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
$90 mil MC / 185 mil oz. = $.49/oz.
$90 mil MC / 500 mil oz. = $.18/oz. (exploration potential)
You get “approx” 16.73 ounces in the ground for 1 oz. silver’s worth of stock.
(Exploration potential is 45. )
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.”
RDV.TO RDFVF.PK (REDCORP VENTURE)
42.7 mil shares fully diluted (Sept 2003)
+ 10 mil shares March PP (March 2004)
52.7 mil shares fully diluted
@ $.47/share Cdn x .75 US/Cdn = $.35
$19 mil MC
9 mil tonnes indicated and inferred at 107.5 g/t x .03215
= 31 mil ounces silver (3.4 oz/ton low grade silver, with other minerals)
(also have significant gold ($30/ton at $400/oz.) and zinc $60/ton at $.46/lb.)
728,000 oz of Gold x 10 = 7.3 mil “silver equiv”
= 38.3 mil oz. silver equiv.
$19 mil MC / 38.3 mil oz = .48/oz.
You get “approx” 16.8 ounces in the ground for 1 oz. silver’s worth of stock.
Additional comments: RDV has a “gold bonus”. At $409/ gold, and $6.50/oz. silver, it’s about $300 million worth of gold, and $200 million worth of silver, or about 60% of the value is in the gold. Since my method really undercounts the gold, this means there is a significant “gold bonus” here.
Redcorp Ventures Ltd.: Brokered Private Placement Financing Closed ($3 million)
FAN.TO FRLLF.PK ( FARALLON RSCS)
(604) 684-6365 Erick Bertsch
73.8 mil shares fully diluted as of Oct 31, 2003
@ $.83/share Cdn x .75 US/Cdn = $.62 US
$46 mil MC
Exploration and development in Mexico.
Run by hdgold.com (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)
$46 mil MC / 107 mil oz. silver equiv. = $.43/oz.
$46 mil MC / 181 mil oz. silver equiv. = $.25/oz. –exploration potential
You get “approx” 18.9 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration potential = 33
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… 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.
HDA.V (HUSIF pink sheets symbol?) (HULDRA SILVER)
Phone: Magnus 1 (604) 261-6040
6.924 million shares out (fully diluted) (Nov or Dec ’03?)
@ $.61/share x .75 US/Cdn = US $.46
$3.2 mil MC
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 = $.40/oz.
You get “approx” 20.3 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 Cdn $3.5 million — with payback of capital (when equity financed) within two years.”
EXR.V EXPTF.PK ( EXPATRIATE RECS)
firstname.lastname@example.org 1-877-682-5474 Dr. Harlan D. Meade, President and CEO
85 mil shares fully dulted. (Feb, 2004)
(+ 1.95 mil units (1.5 shares/unit) on March, 2004)
88 mil shares fully dulted March, 2004
@ $.415/share Cdn x .75 US/Cdn = $.31
$27 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”.
$27 mil MC / 67.4 oz. silver = $.41
You get “approx” 20 ounces in the ground for 1 oz. silver’s worth of stock.
Additional comments: Atna to Participate in 2004 Wolverine Exploration Program – PrimeZone Media Network
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.
Call Dr. Harlan D. Meade, President and CEO 1-877-682-5474, and ask him to send you an information packet on EXR.V. It contains a good report on why he is bullish on zinc.
PLE.V (PLEXMAR RES INC)
36 mil shares fully diluted (Nov. 2003)
+ 24 mil shares and warrants with Feb 2004 PP
60 mil fully diluted (March 2004)
+ 1.75 mil options for directors (March 30th)
62 mil fully diluted
@ $.325/share Cdn x .75 US/Cdn = $.24 US
$15 mil MC
–just acquired 2 silver mines in Peru
Total: 1.09 mil gold oz., 28.4 mil oz. silver
Total silver equiv: 38.4 mil oz.
$15 mil MC / 38.4 mil oz. = .39/oz.
You get “approx” 20.7 ounces in the ground for 1 oz. silver’s worth of stock.
* MGN (MINES MGMT) (I own shares)
email@example.com (509) 838 6050 Doug Dobbs
11.7 mil shares fully diluted as of the March 4th 1.4 mil financing.
$100 mil MC
261 mil oz. silver resources. Previous drilling spent over $100 million drilling the property.
$100 mil MC / 261 mil = $.38/oz.
You get “approx” 21 ounces in the ground for 1 oz. silver’s worth of stock.
Additional comments: As copper moves up 5 cents/lb., it adds $100 million to the value of the deposit.
As silver moves up $.50/oz., it adds $130 million to the value of the deposit.
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 (copper at $1.35/lb.), 2 Billion pounds of copper, and 261 mil oz. of silver. Doing the math:
261 mil oz. silver x $8.12/oz. = $2.1 Billion.
2 Billion lbs copper x $1.35/lb.. = $2.7 Billion.
Total value of mineralization before costs to extract: $4.8 Billion. This number increased by $200 million since last week! And it increased from around $3 Billion just a few months ago!
Doug Casey wrote a bullish article on copper, “The Coming Copper Crunch” for the dailyreckoning.com last week.
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 Noranda’s departure of the project in 2002.
For more on MGN (formerly MNMM) see
I own shares of MGN.
ADB.V ADBRF.PK (ADMIRAL BAY RSCS)
firstname.lastname@example.org 604 628 5642 — Curt Huber– Business Development
33.3 mil shares fully dilluted. (March, 2004)
@ $1.35/share Cdn x .75 US/Cdn = $1.01 US
$33.7 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.
$34 mil MC / 89.3 mil oz. = $.38/oz.
You get “approx” 21.6 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 projects, which therefore needs to be factored in as a significant “bonus”. Company goals for gas production are 2.5 million cubic feet/day by mid 2004, which at $5 would be $12,500/day gross, and target is 7.5 million cubic feet/day by the end of the year, again, at $5 would be $35,000/day gross, or $12.8 mil/year gross.
They are actively digging, drilling, and releasing results in press releases.
* SVL.V STVZF.PK (SILVRCRST MINES) (I own shares)
email@example.com (604) 691-1730
25.1 million fully diluted Dec 31, 2003
+ 750k options for directors (March 24th)
25.9 million fully diluted March, 2004
@ $1.67/share Cdn x .75 US/Cdn = $1.25 US
$32 mil MC
$3 mil cash in the til.
Now the Honduras and El Salvador “Resource” totals 43 million
plus the exploration potential of 40 – 100 million in Honduras
plus Mexico, –see news release from last month,
plus drill programs to start in Mexico and El Salvador
plus Guatemala another unknown but geologically similar to main property in Honduras and El Salvadore all three are within 25 miles from each other.
Silvercrest added 14.3 million oz. of resources at El Zapote, 4-6-04
The range of exploration potential is between 89 – 149 million oz.
$32 mil MC / 89 = $.36/oz.
$32 mil MC / 149 = $.21/oz.
You get “approx” 22 ounces in the ground for 1 oz. silver’s worth of stock.
(Exploration potential = 38++ oz.)
Additional comments: April 6th: SilverCrest Reports El Zapote Resource Estimates
–Silvercrest added about 14 million oz. of silver resources in this April 6th press release. Good job Silvercrest!
March 17th: Silvercrest closes El Salvadoran (El Zapote) Acquisition
The project in El Salvador is only 20 km from the property in Honduras, and the property in Guatemala is 15km away, so only one mill will be needed for the three when a production decision is made.
Silvercrest has 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
CHD.V CHDSF.PK (CHARIOT RSCS)
45 mil shares fully diluted October 2003
@ $.32/share Cdn x .75 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” 24.6 ounces in the ground for 1 oz. silver’s worth of stock.
ASM.V ASGMF.PK (AVINO SILV GOLD)
firstname.lastname@example.org 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)
@ $1.96/share Cdn x .75 US/Cdn = $1.47 US
$16 mil MC
from: http://www.avino.com/other/goldstock100197.html –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”
$16 mil MC / 51.5 mil oz. = $.31/oz.
You get “approx” 26.1 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.
GGC.V GGCRF.PK (GENCO RESOURCES)
IR: Rob Blankstein: 604-682-2205, or email@example.com
11.9 mil shares (Dec. 2003)
@ $1.39/share x .75 US/Cdn = $1.04
$12 mil MC
484 x .03215 = (15.5 oz) x 2.3 mil t = 35.8 mil oz. silver
2.00 x .03215 = 148,000 oz. gold x 10 = 1.5 mil oz. silver
385 x .03215 = … x 95k = 1.2 mil oz silver
40+ mil oz. silver equiv. resources
2002 production, 500,000 oz. silver, 9000 oz. gold
$12 mil MC / 40 mil oz. silver = $.31/oz.
You get “approx” 26.2 ounces in the ground for 1 oz. silver’s worth of stock.
UNCN.OB ( UNICO INC)
Ray Brown, 530-873-4394
70 mil shares
$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 in about 3 months.
49 mil oz. total.
$7 mil MC / 49 mil oz. = $.14/oz.
You have an expiring lease on “approx” 58 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”.)
I removed Imperial Metals because I could NOT see that they were a significant silver miner with significant silver resources.
*IMR.V IMXPF.OB (IMA EXPL) (I own shares)
43.4 mil Fully Diluted shares (May 1, 2003)
@ $3.30/share Cdn x .75 US/Cdn = $2.47 U.S
$107 mil MC
Exploring in Argentina.
$4.5 million cash
Additional comments: Positive drilling results are coming in.
IMA’s Drilling at Navidad Intersects 115 Meters Grading 454 g/t ’13 oz/t’ Silver at Galena Hill
IMA Exploration Inc.: Drilling at Navidad Hits 20 Metres Grading 703 g/t – 20.5 oz/t – Silver
I don’t think I have seen such high grade drilling results over such a long distance from any other company, in any other report.
I don’t think the lawsuit challenging IMR’s claims has any merit.
IMA Exploration Inc.: Statement of Defence Filed Wed, Apr 7
I own shares of IMR.V
EZM.V EZMCF.PK (EUROZINC MINING)
Fully Diluted: 224 million
@ $.65/share Cdn x .75 US/Cdn = $.49
$109 mil MC
Additional comments: Eurozinc really moved up in price after they announced a bid for the Neves Corvo mine in Portugal for 128 million Euros.
Eurozinc has significant silver.
CDU.V CUEAF.PK (CARDERO RSCS)
Henk Van Alphen — President (604) 408-7488
32 million shares fully diluted Dec. 11th , 2003
@ $3.93/share Cdn x .75 US/Cdn = $2.95 US
$94 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:
$94 mil MC / 500 mil oz exploration potential = $.19/oz.
$94 mil MC / 850 mil oz exploration potential = $.11/oz.
Exploration potential: you might get about 43 – 74 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.
AOT.V ASOLF.PK (ASCOT RSCS)
1 604 684 8950
39.7 fully diluted. (Nov 2003)
@ $.475/share Cdn x .75 US/Cdn = .36
$14 mil MC (US)
Additional comments: They own 5.82 million shares and 388,000 warrants of Cardero at $.35, which usually a greater asset value than their market cap. Ascot’s share price is typically around 80% of the value of their Cardero Stock.)
(I’m listing this one out of order, not by market cap, and next to Cardero, because of their position in Cardero.)
MCAJF.PK (MACMIN LTD)
450 mil shares and options (Feb., 04)
$64 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. (They own some Malichite, MAR.AX) Also, significant gold projects, perhaps several multi-million oz. potential projects.
Price moved up significantly this week. Perhaps this news article had something to do with that:
News article in Australia on MCJAF
* FCO.TO FCACF.PK (FORMATION CAPTL) (I own shares)
165 mil fully diluted, March 2004
@ $.60/share x .75 US/Cdn = $.45
$74 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 $25- $33/lb. see http://www.wmc-cobalt.com/prices.asp
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–expected in early June.
I own shares of FCO.TO
TVI.TO TVIPF.PK (TVI PACIFIC)
Dianne (IR) Phone: (403) 265-4356
= 344 mil fully diluted Oct. 7th, 2003
@ $.245/share Cdn x .75 US/Cdn = $.18 US
$63 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.
Additional comments: This company exploded in price 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 http://tinyurl.com/vwbw
They are primarily a silver explorer. The bonus is they are !a producer, and are cash flow positive, which are both extremely rare for an explorer. In fact, the other producers mostly all lose money!
* FR.V FMJRF.PK (FIRST MAJESTIC) (I own shares)
15.8 mil shares fully diluted (Jan 30th, 2004)
(+ 8 mil unit PP on March 15th) + 12 mil fully diluted shares
27.8 mil shares fully diluted March, 2004
@ $2.25/share Cdn x .75 US/Cdn = $1.69
$47 mil MC
Up to 80% ownership of the Niko project which is similar to the Naica Mine:
The Naica Mine: 4.3%Zn, 5.5%Pb, 6ozAg, 0.01ozAu, 0.34%Cu (5 million tonnes reserves_
= 6 x 5 = 30 mil oz. silver x .8 = 24 mil oz.
The Niko project does not have reserves, it is similar to the Nacia, which has reserves.
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%. Cash costs are expected to be $3/oz. So, if silver holds at $6.95, then $4/oz. is profit, x 1.8 mil oz silver/year = $7.2 million dollars/year after cash costs!
Do they understand the silver market? I think so! They linked an excerpt from my free e-book from silverstockreport.com ” 8 Reasons why silver is a better investment than gold! ” see url here: http://tinyurl.com/xyyb
$47 mil MC
Additional comments: The other benefit of FR.V is that the company is keen on acquiring new properties. This is where the best money is made for a company in today’s bull market in silver, in my opinion. From the home page of the website:
“First Majestic recently announced the acquisition of Le Parrilla Silver Mine, Mexico, which is anticipated to be the first of several acquisitions over the coming months.”
I own shares of FR.V
* NPG.V NVPGF.PK (NEVADA PAC GOLD) (I own shares)
firstname.lastname@example.org (604) 646-0188 David Hottman
= 43 mil shares fully diluted (Nov 26th, 2003 including recent PP)
@ $1.46/share Cdn x .75 US/Cdn = $1.09 US
$47 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.
$47 mil MC / 200 mil oz. = $.23/oz.
$47 mil MC / 1000 mil oz. = $.047/oz.
The inverse: you “might” get 35 – 173 ounces in the ground for 1 oz. silver.
Additional comments April 2: Nevada Pacific Gold to Initiate 25,000 Feet of Drilling on Keystone, Amador Canyon and Limousine Butte
The 200 to 1000 mil oz. of silver exploration potential estimate for the Amador Canyon project is based on the size of the area, which may provide between 50 and 250 million tonnes of ore, times a low grade of 4-6 ounce per ton. 50 mil tonnes x 4 oz/tonne = 200 mil oz., the low end of the target range. 250 million tonnes x 4 oz/tonne = 1000 mil oz., the high end of the range. That target range is the expectation that the geologists are hoping the drilling will prove up. It will likely take several rounds of drilling and analysis of drill results to get a proper resource calculation, and plenty of time.
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 project of Amador Canyon 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 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.
I own shares of NPG.V
SPM.V SMNPF.PK (SCORPION MINING)
7.4 mil shares issued
+ 7.5 mil units (x 1.5)
18.7 mil shares fully diluted? March 2004
@ $4.00/share Cdn x .75 US/Cdn = $3.00 US
$56 mil MC
Scorpio closes $16 million private placement, March 8th
MAG.V MSLRF.PK (MAG SILVER)
28 mil fully diluted shares (Nov. 19, 2003)
@ $2.01/share Cdn x .75 US/Cdn = US $1.51
$42 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.
IAU.V ITDXF.PK (INTREPID MINRLS)
email@example.com Stephen Coates, Investor Relations (416) 368-4525
40.3 mil outstanding shares
50.6 mil fully diluted w/ Dec. 9 financing (good as of March 4,2004)
@ $1.12/share Cdn x .75 US/Cdn = .84 US
$42 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)
$42 mil MC / 53 mil oz. = $.80/oz.
Hopefully, you get 10.17 ounces in the ground for 1 oz. silver.
Additional comments: More drill results released on March 3:
Intrepid Intersects 10.3m (34ft) of 70.9 g/t (2 oz/t) Gold and 988 g/t (29 oz/t) Silver at Kamila, Argentina
The stock price exploded, nearly doubling, in response to the news of the above drilling results.
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.
* MMGG.OB (METALLINE MINE) (I own shares)
firstname.lastname@example.org Merlin Bingham 208-665-2002
14 mil shares fully diluted (Oct 23, 2003)
+ 6.3 mil shares ???
20.3 mil shares?????
@ $2.90/share US
$59 mil MC
Additional Comments: Metalline Funding CompletedApril 7, Raised $8,316,500
?????I’m guessing that’s an addition of 8.3 million shares, but I don’t yet know for sure, and my prior number, I think assumed about $2 million share offering at $1/share.
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 http://biz.yahoo.com/bw/031203/35526_1.html
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 thatMMGG 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
* OTMN.PK (O.T. MINING) (I own shares)
http://www.otmining.com/ —The website has been updated.
email@example.com Jim Hess Tel: 514-935-2445
8 mil fully diluted. (+ shares from the recent PP which are not yet added to the 8 mil)
$40 mil MC
Historic silver production for the Butte district, from 1880 to 2000 was 714,643,005 oz. silver.
They think their deposit may be bigger than “the richest hill on earth”, which is located near their property, in the Butte district.
The exploration potential for this company is astounding, if they are right.
Private Placement Closed.
Here is a comparatively busy message board for O.T. Mining:
A nearly abandoned message board for O.T. Mining:
I own shares of OTMN.PK
ECU.V ECUXF.PK (ECU SILVER MINI)
firstname.lastname@example.org (819) 797-1210
fully diluted shares = 103.3 million (6 January 2003)
@ $.345/share Cdn x .75 US/Cdn = $.26
$27 mil MC
The shares of ECU.V recently stopped trading. The exchange wanted them to update their website, particularly their listing of resources and reserves. See ECU Silver Mining Inc. Clarifies and Retracts Previous Disclosure So, several resources links below are no longer working. I think I will have to list ECU as an explorer until they get a new listing of resourcs. Everything in italics below is no longer valid, and will no longer be listed after this week.
1. Regarding ECU’s exploration potential: http://www.ecu.qc.ca/indexen.html
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.
page 6 (or 8), the company says: “Exploration will mainly be targeted to verify the silver-bearing potential of certain properties, in line with the objective of increasing our reserves from 37 million to 100 million silver-equivalent ounces.” (note, the 100 mil oz. “silver equiv” spoken of by the company undoubtedly counts gold as silver at the normal ratio, not my 10:1 ratio. Therefore, my 23.4 mil oz. re-calculation is 63% of their 37 mil oz. number, and so, likewise will I count 63% of their 100 mil oz. target)
ECU.V is also exploring other gold properties.
$34 mil MC
ECU recently recovered title to properties that were in dispute. See: http://tinyurl.com/x691
ECU stock was recently stopped trading, due to updating their resource calculations. See ECU Silver Mining Inc. Clarifies and Retracts Previous Disclosure
Therefore, I have moved ECU to the explorer category–even though they are also a producer.
My understanding of this issue is that the outdated resource calculations were much smaller than what was generally perceived to be the company’s actual potential, as many ECU shareholders have indicated to me. Therefore, it seems to me that the market may have over-reacted by selling off and dropping the share price 25% on April 6. However, without a proper resource calculation, or even estimate from the company, it is more difficult to value the company. But apparantly, the market does not like uncertainty, nor the lack up regular updates, nor does it like 5-year old resource estimates…
Before the shares stopped trading, they were at .59/share, Cdn.
In the Friday, April 9th Midas report at lemetropolecafe.com, there were several emails posted where the writers were accusing one another of fraud, and accusing fraudulent price manipulation of brokerage houses, and that it’s the Exchange’s job to prevent that. I see no fraud or manipulation here, and I do not think the Exchange did anything wrong. The market moves up and down, and silver stocks, in general, are very volitile. This is just one example. The main problem was ECU’s fault, for listing a resource calculation estimate that was 5 years old, that had also been mined since then. A company has to give the market regular updates, and ECU was not doing that. The Exchange did the right thing in halting trading of ECU shares until accurate information was given to the market. The reason for the price drop is that the market did not like the updated information when it came out.
The reason to stay well-diversified is so that you can take advantage of situations like this. If you think ECU is still a great company and a great opportunity, and if you think the stock is down for no solid reason, you should sell something else, and buy more ECU. In the long run, this is how good money is made. I believe I did just that with IMR.V recently, by picking up shares in the recent dip, and my IMR position is now up 30%.
CAUCF.PK (CALEDON RES)
Shares Outstanding – 180,721,142
@ .185 at Yahoo!
(Mining in China)
It trades on the London Stock Exchange, under the symbol, CDN
$33 mil MC
MMM.TO MMAXF.PK (MINCO MINING)
23 mil Fully Diluted
@ $1.91/share x .75 US/Cdn = $1.43
$33 mil MC
Located in China
2 gold projects and 1 silver (42% owned). Explorer
$33 mil MC
MAI.V MNEAF.OB (MINERA ANDES)
email@example.com (604) 689-7017
73 mil fully diluted as of Nov. 2003
@ share $.55/share Cdn x .75 US/Cdn = $.41 US
$30 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: (The resources may be only 10% of the property.)
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.
$30 mil MC
Additional comments: Minera Andes Inc.: New Huevos Verdes East Drilling Intercepts Multiple Zones With Up To 63 g/t Gold And 1,690 g/t Silver – CCNMatthews
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. I moved MAI.V to the explorers list to be more fair to their valutation.
* EDR.V EDRGF.PK (ENDEAVOUR GOLD) (I own shares)
Hugh Clarke, Investor Relations 1-877-685-9775
14.8 million Fully Diluted Jan 21, 2004
@ $1.95/share Cdn x .75 US/Cdn = $1.46
$22 mil MC
–currently producing 600,000 oz. silver/yr.
–expect to increase production to 4,000,000 oz. silver/yr
I own shares of EDR.V
BZA.V ABZGF.PK (AMER BONANZA)
119 mil shares fully diluted Sept, 2003
@ .24 x .75 US/Cdn = $.18
$21 mil MC
American Bonanza Acquires High Grade Silver Property in Nevada & Goldcorp Exercises Warrants
DNI.V DMNKF.PK (DUMONT NICKEL)
firstname.lastname@example.org (416) 595-1195
56.4 mil shares outstanding
@ $.405/share x .75 US/Cdn = $.30
$17 mil MC
Dumont still needs to raise and pay several million to clifton for 50%-60% of each property, and there are many properties. (See Clifton for more specifics on the JV agreement.)
Additional comments: Clifton’s JV partner, doing active drilling work right now. And recent property acquisitions. I moved Dumont to the explorer category, because I really don’t have any idea what percent of Clifton’s property they may acquire, which depends on Dumont completing a feasibility study on each property.
There seems to be significant disagreement between Clifton’s shareholders and Dumont’s shareholders on which company has the better value. On the one hand, Dumont is the aggressive partner, since they are the one doing the acquiring. On the other hand, Clifton is the holder of most of the properties, and Dumont has to pay several million to acquire each of the many properties. This is a very complex deal.
I do not like JV agreements due to the complexity of trying to determine ownership which is contingent upon many unknown factors that might change in the future. One man recently offered me an interesting suggestion. He simply said, “Why not buy both?”.
EXN.V EXLLF.PK (EXCELLON RSCS)
87 mil shares fully diluted (Jan 9, 2004 press release)
@ $.27/share Cdn x .75 US/Cdn = $.20 US
$17 mil MC
indicated = 63,400 t x 2738 g/t x .03215oz./g = 5.6 mil oz. silver
inferred = 2100 t x 1,433 g/t x .03215oz./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 believes this underground development mine can, over the next two years, generate US $15.8 million or nearly $8 million for EXN’s 51% share.” That was when silver prices were under $5/oz.! 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.
BCM.V BCEKF.PK (BEAR CRK MINING)
39.2 million shares fully diluted
@ $.59/share Cdn x .75 US/Cdn = $.44 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.)
NJMC.OB (NEW JERSEY MIN)
Fred or Grant Brackebusch email@example.com
23.9 fully diluted Apr, ’04
@ $.73/share US
$18 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.
CMA.V CRMXF.OB (Cream Minerals Ltd)
= 34.8 mil shares fully diluted (March 31, 2004)
Project B: Potential Target: 400m x 500m x 150m x 2.5 t/m3 = 75,000,000 tonnes
Say at: Au 0.480 g/t Ag 149.33 g/t
Silver only, that’s (1 gram = .03215 troy oz.) 4.8 oz./t x 75 million tonnes = 360 million oz. “exploration potential” in a low-grade deposit.
@ $.77/share x .76 Cdn/US = $.58 US
$20 mil MC / 360 mil oz. = $.056/oz. (exploration potential) –not a “resource”!!!
You may get 144 oz. of silver, per oz. of silver’s worth of stock. (Compare to NPG.V)
Additional comments: Another silver property is the Kaslo.
“The Kaslo Silver Property encompasses the Keen Creek Silver Belt and is comprised of nine former high grade silver mines”…
* KG.V KDKGF.PK (KLONDIKE GOLD) (I own shares)
70 mil fully diluted (Nov. 2003)
@ $.28/share Cdn x .75 US/Cdn = $.21 US
5 year high .30
$15 mil MC
Klondike was up very strongly on Friday in the pinksheets.
This company has many silver and gold properties. Some of the people are also involved with GNG.V, Golden Goliath.
Klondike has one silver property that could be producing within weeks.
(I own shares of KG.V)
* CBE.V CBEFF.PK (CABO MINING)(I own shares)
firstname.lastname@example.org (604) 681-8899 John Versfelt, President
Fully diluted subtotal, including shares needed to acquire two drilling companies, which is contingent upon a financing.
= 18,880,436 as of February 9th, 2004 (Post-Consolidated)
(Plus a proposed $5 million financing to acquire the two drilling companies.)
@ $1.32/share Cdn x .75 US/Cdn = .99
$19 mil MC
Cabo Mining issued a 4 page press release on Jan. 5 detailing theis contracts to acquire two drilling companies.
I wrote an article on Cabo on February 10th. Market Perspective & Cabo Mining – Hommel
In the article, I highlight what I feel is Cabo’s most imporant asset: control of 60% of the mining camp of Cobalt, Ontario. The “silver capital of Canada” produced historically, over 500 million ounces of silver.
Cabo announces Second $5 million private placement, at .83/share.
Although I’m generally wary about excessive dilution, this second PP is well-needed. The first $5 million PP was primarily for the drilling companies, and the second will allow the company to explore the Cobalt properties better.
Cabo has exposure to silver, cobolt, nickel, gold, diamonds, and drilling companies.
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. This will give the company positive cash flow after they raise the money to acquire the drilling companies.
Cabo had a significant discovery, as indicated in a press release on Feb 4. Some of their grab samples have very high percentages of Cobalt and Nickel. One vein grab sample was almost 30% nickel, (2 over 20%), which is at $7/pound. Three samples were over 3% Cobalt, which is at $30/pound.
To learn more about the mining camp town of Cobalt, there is a fascinating article detailing the history of the silver camp at http://www.cobalt.ca/cobalt/history.htm
I own shares of CBE.V
SML.V SMLZF.PK (STEALTH MNRLS)
Email-Bill@McWilliam.com 604-306-0391 Bill McWilliam, Chief Executive Officer
48 mil shares (August 31- 02)
@ $.47/share Cdn x .75 US/Cdn = $.35
$17 mil MC
NBG.V NBULF.PK (NEW BULLET GP)
50 mil shares fully diluted (including 15 mil new PP)
@ $.385/share Cdn x .75 US/Cdn = $.29 US
$14 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.
$14 mil MC / 75 mil oz. = .19 oz.
$14 mil MC / 210 mil oz. = .066 oz.
Exploration potential = 42 – 122 oz. per oz. worth of shares.
SDR.V SDURF.PK (STROUD RSCS) (There is no PK symbol as yet)
email@example.com Mr. George E. Coburn, President Tel: 416-362-4126
87.4 mil fully diluted shares (April, 2004)
@ $.195/share Cdn x .75 US/Cdn = .15
$13 mil MC
JV partner with NBG.V on Santo Domingo Silver Project in Mexico.
150 to 300 mil oz. exploration potential of the deposit.
ownership is between 30-50%, so… 30% of 150 mil oz.= 45 mil oz., and 50% of 300 mil oz. = 150 mil oz.
$13 mil MC / 45 mil oz. =
$13 mil MC /150 mil oz. =
CHMN.PK (CHESTER MINING)
Bill Hoyt, 785-383-9246
” 2.3 million shares outstanding, positive working capital and no debt “
@ $4.50/share US
$11 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.
$11 mil MC
EPZ.V ESPZF.PK (ESPERANZA SILVR)
20 million shares fully diluted
@ $.85/share Cdn x .75 US/Cdn = US $.64
$13 mil MC
“Esperanza Silver Corporation is solely dedicated to the identification, acquisition and exploration of new silver projects.” Looking for high grades.
GNG.V GGTHF.PK (GOLDEN GOLIATH)
32.4 mil shares fully diluted
@ $.485/share Cdn x .75 US/Cdn = $.36
$12 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.
Price moved up 27% on Thursday, on little volume, about $85,000 US. worth.
MMG.V MMEEF.PK (MCMILLAN GOLD)
25.6 mil shares outstanding (3q 2003 report June, 2003)
@ $.54/share Cdn x .75 US/Cdn = $.405
$10 mil MC
SHSH.PK (SHOSHONE SILVER)
Bill Hoyt, 785-383-9246
12 mil shares
@ $.78 US
$9 mil MC
In Cour d’Alene, near CDE, HL, & SRLM.PK
* KRE.V KREKF.PK (KENRICH ESKAY) (I own shares)
16 mil shares outstanding. Use “fully diluted” to be safe.
@ $.67/share Cdn x .75 US/Cdn = .50
$8 mil MC
Adjacent to Barrick’s silver property, Eskay Creek, which is “the fifth largest silver producer in the world”.
70% of the rights to The Property was once almost bought by Homestake (which was acquired by Barrick) for $35 million in 1996, and Homestake was going to fund all exploration and development. The buy out ended when metals prices collapsed, and Bre-X hit, and when the majors cut back on exploration budgets to stay alive. This means the market cap of KRE.V may be worth 100%/70% x $35 million, or $50 million, plus exploration and development costs, to a major mining company, and likely worth much more today, due to inflation of the dollar, and the rise in the price of silver!
I’m not exactly sure about the market cap at the moment, not quite sure how many fully diluted shares. So don’t bid the price up too much without calling the company, and doing your own calculations of what you think this company might be worth.
I own shares of KRE.V
EGD.V EGDMF.PK (ENERGOLD MINING)
Fred Davidson President (604) 681-9501 firstname.lastname@example.org
16.8 million Fully Diluted (June 30, 2002)
@ $.64/share Cdn x .75 US/Cdn = $.48
$8 mil MC
PCM.V PAOCF.PK (PAC COMOX RES)
66 mil fully diluted Jan, 2004 (From Dec 11, 2003 press release and 2002 report)
@ $.15/share Cdn x .75 US/Cdn = .11
$7 mil MC
LEG.V LEGCF.PK (LATEEGRA RSCS)
Michael Townsend, President Toll Free: 1-866-669-9377 Richard one of the IR guys.
38.7 fully diluted? (Jan 7, 2004)
@ $.20/share Cdn x .75 US/Cdn = $.15 US
$6 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
BGS.V BLDGF.PK (BALLAD GLD SLVR)
16.3 mil shares outstanding
@ $.37/share Cdn x .75 US/Cdn = $.28 US
$5 mil MC
Bonanza grade “grab samples” in southern Argentina near IMA
* AUN.V AUNFF.PK (Aurcana Corp) (I own shares)
CEO Ken Booth 604-331-9333 email@example.com
45 million shares (fully diluted) (March 2004)
@ $.16/share Cdn x .75 US/Cdn = $.12 US
$5 mil MC
Drilling to commence on high-grade, gold-silver targets. (in Mexico)
(I own shares of AUN.V)
SRY.V (STINGRAY RSCS)
firstname.lastname@example.org (416) 368 6240
5.9 mil fully diluted
@ $.98/share Cdn x .75 US/Cdn = $.74
$4.3 mil MC- Current projects centered in the Sierra Madre Belt of Mexico
TUO.V TEUTF.PK (TEUTON RES)
Dino Cremonese, P.Eng. President (604) 682-3680
20.6 mil fully diluted (July 28,2003)
@ $.29/share Cdn x .75 US/Cdn = $.22
$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”
ASLM.PK (AMER SILVER MINI)
2.75 million shares issued
$5 mil MC
Claim between CDE and the old Sunshine mine.
JV with CDE subsidiary until 2017. ASLM to receive 20% net royalty, & if silver prices reach $16.50 an ounce or above, the profit sharing goes to 40%.
Coeur d’ Alene, Idaho
BBR.V BBRRF.PK (BRETT RES)
17.2 fully diluted
@ $.28/share Cdn x .75 US/Cdn = $.21
$4 mil MC
Yukon –grab sample of 611 g/t Ag
Argentina –samples from 31 to 5640 g/t Ag
ROK.V ROCAF.PK (ROCA MINES INC)
14.3 mil fully diluted (July 15, 2003)
@ $.29/share Cdn x .75 US/Cdn = .22
$3.1 mil MC
CBP.V CPBMF.PK (CONS PAC BAY MIN)
Guilford Brett, IR (604) 682-2421
9.2 mil shares outstanding
@ $.15/share Cdn x .75 US/Cdn = .11
$1 mil MC
–CBP.V is the smallest market cap silver stock that I know of. It is truly a “penny stock”.
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.
* TBLC.PK (TIMBERLINE RES) (I own shares)
* PDO.V (PORTAL DE ORO RS) (I own shares)
Portal Resources Enlarges Arroyo Verde Project, Argentina – CCNMatthews
QTA.V QURAF.PK (QUATERRA RES)
Jay Oness Toll Free: 1-888-456-1112
# shares uncertain.
three main properties in North America
@ $.???/share Cdn x .75 US/Cdn = $.53 US
QTA.V is a Sister Company to Western Silver, WTZ above.
Planet Exploration Inc.
Planet holds an option to acquire a 100% interest in the high-grade 7,005-hectare Copalquin gold/silver property located in Durango, Mexico.
“Resource estimates on the property have not been calculated since the discovery of the high-grade vertical fault zone, its existence may significantly alter Kennecott’s and Fransisco Gold’s original target potential of one million ounces of gold and 50 million ounces of silver based on their interpretation of a low-grade horizontal quartz breccia formation.”
Grand Central Silver Mines Inc (GSLM.PK)
ATN.TO/ATNAF.PK (Atna Resources Ltd.)
37.1 mil shares fully diluted ???
The company holds a diverse portfolio of gold, silver, zinc and copper properties in the United States, Canada, Mexico, and Chile.
37 M shares (fully diluted)
(Wolverine) 40% of 2300 Mg Ag = 30 Moz Ag
+ (Marg) 67% of 340 Mg Ag = 7,5 Moz Ag
+ (Wolf) 67% of 340 Mg Ag = 7,5 Moz Ag
+ (Nevada explorations) 40% of ?
+ (Ecstall) 140 Mg Ag = 4,7 Moz Ag
The Wolverine Project is a joint venture between Atna (40%) and Expatriate Resources Ltd. (60%).
Legend Mining LEG.AX LGDMF.PK
specialising in exploration and production of silver.
Silver at the Munni Munni Joint Venture in the West Pilbara region of Western Australia
Email to me said: “Legend Mining just bought a 70,000 ounces per
year gold mine in 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
Merger Mines Corp (MERG.PK)
Coeur d’ Alene, Idaho
Coeur d’ Alene, Idaho
–working to get a new stock transfer company
http://www.oxusgold.co.uk/ 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 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)
Andean American Mining Corp AAG.V ANMCF.PK
–concentrates solely in Peru
Peru currently stands as the largest gold producer and second largest copper producer in Latin America as well as the second largest silver producer in the world.
Langis Silver & Cobalt Mining Co Ltd LSM.V
Phone: (416) 628-5936
Silver Butte Mining SIBM.OB
(mine abandoned in 1996, copper/zinc waste water?)
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 lemetropolecafe.com and silver-investor.com (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
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Final Disclaimer: I have not received any compensation from any public silver stock company for writing up my weekly report on “Silver Stocks–Comparative Valuations”. I own shares of the following 18 silver stocks: CMA.V, PLE.V, TBLC.PK, PDO.V,AUN.V, EDR.V, IMR.V, KG.V, MGN, CBE.V, NPG.V, SVL.V, MMGG.OB, TM.V, OTMN.PK, FCO.TO, KRE.V, FR.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. I believe the SEC does not requrie a disclosure regarding finder’s fees. Nevertheless, I have begun to receive “finder’s fees” from a few companies.