Silver Stocks–Comparative Valuations
Weekly Report # 35
by Jason Hommel
The Silver Stock Report
FRIDAY, May 21st, 2004
This week’s report lists 114 silver stocks. There are 30 silver stocks that list reserves, resources (and exploration potential.) which I calculate by using my “ounce in the ground” forumula. There are 54 explorers. There are about 30 additional “silver” stocks with incomplete information. Additions & Changes from last week are in bold.
If you want to receive an email notice of when and where this FREE weekly report is published, sign up at The Silver Stock Report Anyone who signs up will also get a FREE e-book that explains the bullish case for gold and especially silver. If you have studied the silver market at all, then the time has come that you ought to be a teacher, and you ought to explain the silver story to all who will listen. The Silver Stock Report is designed to help spread the word. I suggest you email the link to your address book, or 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 $5.84/oz. as of Friday, 5:30 PM West Coast US, which was used to calculate the following figures. The CAN $ / US $ conversion factor is .7281. I will use .73 for ease.
How to read the following table:
Stock Symbol that works at Yahoo! Finance (Company name) / Silver oz. “in ground” for 1 oz. silver’s worth of stock. / 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”)
- ABX (BARRICK) 0.94 up –infamous hedger (18 mil oz. gold hedged, 3 yrs production) hedged?
- CDE (COEUR D’ALENE) 1.3 up –current producer, (gold bonus) in debt.
- IPOAF.PK (INDUSTL PENOLES) 1.8 down –current producer, mostly family owned, hedged?
- SIL (APEX SILVER) 3.4 up –large zinc bonus, low grades, cash rich–$345 million! in debt
- GRS GAM.TO (GAMMON LAKE) 3.6 up –current producer, owns 26% of Mexgold
- FSR.TO FSLVF.PK (FIRST SILVER) 4.4 up –current producer, (not profitable ’03 3rd q.) unhedged
- PAAS (PAN AMERICAN SILVER) 4.9 up –current producer, in debt.
- MFN MFL.TO (MINEFINDERS) 5.0 up –significant gold bonus, $35 mil cash on hand.
- KBR.V KBRRF.PK (KIMBER RSCS) 5.3 up One property, high grades, with exploration potential.
- CFTN.PK (CLIFTON MINING) 5.5 down — (130 EXPT) (colloidal silver patent bonus)
- MGR.V MGRSF.PK (MEXGOLD RSCS) 6.5## even (##exploration target) — bonanza grade discovery on Jan 13th
- WTZ WTC.TO (WESTERN SILVER) 5.5 up — (23 EXPT) large mine development cost. copper & zinc bonus
- * TM.V TUMIF.OB (TUMI RSCS) 6.9 up — (14 EXPT) recent bonanza grade silver discovery
- SSRI SSO.V (SILVER STD RSC) 8.0 up –multi-property company, understands silver story
- CZN.TO CZICF.PK (CDN ZINC) 8.7 way up –large zinc bonus, high grades, low start up costs, great EXPT
- ORM.V OREXF.PK (OREMEX RES) 8.8 up (37 EXPT)
- SRLM.PK (STERLING MINING) 12.2 down –(29 EXPT) acquired the Sunshine in Cour d’Alene
- CHD.V CHDSF.PK (CHARIOT RSCS) 14.7 down (explorer, with inferred resources)
- GGC.V GGCRF.PK (GENCO RESOURCES) 14.5 down
- RDV.TO RDFVF.PK (REDCORP VENTURE) 16.2 down –60% gold bonus
- FAN.TO FRLLF.PK (FARALLON RSCS) 16.9 up –(29 EXPT) low grades, silver 1/3; also gold & zinc bonus.
- ADB.V ADBRF.PK (ADMIRAL BAY RSCS) 19.9 down –actively expanding resources. (Huge gas bonus)
- * PLE.V (PLEXMAR RES INC) 22 down
- HDA.V (HUSIF?) (HULDRA SILVER) 23.2 up –very tiny, zinc bonus, low start up costs.
- ASM.V ASGMF.PK (AVINO SILV GOLD) 27.8 up –owns 49% of the Avino +4 other silver props. (silver bonus)
- EXR.V EXPTF.PK (EXPATRIATE RECS) 27.9 up –significant zinc bonus 60% zinc, 25% silver
- * MGN (MINES MGMT) 28.6 down –60% copper bonus (low grades), start up cost ~ $250 mil
- * SVL.V STVZF.PK (SILVRCRST MINES) 29.2 up –(49++ EXPT) –(Silver in Honduras) ++
- ABI.V ABMBF.PK (ABCOURT MINES) 40.3 down –large zinc & small gold bonus
- UNCN.OB (UNICO INC) 58 up –lease expiring on largest property, June 1 2004??
* = I own shares
Explorers (by market cap, in millions):
- HL (HECLA MINING CO) .33 down –current producer (gold bonus) cash rich.
- SPM.V SMNPF.PK (SCORPIO MINING)
- * IMR.V IMXPF.OB (IMA EXPL)
- EZM.V EZMCF.PK (EUROZINC MINING)
- CDU.V CUEAF.PK (CARDERO RSCS) 44-74 “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)
- * MMGG.OB (METALLINE MINE) –zinc/silver (historic high grade silver) (low cost revolutionary oxide zinc process)
- TVI.TO TVIPF.PK (TVI PACIFIC) –current producer of a dore silver bar 96% silver, 4% gold
- * OTMN.PK (O.T. MINING) very large exploration potential
- * FR.V FMJRF.PK (FIRST MAJESTIC) — Bought a former silver producer. Acquiring silver properties.
- * NPG.V NVPGF.PK (NEVADA PAC GOLD) 29-146 “exploration potential” (owns 1 silver property, 10 gold properties)
- MAG.V MSLRF.PK (MAG SILVER)
- IAU.V ITDXF.PK (INTREPID MINRLS) 7 “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)
- PXI.V PNXPF.PK (Planet Exploration Inc.)
- * CBE.V CBEFF.PK (CABO MINING) –Historic Silver and Cobalt district
- QTA.V QURAF.PK (QUATERRA RES)
- * 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) 194 “exploration potential”
- * KG.V KDKGF.PK (KLONDIKE GOLD)
- SML.V SMLZF.PK (STEALTH MNRLS)
- NBG.V NBULF.PK (NEW BULLET GP) 54 – 150 “exploration potential”
- SDR.V SDURF.PK (STROUD RSCS)
- ATN.TO ATNAF.PK (ATNA RES. LTD) partners with Expatriate Res.
- CHMN.PK (CHESTER MINING)
- EPZ.V ESPZF.PK (ESPERANZA SILVR)
- GNG.V GGTHF.PK (GOLDEN GOLIATH) –Historic silver district in Mexico
- GPR.V GPRLF.PK (GREAT PANTHER)
- 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)
- MTB.V (Mountain Boy Minerals Ltd)
- LSM.V LASCF.PK (Langis Silver & Cobalt Mining Co Ltd)
- 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.
I believe that the two most important numbers that a silver mining company can report are the resources in the ground, and the number of their fully diluted shares. Of course, there is much more to a mining company than that, but without those numbers, it is extremely difficult to even start an evaluation. This report highlights those key numbers, where possible. If you think those numbers are also important, please email the executives of the mining companies you own, and ask them to make sure their numbers are clearly published at their websites.
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 silver bull is definitely back! As I produced this report this Friday evening, I see that most of the silver stocks are up significantly from last week. Many are up by 20% or more, all in one week. This week was definitely a turning point for the entire silver stock sector.
There are two excellent annual silver surveys for 2003 that are sponsored by industry.
The survey by silverinstitute.org costs $195, 87 pages.
http://www.silverinstitute.org/wssum03.pdf — 8 page free summary of last year’s report.
The survey by cpmgroup.com costs $150, 162 pages.
http://www.cpmgroup.com/SSpress2004.pdf –3 page press release.
It is alleged that these reports are inaccurate and biased. People have complained or alleged that the reports are either produced by the miners, and thus overly bullish, or produced by the users, and thus, overly bearish.
Although the information within the reports do slightly differ from each other, I would guess the reports are reasonably accurate. Or, at least, reasonably accurate enough to know that you are doing very well by buying silver now.
The two reports present the case that about 500 million oz. of silver are mined each year, about 200 million oz. of silver comes from scrap, and about 100 million oz. of silver comes from investor dis-hoarding, either by individuals or government sources, in order to meet the annual demand of about 800 million oz. of silver by industry & jewelry. This is wildly bullish, because investors are net selling more than buying, and I think the potential of investor demand is huge, and can be measured by seeing how much paper money there is in the world.
The main problem, I think, is that these industry reports are not widely advertised. I believe the general public is generally unaware of the silver supply and demand story as contained in these reports. The wildly bullish case for silver may be known relatively well (or not) within the silver investing community, but not by the man on the street who is still in the process of inheriting “free” silver, and selling it for the quick cash when he can.
As I see it, the second biggest problem with the reports is that they are biased. They overlook the monetary aspect of silver. They focus on current supply and current demand for silver. While that is certainly useful, they neglect to emphasize the potential monetary demand for silver, that does not exist at the moment. Potentially, all the paper money that exists could demand silver and gold above all else, because gold and silver are money, and paper dollars are fraud. The reports neglect this point, or dismiss it as somehow not valid. The point is even dismissed as if this was a “religious” concept.
Thus, when it comes to try to predict the future demand for silver, the industry reports focus all their energies on whether there will be increased demand for silver by photography, or by jewelry, or as a biocide, or as used in high temperature super conducting wires. And the reports completely neglect to focus on what may happen to silver demand with rising interest rates, or if faith in the multi trillion dollar bond markets collapse, and people demand real money that goes up in value instead of going down!
This free weekly silver stock report does contain the key bullish points as contained in these two reports. But I also focus on how much money is out there in the form of dollars, bonds, and in the banks! Because, in the future, that will determine the potential of monetary demand for silver, which will, in the long run, determine its value.
Speaking of silver’s potential value, how will it actually be valued if the whole world returns to using gold and silver as I expect? Sure, it may go up a lot in terms of dollars, but won’t everything else just cost that much more, too? No. No! I expect silver’s rise in value to far outpace every other asset, and every other commodity you can buy.
As proof, let’s look at the historic value for silver. And given the ongoing supply/demand deficit, and shortage, as reported by the two industry reports above, I expect silver’s value to far exceed the historic value.
There are several ways to evaluate silver’s historic value. The first is to look at what silver could buy, and to look at what wages were in terms of silver.
I have written that a day’s wage, in silver, for skilled labor, about 100 years ago, ranged from being a silver dime as one man reported, a silver quarter during the great depression in the 1930’s, or as much as a silver dollar. Henry Ford paid his workers, what was considered a very excessive $5.00 a day. In silver, at .72 oz. per silver dollar, that was 3.6 oz. of silver per day. But remember, that was an extremely high and very unusual wage. It was made possible by the very high productivity of the assembly line, and little government regulations or taxes. If silver returns to historic norms, it will be an ounce of silver, or less, for a day’s wage. Due to scarcity of silver, it may well be more like less than a 1/10th of an ounce of silver per day. Or perhaps, a silver dime for two weeks of labor!
The reason is that the U.S. has well over 100 million workers, yet the world has about 250 million oz. of silver in known inventories! If 1/10th of an ounce of silver is a day’s wage of $100, then an ounce of silver would be $1000/oz.
The other historic value was the gold to silver ratio. One ounce of gold was the same value as about 10 to 15 ounces of silver. Again, due to silver’s scarcity today, that ratio will certainly deserve to be exceeded, to at least 5 ounces of silver to one ounce of gold. Thus, silver will be valued at about 1/5th of $400, or $80, assuming that gold is fairly valued at $400. But, if gold should really be valued at about $5,000 per ounce, then silver will be about $1000/oz.
In both of these examples, this does not mean the price of a gallon of milk would shoot up to $400 per gallon. I would expect that milk prices would remain the same, at $4.00 per gallon.
If milk rises to $40/gallon, and if consumer prices rise by a factor of ten, then increase the “future value” price for silver also by a factor of ten, so that silver would be $10,000/oz, and 1/10th of an ounce of silver would be $1000, so that a 1/10 of an ounce of silver would be able to buy the things you’d buy today with a day’s wage.
And if you truly believe that an economy would be run more efficiently, as I do, without all the fraud of the dollar negatively affecting things, then you should assume, as I do, that a day’s wage of silver (however small of an amount that would be) should help the average consumer to be able to buy more than a day’s wage of fiat money can buy today.
Further proof: Monetary demand during inflation will go into all tangible things, yes. However, nobody can buy and store a billion dollars worth of “milk”. Milk spoils. It’s simply too inconvenient to use as money. And so are nearly all other goods. Silver does not spoil, and people will realize that no other commodity has the peculiarly unique properties that the precious metals have, that make them the only tangible things that qualify as money.
This combination of factors then, forms my view of silver as an investment. I expect the future value of silver to be at least $1000 per ounce, in terms of today’s money and today’s value and today’s purchasing power. Let me rephrase so everyone is clear. I believe that an ounce of silver will buy what $1000 of today’s money will buy. Today, with $1000, I can buy a month’s rent. Yes, a month’s rent may cost an ounce of silver in the future. Today, with $10,000, I can buy a nice used car a few years old. Yes, I expect to be able to buy a similar car, or better, with about 10 ounces of silver, in the future.
I expect that most readers will either not understand, or not believe, my point of view. That’s fine. But ask yourself: Could it really be any other way? There is going to come a time when the silver price moves up so sharply, so violently, it will be something which the world has never, ever seen. There is no experience that any human has experienced that can prepare anyone for what is coming. This will happen because the world has never totally abandoned using silver as money, until this generation. The world has never seen such a low price for silver as today, and the world has never seen such low inventory levels for silver as today, and the world has never seen such a high industrial demand for silver as today. The world has never seen such a deficit and scarcity of real money. And the world has never seen such a huge build up of false wealth, as represented by the enormous amounts of paper money that exist in the form of bonds and M3.
Therefore, I’m not scared, troubled, or concerned after having seen silver move from $8.40/oz. to $5.50/oz. Today’s price movements in silver are but tiny wiggles, and are insignificant in the long run, in the grand scheme of things. Silver will remain a screaming good buy even at $50 to $100 per ounce. And at that price, there will be billionaires lining up and begging to get it, because there will be little else for them to buy to protect their bonds and money from going up in smoke as inflation wipes out the paper fraud and dollar debts accumulated by generations.
Today is not a “once-in-a-lifetime” opportunity in silver. It’s not a “once-in-100 years” event. It is an event that has never before occurred in all of human history. When in human history has anyone had the opportunity to earn $100 as a day’s wage, and be able to buy nearly 17 ounces of silver with that? When in human history has anyone has the opportunity to do this while silver was as scarce as it is today?
Reports of a shortage of silver:
I have some information that You will probably find interesting. I live
in Poland and I am a silver investor. Recently I have been gathering
information about purchasing silver in Poland. The only company that
sells silver bars here is KGHM – in 2002 this was world’s 3rd producer (after
Industrias Penoles and BHP Billiton). Until a month ago they have had
silver available for sale for everyone – I mean that the minimum order
size was 1000 oz bar (they produce 1000 oz bars) and there was silver
available to purchase. Now I’ve got a letter from KGHM in which they said
that the minimum amount of silver per purchase is ten 1000 oz bars and
that there are no silver bars available at the moment. Since investing in
silver (and in other precious metals) is not popular here (because of the
22% VAT on it) and that I doubt that local silver users bought more than
usually, I think that silver could have been exported to meet the
delivery demand in the USA/COMEX. So, Poland – a large producer of silver has no
silver available right now.
–KGHM is the world`s sixth-largest copper producer and second or third in silver. Their market cap is about $1.5 Billion.
This is exactly the kind of report I have been predicting! Given that there is a current deficit between mine supply, and industrial demand, and given that there is no significant investor demand (and in fact, there is still ongoing investor dishoarding), the price of silver will have to move way up if there is any significant investor demand! Sure enough, you can’t buy silver from several of the large miners anymore, because all of their production is pre-sold, meaning they have hedged their production at low price levels!
This report about KGHM is nearly identical to the report about Penoles in Mexico, which is the world’s top producer of refined silver. Here is the excerpt from the profile below about Penoles:
The word late Feb. 2004 from ECU Mini, who reported to lemetropolecafe.com, is that Penoles has hedged several year’s worth of silver, that is, they have locked in to sell mostly all their silver at low 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.”
Correction from last week:
Just wanted to correct something you said in your report this week. You said that you have to put up over $7k just to control one contract. That is not true. The margins were raised recently up to $3375 for initial margin, which is the Reg T (50% initial margin for equities) and then maintenance margin of $2.5k per contract. So, actually, one only needs $3375 and to maintain at least $2500 in the account per contract after the initial buy. This as of the 5.71 close represents a down payment of 11.8% with a near 9:1 built in leverage.
This is not to advocate using the leverage but to correct an error that was made in your report. For gold the figures are 2025 initial with 1500 maintenance for a near 20:1 built in leverage feature. This is more in line with what silver was before its price move and margin change. I suspect at some point in the future if silver doesn’t move very far they will reduce margins again and the implied leverage will climb back towards the historical 18-20:1 range.
Another question/concern about possible confiscation and government action;
I enjoy your weekly commentary, etc. You mentioned in your real estate section that the government can tax property owners whatever, whenever. You’re right. They can also make holding silver and/or gold coins illegal. Coin shops will be shut down, PM mines will be guarded by National Guard, banks will be closely monitored, boarders will be closed, you have explained this scenario before. This idea is only far fetched for people who cannot conceive of their country going in this direction. So my question is, “When our $ currency becomes useless, as well as worthless, and the government makes it illegal to possess coins (even for collectors), how are we ever going to cash in coins (which will be the only currency of value) so we can pay monthly expenses?” Owning coins will be equivalent to owning illegal drugs in this country. I don’t even want to discuss a black market that would form here. But I am interested in your answer. I would appreciate anonymity, but do share your advice with all your subscribers if you think it will be useful. Paraphrase the question as you see fit.
Yes, and government can, in theory, also round up all “political dissidents,” such as people who believe in the Bible, precious metals, and gun ownership, herd them into camps and stave them to death. But it does not mean that they will, or can, do so in the U.S.A., even though, in fact, governments across the world have done exactly that to Christians time and time again. You know what? This nation, the U.S.A. was founded by Christians who escaped such persecutions, and I believe there exists within our society, enough of a remnant of those people who would fight back any such attempts to do that here in the U.S.A. You can either let yourself become a coward regarding their plans for gun owners and you can sell your guns, or you can go out and buy guns in order to further protect yourself against any such tyranny. You can either cowardly sell your silver, or you can go out and buy more. It comes down to this: Do you believe in truth, and are you willing to fight for it if necessary, or would you rather be stolen from, and do nothing?
Who says that we should even tolerate government rule changes that may say silver is illegal to own? There are other options if they make silver illegal to own. You can fight back! You can work for a living, instead of live off savings, and wait for the corrupt government to topple. You can promote the use of silver as money, and earn money in the process, by being a silver bullion dealer. Start selling bullion to your friends and family. You can hire people to fight back, such as political representatives, and even pay them in silver!
The key difference between taxing land, and taxing gold and silver is that land is easily found. It does not go anywhere. Gold and silver, on the other hand, are easily hidden, and not easily found. That is why gold and silver are money, and land is not, even though both can be owned as private property. You cannot transport land! If they make gold and silver illegal, it would serve to make them scarce, and worth more.
The bigger worry, should your scenario come true, if the currency is worthless, and if silver and gold are illegal, what will people use to conduct any trade at all? If history is any guide, and it is a reliable guide, then after the fraudulent currency becomes worthless, then the corrupt government will have collapsed, and they will be unable to enforce any unjust law that says real money is illegal. How will they pay their own policemen to enforce such a law if paper money is worthless? Thus, after the government collapses, people will spontaneously use silver and gold as money.
The big worry is not that “they may take your silver, sometime in the future, maybe, if they can find it”.
The real worry is that “right now, they are taking your dollars, as they inflate!”
Recently, there has been a great success in getting silver investors to take actions to help the silver price. These grass roots efforts among silver investors have been started by Russell Townsend of http://www.goldismoney.info, and have been greatly aided by Ted Butler of http://www.butlerresearch.com and Bill Murphy of http://www.lemetropolecafe.com.
Over 3500 people have signed the silver petition to stop the manipulation at the COMEX:
And over 500 people have written letters to the CFTC regarding silver prices, which caused them to respond with a 9 page report:
The CFTC report on the allegations of manipulation in the silver market got some press this week:
I commented on the CFTC report last week, pointing out what I felt was their most absurd statement, that wealthy silver investors could buy up silver if it was too cheap. This is ridiculous in my opinion, because there is a position limit restriction of 1500 contracts per delivery period, which is a limit of 7.5 million oz. of silver, or about $45 million dollars. Thus, it would take a billionaire 4 years now to buy a billion dollars of silver at current prices.
Here is a newspaper article overseas that highlighted the CFTC response:
No silver prices manipulation: CFTC
Commission refutes allegations by investors
Ted Butler also has comments this week on the CFTC response:
This letter writing campaign has been encouraging. Silver investors are motivated to act! That’s wonderful news! But I think we were writing to the wrong people. We were writing to the CFTC head. At least, they have now been put on notice. Now, I think it’s time to take the message about silver to the people.
As I have indicated above, I do not think the general public is educated about silver. I do not think they know what is contained in the industry reports by the silverinstitute and the cpmgroup, nor do they know how much paper money has been printed, because the papers rarely mention it. It’s time we told them. I have continually called for all my readers to tell their friends and family about silverstockreport.com.
Now, I think it’s time that the silver community started a letter writing campaign to the editors of newspapers around the world, to tell them about silver. I have been wanting to do this myself, for a while, but I loathed starting the research process to find and locate the email addresses of all the major newspapers across the U.S. In fact, I was thinking of hiring someone to research on the internet to find them all, because I just do not have much time these days. But, behold! The wonder of google.com helped me to find someone who has already done the hard work for me! Look at the following three urls!
The first two urls above have lists of emails.
That url lists the email addresses for about 200 world newspapers, and about 100 U.S. newspapers, so you can email them all at once. You have to copy the list, and paste it into your email, and there are direct instructions on tips for submission of letters to the editor. Most editors, most papers, want letters of 250 words or less. So the task is easy. But if 500 people write letters on the silver market to about 300 newspapers around the world, I believe wonderful things will happen.
Here is a sample letter:
May 21, 2004
I’m a silver investor. I believe paper money is fraudulent. There is over 30 trillion dollars, U.S., worth of bonds in the world, but less than 2 trillion dollars worth of gold, according to gold.org.
As of April, 2004, the size of M3, the money in U.S. banks, has reached 9.1 trillion dollars, yet due to fractional reserve banking, the total of U.S. currency and coin in circulation is only 724 billion dollars as reported by treas.gov.
At silverinstitute.org and cpmgroup.com, they each report that silver has been in a deficit for about 15 years, where world mine supply has been about 500 million ounces, scrap supply about 200 million ounces, and industrial and jewelry demand about 800 million ounces. The difference, about 100 million ounces, has come from investor and government selling, drawing down reserves of silver. Known supplies of refined silver are down to about 250 to 600 million ounces. At the COMEX, they are down to 48 million ounces of silver left that is registered for delivery, which you can see at nymex.com.
The governments of the world are printing up too much paper money, and the world is running out of real money, silver. I believe this will lead to the price of silver rising dramatically in value, around the world.
I urge your readers to verify the statistics I have provided, and to make their own decisions.
Grass Valley, USA
(530) 274 3450
When I sent out my letter above to that list, I received about 70 “undeliverable/delivery has failed” messages. I sent it BCC, or “blind carbon copy”, which means it may be interpreted as spam. It may have had more of an impact if I sent out my letter to each address individually, but I just didn’t have the time to do that this week. Maybe next month.
I also did not include my full address, which some editors require. But I’d rather keep a bit of privacy in that regard.
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”. 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.
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. The toll free telephone customer support line is: 800-370-4154.
I will be attending the following two mining/gold shows in the next month:
1. World’s Largest Natural Resource Investment Conference…
June 02-03, 2004 – New York Marriott Marquis
2. World Gold, PGM & Diamond Investment Conference,
June 13-14, 2004 – Vancouver, BC
I will be speaking in Vancouver.
In case you can attend one of the shows, and if you want to know what I look like, there’s a picture of me here:
The Silver Stock Report
General Commentary on Silver (slightly modified from last week):
The sponsors of the Sound Money Bill in New Hampshire are now looking for donations so they can take this to other states!
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:
http://veritasradio.com/ — site temporarily disabled.
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.
Now looking to raise $25,000 to $35,000 for “phase II”, to get set up with an office and staff training..
Looking to raise $500,000 for “phase III”, to take this to about 5 other states.
Send any donations you can, to:
[These are not political campaign donations.]
SOUND MONEY FOR AMERICA,
c/o Henry W. McElroy,
15 Iroquois Rd, Nashua, NH 03063
ANY AMOUNT, ANY LEGAL TENDER CURRENCY – U.S. OR FOREIGN !
Video copies of the sound money bill press conference are available for a $35 donation.
For more info, contact
Rep. Henry W. McElroy, NH State Representative
Sponsor of the bill
We also need assistance with the following.
1. Please contact your local representative to your state government. Find out whether they might support a similar “sound money bill” in your own state.
To contact your state rep to the federal goverment, see http://www.house.gov/writerep/
To contact your state rep to your local state government, you will have to find that on your own. Try searching for “contact state representative california” and replace the name of your state in the search.
2. If you know of any local representaives to your state government, who may be GOOD, LIKE MINDED REPRESENTATIVES, SENATORS, and GOVERNORS, who may like to support, or sponsor, a sound money bill in your state, please tell them about the NH initative. Copy the above, and send it along to them. And call Henry W. McElroy or Harvey Wharfield, and let them know of the other reps who may assist the cause.
3. If you have an email list to people who may be interested in gold and silver as money, or who may be good conservatives, please send out this notice to the list, so the project can move forward!
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
—————————-WHERE and HOW to BUY SILVER BULLIONThe Silver Stock ReportSilver Is Wealth
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.
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 nor investment 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.
Over 3400 people have signed 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
$26,400,000,000,000: World stock market, June 2002: http://www.nyse.com/press/1044027443845.html
$20,200,000,000,000: U.S. bond market, yr end, ’02: http://tinyurl.com/vr7g
$11,447,800,000,000: U.S. GDP, 2004 q1 http://www.bea.doc.gov/bea/dn/home/gdp.htm
$11,300,000,000,000: NYSE U.S. stock market, April, ’04 (363 bill/s x $31.14/s ave.) http://nyse.com (See: Market info: quick facts)
$9,101,000,000,000: M3 (money in U.S. banks) April, ’04 http://tinyurl.com/vra0
$7,183,392,668,476: US debt, 5-18-04 http://www.publicdebt.treas.gov/opd/opdpenny.htm
$2,360,000,000,000: U.S. annual budget 2005 http://tinyurl.com/3xbd2
$2,572,160,000,000: Marcos/Phillipine “black/unofficial” gold: 200,000 (to 500,000) Tonnes @ $400/oz. (Book: “Gold Warriors”)
$1,860,000,000,000: World “official” gold, 145,000 T @ $400/oz. http://tinyurl.com/vrcc
$724,174,342,365: Total U.S. paper currency & coin in circulation, Dec. 31, ’03 http://www.fms.treas.gov/bulletin/index.html
$700,000,000,000: U.S. budget deficit (current).
$272,000,000,000: Market Cap of Microsoft (03-2004) http://tinyurl.com/vrcn
$222,000,000,000: M3 increase (money in U.S. banks) from Jan 2004 to April 2004 (in three months).
$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?)
$75,000,000,000: Money flowed into Equity funds in the first quarter, 2004
$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?)
$6,710,000,000: 671 mil oz. of “identifiable” silver bullion in the entire world, according to GFMS @ $10/oz.
$480,000,000: 48 mil oz. of “registered” COMEX silver bullion @ $10/oz. http://tinyurl.com/vrcw
So, what do all those stastistics mean?
From Jan, 2004 to April 2004, over those three months, the increase in M3 ($222 billion) (the money in the U.S. banking system) is over twice as much as the value of the official U.S. gold hoard. ($104 billion at $400/oz.)
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 68 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 68times 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 68 x 10, You will see that bonds and currency are overvalued relative to select silver stocks by a factor of 139,000 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 139,000 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 55% 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 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: “68 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 68 times better. Currently, the ratio is 68 ounces of silver can buy one ounce of gold or 68:1.
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 have made mistakes in the data from time to time. 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). 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.
KGHM Polska Miedz
–KGHM is the world`s sixth-largest copper producer and second or third in silver.
–Copper/Silver mine in Poland.
–Market capitalisation is about $1.52 billion.
Compania de Minas Buenaventura SA (BVN)
– Peru´s largest publicly traded precious metals company
–produces over 10 mil oz of silver per year
–looks way too expensive for the silver alone: 3.6 Billion market cap.
————– ————– ————–
535 million shares
$10,635 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.”
$10,635 million Market Cap / 1710 mil oz. = $6.22/oz. silver
You get “approx” .94 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 expect silver bullion to continue to outperform ABX stock at these prices.
CDE (COEUR D’ALENE)
email@example.com (208) 769-8155 or (800) 624-2824
213 mil shares (Issued 32 mil new shares late Oct. 2003)
$990 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)
$990 mil MC / 225 mil oz = $4.40/oz.
You get “approx” 1.33 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 expect silver bullion to continue to outperform CDE stock at these prices.
IPOAF.PK (INDUSTL PENOLES)
397.5 mil shares outstanding (2002 annual, unchanged since 2001)
$1391 mil MC
419 proven and probable reserves of silver (from 2002 annual report on website)
$1391 mil MC / 419 oz. silver = $3.32/oz.
You get “approx” 1.76 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. 2004 from ECU Mini, who reported to lemetropolecafe.com, is that Penoles has hedged several year’s worth of silver, that is, they have locked in to sell mostly all their silver at low 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 in March, 2004, that Penoles has hedged silver for two years, I expect silver bullion to continue to outperform IPOAF.PK stock at these prices.
SIL (APEX SILVER)
firstname.lastname@example.org (303) 839-5060
45,023,760 ordinary shares outstanding. (Jan 30th press release)
$789 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
$789 mil MC / 454 mil oz = $1.74/oz.
You get “approx” 3.36 ounces in the ground for 1 oz. silver’s worth of stock.
Additional comments: Apex may also have up to 35-50 exploration properties.
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 hit a recent high of $.51/lb., from a low of about $.35/lb., currently at $.47. 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.
GRS GAM.TO (GAMMON LAKE)
email@example.com (902) 468-0614
62 mil shares Fully Diluted: (Feb 27th, 2004)
$371 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.
$371 mil MC / 231 mil oz.= $1.61/oz.
You get “approx” 3.63 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)
@ $1.97/share Cdn x .73 US/Cdn = $1.44 US
$56 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.
$56 mil MC / 42 mil oz. = $1.32/oz.
You get “approx” 4.42 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.
PAAS (PAN AMERICAN SILVER)
email@example.com (604) 684 -1175
70 mil shares fully diluted (April, 2004)
$883 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
$883 mil MC / 743 mil oz. = $1.19/oz.
You get “approx” 4.91 ounces in the ground for 1 oz. silver’s worth of stock.
Additional Comments: 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 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.
MFN MFL.TO (MINEFINDERS)
34.1 mil Shares Fully Diluted (Late 2003?)
$229 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.”
$229 mil MC / 195 mil oz. = $1.17/oz.
You get “approx” 4.98 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)
firstname.lastname@example.org (604) 669-2251
31.2 mil shares fully diluted (Jan 20, 2004)
@ $1.70/share Cdn x .73 US/Cdn = US $1.24
$39 mil MC
30 mil oz. silver resources Measured & indicated, plus inferred
540,000 oz. gold x 10 = 5.4 mil “silver equiv.”
$39 mil MC / 35.4 mil oz. = $1.09/oz.
You get “approx” 5.34 ounces in the ground for 1 oz. silver’s worth of stock.
Additional comments: Kimber Reports Significant Drill Hole On Carmen Deposit
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.
CFTN.PK (CLIFTON MINING)
email@example.com 801-756-1414 (303) 642-0659 Ken Friedman
47 mil shares fully diluted (May 2004)
@ $.95/share US
$45 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”
$45 mil MC / 42 mil oz. = $1.06/oz.
$45 mil MC / 1000 mil oz. = $.045/oz.
You get “approx” 5.49 ounces in the ground for 1 oz. silver.
Exploration Potential: 130
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. One man suggested buying both Clifton and Dumont to ease the difficulty in trying to figure out their JV agreement.
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. (April) 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!
WTZ WTC.TO (WESTERN SILVER) (formerly western copper)
firstname.lastname@example.org Jay Oness Toll Free: 1-888-456-1112
43.3 mil fully diluted (April 2004)
$304 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
Western Silver Completes Pre-Feasibility Study on Chile Colorado Zone at Penasquito
New info: 267 mil oz. silver at a grade of just over 1 oz. per tonne. (an increase of 54 mil oz. over previous est.)
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
Plus, they have 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.
$304 mil MC / 287 oz. = $1.06/oz.
$304 mil MC / 1000 oz. = $.30/oz. –exploration potential
You get “approx” 5.51 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration Potential = 19
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
MGR.V MGRSF.PK (MEXGOLD RSCS)
52.5 mil fully diluted (spring 2004)
@ $4.35/share Cdn x .73 US/Cdn = $3.18 US
$167 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”
$167 mil MC / 185 mil oz. = $.90/oz.
You have an “exploration potential target” of 6.48 ounces in the ground for 1 oz. silver’s worth of stock.
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.”
* TM.V TUMIF.OB (TUMI RSCS) (TUY Frankfurt Exchange) (I own shares)
email@example.com Nick Nicolaas IR (604) 657 4058
24 fully diluted shares (Mar. 1, 2004)
@ $1.22/share Cdn x .73 US/Cdn = $.89 US
$21 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
$21 mil MC / 25 mil oz. = $.85/oz. ***I’m using this number***
$21 mil MC / 50 mil oz. = $.43/oz. (exploration potential)
You get “approx” 6.87 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration Potential: 14 (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.
SSRI SSO.V (SILVER STD RSC)
firstname.lastname@example.org (604) 689-3856 or (888) 338-0046
51.7 mil shares fully diluted (May 1, 2004)
57 mil shares fully diluted (could bring in another $45 million) as of May 15, 2004 (not sure if this number is right, could not confirm at the website, but it came in a forwarded email from Paul, and I’ll use it, because I’m so bullish on the entire sector.)
$635 mil MC
debt free, cash: $Cdn 60 mil
As of May 12: The company has budgeted $8.2 million in 2004 for feasibility and scoping studies and exploration of its 15 projects. With cash of $61 million, and marketable securities of approximately $10 million at March 31, the company decided to invest approximately 20% of its cash and securities in physical silver following the decline in silver prices in April and May. Silver Standard now owns over 1.95 million ounces of silver. This silver is held on an allocated and segregated basis and, consequently, is not available to be loaned.
not mining or producing; 15 silver properties
measured and indicated resources totaling 403.6 million ounces of silver
plus inferred resources totaling 446.4 million ounces of silver = 850 mil oz.
2.2 mil oz. gold. Silver equiv = 22 mil oz. silver. (22 + 850 = 872 mil oz.)
$635 mil MC / 872 mil oz. = $.73/oz.
You get “approx” 8.02 ounces in the ground for 1 oz. silver’s worth of stock.
Additional comments: Congradulations to SSRI for converting some of their cash, 20%, to silver bullion! I wish it was more, but it is certainly a great start! I received plenty of letters about this action, and I was watching the share price like a hawk on Thursday morning, but surprisingly, the share price hardly moved on Thursday morning.
Congradulations also, for now having more resources than PAAS. I’d expect your market cap to soon exceed PAAS which is at $839 million, especially given PAAS management’s lack of understanding that silver is money, and can be used as money. If your market cap does exceed that of PAAS soon, it could mean a share price boost of about 48%
Silver Standard Defines Second Silver Zone at La Pitarrilla-Significant Silver Grades up to 46 Oz./Ton Over 123 Feet
SSRI continues to add resources through drilling and acquisition.
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.
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, 2004
@ $.80/share Cdn x .73 US/Cdn = $.58 US
$47 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.
$47 mil MC / 70 mil oz. = $.67/oz.
You get “approx” 8.73 ounces in the ground for 1 oz. silver’s worth of stock.
Additional comments: 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.
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 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 headed up? Currently, 45 cents/lb. for zinc! Check http://www.metalprices.com/ for updates.
ORM.V OREXF.PK (OREMEX RES)
24.2 mil shares Fully Diluted (April 1, 2004)
@ $.90/share Cdn x .73 US/Cdn = $.66 US
$16 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 management 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)
$16 mil MC / 24 mil oz. = $.66/oz.
$16 mil MC / 100 mil oz. = $.155/oz. –exploration potential
You get “approx” 8.81 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration Potential: 37
Additional comments: Last week, I made a math error on Oremex. I reported the market cap as about 20% higher than it should have been. Sorrry for the mistake.
SRLM.PK ( STERLING MINING)
RDemotte@aol.com Ray DeMotte 208/676-0599
16.6 mil shares fully diluted (Apr 2004)
$110 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. “
Baroness 15 mil — tailing project, no further exploration potential.
Tesorito 17 mil — + exploration potential
sa 14 mil — + exploration potential
Total: 231 mil oz. silver
$110 mil MC / 231 mil oz. = $.48/oz.
$110 mil MC / 550 mil oz. = $.20/oz. (exploration potential)
You get “approx” 12.22 ounces in the ground for 1 oz. silver’s worth of stock.
(Exploration potential is 29.)
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. 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.”
CHD.V CHDSF.PK (CHARIOT RSCS)
45 mil shares fully diluted October 2003
@ $.395/share Cdn x .73 US/Cdn = $.29 US
$13 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.)
$13 mil MC / 32.7 mil oz. = $.40/oz.
You get “approx” 14.72 ounces in the ground for 1 oz. silver’s worth of stock.
GGC.V GGCRF.PK (GENCO RESOURCES)
IR: Rob Blankstein: 604-682-2205, or email@example.com
20+ mil shares fully diluted (April, 2004)
@ $1.10/share Cdn x .73 US/Cdn = $.80
$16 mil MC
–Producer in Mexico.
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
$16 mil MC / 40 mil oz. silver = $.40/oz.
You get “approx” 14.55 ounces in the ground for 1 oz. silver’s worth of stock.
Additional Comments: As of April, 2004, Genco is producing 35,000 oz/month of silver, earning $100,000 Cdn/month, and expects to earn $1,000,000 Cdn/month by year’s end by doubling both the tonnage and the grade. Genco is also aggressivly planning on making property acquisitions.
RDV.TO RDFVF.PK (REDCORP VENTURE)
52.7 mil shares fully diluted (March 2004)
@ $.36/share Cdn x .73 US/Cdn = $.26
$14 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.
$14 mil MC / 38.3 mil oz = $.36/oz.
You get “approx” 16.15 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)
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)
@ $1.08/share Cdn x .73 US/Cdn = $.79 US
$26 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.
$26 mil MC / 89.3 mil oz. = $.29/oz.
You get “approx” 19.86 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.
FAN.TO FRLLF.PK ( FARALLON RSCS)
(604) 684-6365 Erick Bertsch
77.5 mil shares fully diluted as of April 1, 2004
@ $.60/share Cdn x .73 US/Cdn = $.44 US
$34 mil MC
Exploration and development in Mexico.
Run by hdgold.com (Hunter-Dickinson)
On 4 sulphide deposits out of 16, 29 mil tonnes of ore grading 89 grams silver/t and 1.57 g gold/t.
Conversion: 89 grams x .03215 troy oz./gram = 2.86 oz./t silver
RE: those 29 mil tons, they “anticipate increasing resources to 50 mil tonne range…”
2.86 oz./t silver x 29 mil tons = 83 mil oz. silver
1.5 mil oz. gold x 10 = 15 mil oz “silver equiv”.
Total: 98 mil oz. silver equiv.
(Exploration potential = x 1.7 = 167)
(Minus: The recoveries on low grade ores such as this are typically not 100%, but may be more like 50-85%, but it also depends on which metal in the polymetalic deposit that they most focus on extracting, and also depends on advances in technology.)
$34 mil MC / 98 mil oz. silver equiv. = $.35/oz.
$34 mil MC / 167 mil oz. silver equiv. = $.20/oz. –exploration potential
You get “approx” 16.86 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration potential = 29
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 in late 2003 was 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.)
The stock once had a market cap of $450 million, Canadian.
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.
PLE.V (PLEXMAR RES INC)
62 mil fully diluted (March 2004)
@ $.225/share Cdn x .73 US/Cdn = $.16 US
$10 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.
$10 mil MC / 38.4 mil oz. = .26/oz.
You get “approx” 22.02 ounces in the ground for 1 oz. silver’s worth of stock.
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?)
@ $.40/share Cdn x .73 US/Cdn = US $.29
$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
$2 mil MC / 8 mil oz. silver = $.25/oz.
You get “approx” 23.2 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.”
ASM.V ASGMF.PK (AVINO SILV GOLD)
email@example.com 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)
@ $1.36/share Cdn x .73 US/Cdn = $.99 US
$11 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”
$11 mil MC / 51.5 mil oz. = $.21/oz.
You get “approx” 27.79 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.
EXR.V EXPTF.PK ( EXPATRIATE RECS)
firstname.lastname@example.org 1-877-682-5474 Dr. Harlan D. Meade, President and CEO
88 mil shares fully dulted March, 2004
@ $.22/share Cdn x .73 US/Cdn = $.16
$14 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”.
$14 mil MC / 67.4 oz. silver = $.21
You get “approx” 27.85 ounces in the ground for 1 oz. silver’s worth of stock.
Additional comments: Expatriate has been having positive drill results in the last few months. Both Expatriate and CZN, both silver/zinc companies, had really dropped in price recently.
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.
* MGN (MINES MGMT) (I own shares)
email@example.com (509) 838 6050 Doug Dobbs
12.4 mil shares fully diluted (April 2004)
$53 mil MC
261 mil oz. silver resources. Previous drilling spent over $100 million drilling the property.
$53 mil MC / 261 mil = $.20/oz.
You get “approx” 28.60 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 recently at $1.24/lb.), 2 Billion pounds of copper, and 261 mil oz. of silver. Doing the math:
261 mil oz. silver x $5.70/oz. = $1.487 Billion.
2 Billion lbs copper x $1.24/lb.. = $2.5 Billion.
Total value of mineralization before costs to extract, $4.0 billion. It was recently a high of: $4.8 Billion. This number increased from around $3 Billion just a few months ago!
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
Mines Management has a new Message Board at Yahoo! Finance:
I own shares of MGN.
* SVL.V STVZF.PK (SILVRCRST MINES) (I own shares)
firstname.lastname@example.org (604) 691-1730
25.9 million fully diluted March, 2004
@ $.94/share Cdn x .73 US/Cdn = $.69 US
$18 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.
$18 mil MC / 89 = $.20/oz.
$18 mil MC / 149 = $.12/oz.
You get “approx” 29.24 ounces in the ground for 1 oz. silver’s worth of stock.
(Exploration potential = 49++ oz.)
Additional comments: April 6th: SilverCrest Reports El Zapote Resource Estimates
–Silvercrest added about 14 million oz. of silver resources in the April 6th press release.
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
ABI.V ABMBF.PK (Abcourt Mines Inc.)
no website Jeff Tremblay (IR) (418) 575-1169
26 mil shares fully diluted (May, 2004)
@ $.145 share Cdn x .73 US/Cdn = $.11
$2.75 mil MC
no debt., North of Montreal., 8 mil shares family owned.
proven reserves… not ready to be opened, re-opened perhaps in mid 2005?
–Past producer, so there’s existing infrastructure.
–Resource: 18.1M oz silver, 120,000 oz. gold, 303,000 tons zinc, 2,308 tons copper
$273 million worth of zinc at .45/lb, $108 million worth of silver at $6/oz, $45.6 mil worth of gold at $380
$2.75 mil MC / 19 mil oz. = $.15/oz.
You get “approx” 40.31 ounces in the ground for 1 oz. silver’s worth of stock.
Additional comments: looking to raise $5 mil to reopen the gold mine.
needs $5 mil to reopen the silver mine. (drilling the silver mine planned for summer, 2004)
needs $5 mil for the zinc project.
UNCN.OB ( UNICO INC)
Ray Brown, 530-873-4394
70 mil shares
$5 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.
$5 mil MC / 49 mil oz. = $.10/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. A few explorers may also be producers.
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. IE, everyone is an explorer!
The list above is not a list of producers, the list above is a list of companies with significantly measurable resources in the ground. Those below, generally do not. Or, if they do have resource numbers, the numbers are very small compared to their much larger exploration potential, and thus, they are listed here.
(The order in this list is by largest market cap first, not by “comparative value” of the market cap divided by the resources, as above. However, in a few cases where a company does list their exploration potential, I do provide a number of what that might give you, in terms of silver ounces in the ground, for an ounce of silver’s worth of stock.)
HL (HECLA MINING CO)
email@example.com (208) 769-4100
115 mil shares
$692 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.
$692 mil MC / 36 mil “oz.” = $19.23/oz.
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.
Hecla has a net income of $6.2 million for the first quarter of this year. Annualized, that’s $24.8 million for the year, which gives a P/E ratio of 25, which indicates to me that HL is still too expensive of a stock to buy.
Hecla is the most expensive company on the list in terms of cost per oz. of silver in the ground.
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 expect silver bullion to continue to outperform HL stock at these prices.
EZM.V EZMCF.PK (EUROZINC MINING)
224 million shares Fully Diluted
@ $.60/share Cdn x .73 US/Cdn = $.44
$98 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.
SPM.V SMNPF.PK (SCORPIO MINING)
52.2 mil shares fully diluted April 2004 (after recent $16 million Cdn private placement)
@ $2.50/share Cdn x .73 US/Cdn = $1.83 US
$92 mil MC
Scorpio closes $16 million private placement, March 8th
*IMR.V IMXPF.OB (IMA EXPL) (I own shares)
43.4 mil Fully Diluted shares (May 1, 2003)
@ $2.55/share Cdn x .73 US/Cdn = $1.86 U.S
$81 mil MC
Exploring in Argentina.
$4.5 million cash
Additional comments: As of late April, 2004, IMA expects to release a resource calculation, based on their latest drilling results, within about 3 weeks.
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
CDU.V CUEAF.PK (CARDERO RSCS)
Henk Van Alphen — President (604) 408-7488
32 million shares fully diluted Dec. 11th , 2003
@ $2.87/share Cdn x .73 US/Cdn = $2.09 US
$67 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:
$67 mil MC / 500 mil oz exploration potential = $.13/oz.
$67 mil MC / 850 mil oz exploration potential = $.08/oz.
Exploration potential: you might get about 44 – 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)
@ $.36/share Cdn x .73 US/Cdn = .26
$10 mil MC (US)
Additional comments: They own 5.82 million shares and 388,000 warrants of Cardero at $.35, which usually is 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)
$36 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.
News article in Australia on MCJAF
* FCO.TO FCACF.PK (FORMATION CAPTL) (I own shares)
165 mil fully diluted, March 2004
@ $.45/share Cdn x .73 US/Cdn = $.33
$54 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
* MMGG.OB (METALLINE MINE) (I own shares)
firstname.lastname@example.org Merlin Bingham 208-665-2002
21.6 mil shares fully diluted (April, 2004) (only 2 mil options and warrants)
@ $2.50/share US
$54 mil MC
$8 million cash in the til.
Additional Comments: Metalline Funding Completed April 7, Raised $8,316,500
Metalline’s Sierra Mojada Project Status Report Wednesday May 5
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 that MMGG took the initiative to terminate the agreement. Penoles did not issue a statement indicating any intent to walk away. Penoles’ delay or indecision caused them to lose the rights to their buy-in option agreement. Just like if you have an “in the money” option, it’s a mistake to let it expire.
For more, see the research works article here:
(Merlin of MMGG.OB, and Harlan of EXR.V (friends, actually) both have reports that will educate you on the bullish story for Zinc.)
I own shares of MMGG.OB
TVI.TO TVIPF.PK (TVI PACIFIC)
Dianne (IR) Phone: (403) 265-4356
378 mil shares fully diluted (April 2004)
@ $.17/share Cdn x .73 US/Cdn = $.12 US
$47 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!
* OTMN.PK (O.T. MINING) (I own shares)
email@example.com Jim Hess Tel: 514-935-2445
12.8 mil fully diluted (May 15, 2004)
$49 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
* FR.V FMJRF.PK (FIRST MAJESTIC) (I own shares)
27.8 mil shares fully diluted March, 2004
@ $1.82/share Cdn x .73 US/Cdn = $1.33
$37 mil MC
Up to 80% ownership of the Niko project.
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. Producing 1.8 mil oz. of silver per year.
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
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
47.4 mil shares fully diluted (April 2004)
@ $1.15/share Cdn x .73 US/Cdn = $.84 US
$40 mil MC
$2.8 million cash (April 2004)
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.
$40 mil MC / 200 mil oz. = $.20/oz.
$40 mil MC / 1000 mil oz. = $.035/oz.
The inverse: you “might” get 29 – 146 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
MAG.V MSLRF.PK (MAG SILVER)
28 mil fully diluted shares (Nov. 19, 2003)
@ $1.36/share Cdn x .73 US/Cdn = US $.99
$28 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
51 mil fully diluted (April, 2004)
@ $.85/share Cdn x .73 US/Cdn = .62 US
$32 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)
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.
ECU.V ECUXF.PK (ECU SILVER MINI)
firstname.lastname@example.org (819) 797-1210
103.3 mil fully diluted shares = (6 January 2003)
@ $.375/share Cdn x .73 US/Cdn = $.27
$28 mil MC
The shares of ECU.V recently stopped trading recently. 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
A new resource calculation is expected soon.
ECU.V is also exploring other gold properties.
Additional comments: ECU Silver Mining Private Placement
–April 15th for 2-5 mil units of a share and a warrant at .28 and .37.
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
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
@ $1.55/share Cdn x .72 US/Cdn = $1.13
$26 mil MC
Located in China
2 gold projects and 1 silver (42% owned). Explorer
MAI.V MNEAF.OB (MINERA ANDES)
email@example.com (604) 689-7017 Art Johnson
90 mil shares fully diluted (April, 2004)
@ $.42/share Cdn x .73 US/Cdn = $.31 US
$28 mil MC
Raised $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: 16.7 mil oz “silver equiv”
15 mil oz. silver + 1.7 mil oz. “silver equiv” of 170,000 oz. of gold.
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.
$28 mil MC
Additional comments: Minera Andes plans to “fast track” to production. Expecting $.17-$.18/share Cdn earnings/year, as of April, 2004
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.
PXI.V PNXPF.PK (Planet Exploration Inc.)
30.8 mil shares fully diluted (Jan. 2004)
@ .81/share Cdn x .73 US/Cdn = $.59
$18 mil MC
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.”
$18 mil MC / 60 mil = $.29/oz.
Exploration potential: 19 oz. of silver per oz of silver’s worth of stock.
* 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) not including recent financing, which still needs approval by the exchange, and when added, will increase the market cap by about $10-11 million or so?
@ $.90/share Cdn x .73 US/Cdn = $.66
$12 mil MC
Additional Comments: Mineral Property Acquisitions Near Sudbury, Ontario, Exploration Update & $7.187 million private placements closed.
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 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, drilling companies are now in extremely high demand. Many explorers are saying they are having difficulty finding any drillers available!
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
QTA.V QURAF.PK (QUATERRA RES)
Jay Oness Toll Free: 1-888-456-1112
60.6 mil shares fully diluted
@ $.45/share Cdn x .73 US/Cdn = $.33 US
$20 mil MC
Additional Comments: three main properties in North America.
The main exploration project is the Nieves, near the massive Fresnillo silver mine, owned by Penoles.
QTA.V is a Sister Company to Western Silver, WTZ above.
See also Bravo Venture, BVG.V, another sister company, with 34.5 mil fully diluted shares (April, 2004)
* EDR.V EDRGF.PK (ENDEAVOUR GOLD) (I own shares)
Hugh Clarke, Investor Relations 1-877-685-9775
23.7 mil shares fully diluted (April, 2004)
@ $1.28/share Cdn x .73 US/Cdn = $.93
$22 mil MC
–currently producing 600,000 oz. silver/yr.
–expect to increase production to 4,000,000 oz. silver/yr
Endeavour Raises CA $9.9 Million in Private Placement Financings Thu, Apr 22
I own shares of EDR.V
BZA.V ABZGF.PK (AMER BONANZA)
119 mil shares fully diluted Sept, 2003
@ $.21/share Cdn x .72 US/Cdn = $.15
$18 mil MC
American Bonanza Acquires High Grade Silver Property in Nevada & Goldcorp Exercises Warrants
DNI.V DMNKF.PK (DUMONT NICKEL)
email@example.com (416) 595-1195
60 mil shares outstanding (April 15, 2004) does not include options and warrants.
@ $.29/share Cdn x .73 US/Cdn = $.21
$12.7 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 companies?”.
EXN.V EXLLF.PK (EXCELLON RSCS)
87 mil shares fully diluted (Jan 9, 2004 press release)
@ $.175/share Cdn x .73 US/Cdn = $.13 US
$11 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%)
$11 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
@ $.43/share Cdn x .73 US/Cdn = $.31 US
$12 mil MC
–About 6 properties in Peru
NJMC.OB (NEW JERSEY MIN)
Fred or Grant Brackebusch firstname.lastname@example.org
23.9 fully diluted Apr, ’04
@ $.53/share US
$13 mil MC
New Jersey Mining Company (NJMC) is engaged in exploring for and developing gold, silver and base metal ore reserves in the Coeur d’Alene Mining District of northern Idaho also known as the Silver Valley – one of the world’s richest silver districts.
CMA.V CRMXF.OB (Cream Minerals Ltd)
34.8 mil shares fully diluted (March 31, 2004)
@ $.425/share Cdn x .73 Cdn/US = $.31 US
$11 mil MC
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.
$11 mil MC / 360 mil oz. = $.029/oz. (exploration potential) –not a “resource”!!!
You may get 194 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)
@ $.21/share Cdn x .73 US/Cdn = $.15 US
5 year high .30
$11 mil MC
This company has many silver and gold properties. Dennis Fong is also involved with GNG.V, Golden Goliath.
Klondike has one silver property that could be producing within weeks.
(I own shares of KG.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)
@ $.35/share Cdn x .73 US/Cdn = $.355
$12 mil MC
NBG.V NBULF.PK (NEW BULLET GP)
50 mil shares fully diluted (including 15 mil new PP)
@ $.25/share Cdn x .73 US/Cdn = $.18 US
$9 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.
$9 mil MC / 75 mil oz. = .11 oz.
$9 mil MC / 210 mil oz. = .04 oz.
Exploration potential = 54 – 150 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)
@ $.16/share Cdn x .73 US/Cdn = $.12
$10 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.
$10 mil MC / 45 mil oz. =
$10 mil MC /150 mil oz. =
ATN.TO ATNAF.PK (Atna Resources Ltd.)
37.1 mil shares fully diluted (Spring, 2004)
@ $.305/share Cdn x .73 US/Cdn = $.22
8.3 mil MC
The company holds a diverse portfolio of gold, silver, zinc and copper properties in the United States, Canada, Mexico, and Chile.
(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%).
CHMN.PK (CHESTER MINING)
Bill Hoyt, 785-383-9246
” 2.3 million shares outstanding, positive working capital and no debt “
@ $2.25/share US
$5 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.
EPZ.V ESPZF.PK (ESPERANZA SILVR)
20 million shares fully diluted
@ $.57/share Cdn x .73 US/Cdn = US $.42
$8 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
@ $.30/share Cdn x .73 US/Cdn = $.22
$7 mil MC
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.
GPR.V GPRLF.PK (GREAT PANTHER RES)
Robert Archer, President, & Kaare Foy CFO: 604 608 1766
25.4 mil shares fully diluted April 23, 2004
@ $.51/share Cdn x .73 US/Cdn = $.37
$9 mil MC
MMG.V MMEEF.PK (MCMILLAN GOLD)
25.6 mil shares outstanding (3q 2003 report June, 2003)
@ $.35/share Cdn x .73 US/Cdn = $.26
$7 mil MC
SHSH.PK (SHOSHONE SILVER)
Bill Hoyt, 785-383-9246
12 mil shares
@ $.51 US
$6 mil MC
In Cour d’Alene, near CDE, HL, & SRLM.PK
* KRE.V KREKF.PK (KENRICH ESKAY) (I own shares)
Toll-free 1-888-805-3940 or (604) 682-0557
16 mil shares outstanding. Use “fully diluted” to be safe.
@ $.48/share Cdn x .73 US/Cdn = .35
$5.6 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 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)
@ $.53/share Cdn x .73 US/Cdn = $.39
$7 mil MC
PCM.V PAOCF.PK (PAC COMOX RES)
66 mil fully diluted Jan, 2004 (From Dec 11, 2003 press release and 2002 report)
@ $.08/share Cdn x .73 US/Cdn = $.06
$3.8 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)
@ $.15/share Cdn x .73 US/Cdn = $.11 US
$4.2 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
@ $.23/share Cdn x .73 US/Cdn = $.17 US
$3.2 mil MC
Bonanza grade “grab samples” in southern Argentina near IMA.
32 oz./T gold and 22 oz./T silver grab samples.
* 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)
@ $.135/share Cdn x .73 US/Cdn = $.10 US
$4 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
@ $.72/share Cdn x .73 US/Cdn = $.53
$3.1 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)
@ $.24/share Cdn x .73 US/Cdn = $.17
$3.6 mil MC
April 20, 2004, Vancouver, BC — 2004 Exploration Planned For Konkin Silver Property; Additonal Claims Acquired.
“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
$2.7 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
@ $.25/share Cdn x .73 US/Cdn = $.18
$3 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)
@ $.26/share Cdn x .73 US/Cdn = $.19
$2.7 mil MC
MTB.V (Mountain Boy Minerals Ltd)
TEL: (250) 636-9283
11.6 mil shares fully diluted (Dec 1 2003)
@ $.20/share Cdn x .73 US/Cdn = $.146
$1.7 mil MC
high grade samples: 3640 g/T Ag to 45.5 g/T Ag
LSM.V LASCF.PK (Langis Silver & Cobalt Mining Co Ltd)
no website Patrick Sheridan Jr. President and Secretary-Treasurer Phone: (416) 628-5936
Langis has 11,565,890 issued and outstanding common shares. (not fully diluted)
@ $.22/share Cdn x .73 US/Cdn = $.16
$1.8 mil MC
CBP.V CPBMF.PK (CONS PAC BAY MIN)
Guilford Brett, IR (604) 682-2421
9.2 mil shares outstanding
@ $.115/share Cdn x .73 US/Cdn = $.08
$.77 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)
* PDO.V (PORTAL DE ORO RS) (I own shares)
Portal Resources Enlarges Arroyo Verde Project, Argentina – CCNMatthews
Grand Central Silver Mines Inc (GSLM.PK)
Malachite Resources MAR.AX
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
Coeur d’ Alene, Idaho
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.
Silver Butte Mining SIBM.OB
(mine abandoned in 1996, copper/zinc waste water?)
Here are a few more stocks to look up. I don’t even know if some of these are silver miners.
Lfex – Lucky Friday Extention
Kcpm – King of pine creek
Vins – vindicator silver,
Silver Valley Resources
Royal Silver Mines (RSMI)
Bunker Hill ?
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
Many people have told me that they don’t get information this good even when they sign up for annual newsletter subscriptions from others that cost from $100 – $300.
The beauty of the internet is that it is helping knowledge to increase, and it is a form of communication that those who commit crimes of monetary fraud upon us cannot control. Please make the most of it, and please forward this on to others.
The Silver Stock Report
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 17 silver stocks: CMA.V, PLE.V, 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 require a disclosure regarding finder’s fees. Nevertheless, I have begun to receive “finder’s fees” from a few companies.