Silver Stock Report #41 - RevealingFraud.com

Silver Stocks–Comparative Valuations
Weekly Report # 41

by Jason Hommel
The Silver Stock Report
FRIDAY, July 2nd, 2004

This week’s report lists 111 silver stocks. There are 31 silver stocks that list reserves, resources (and exploration potential.) which I calculate by using my “ounce in the ground” forumula. There are 51 explorers. There are about 30 additional “silver” stocks with incomplete information. Additions & Changes from last week are in bold.

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To read about my religious bias, see my other website, bibleprophesy.org There are two essays near the top of the page that explain why I believe the entire world will return to using gold and silver as money again before the end times. Hint, see Ezekiel 38. To read more about my religious bias when it comes to investing, see my essay, Biblical Guidelines for Managing your Money

Kitco reports silver at $5.99/oz. as of Friday, 4:05 PM West Coast US, which was used to calculate the following figures. The CAN $ / US $ conversion factor is .7553. I will use .76 for ease. This is a rather big shift as the Canadian dollar strengthened against the U.S. dollar; last week it was .74. Personally, for the Canadian silver miners, I think such moves are not very important, except for warrant prices denominated in Canadian dollars. After all, I look at the value of the stocks in terms of silver, not U.S. dollars, and not Cdn dollars. Furthermore, many Canadian companies have their properties in Mexico or outside of Canada.

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”)

Company names in bold have summaries below with updated information.

ABX (BARRICK) 0.96 even –infamous hedger (16? mil oz. gold hedged, 3 yrs production)
CDE (COEUR D’ALENE) 1.2 down –(also gold) in debt, produces at a loss.
IPOAF.PK (INDUSTL PENOLES) 1.7 up –current producer, mostly family owned, hedged?
SIL (APEX SILVER) 3.3 up –zinc bonus, low grades, cash rich–$345 million! in debt
GRS GAM.TO (GAMMON LAKE) 3.4 down –current producer, owns 26% of Mexgold
FSR.TO FSLVF.PK (FIRST SILVER) 4.3 even –current producer, (not profitable ’03 3rd q.) unhedged
PAAS (PAN AMERICAN SILVER) 4.8 up –current producer, debt free
MFN MFL.TO (MINEFINDERS) 4.5 up –significant gold bonus, $35 mil cash on hand.
KBR.TO KBRRF.PK (KIMBER RSCS) 5.2 up One property, high grades, with exploration potential.
WTZ WTC.TO (WESTERN SILVER) 5.6 up — (19 EXPT) large mine development cost. copper & zinc bonus
CFTN.PK (CLIFTON MINING) 5.4 up — (127 EXPT) (colloidal silver patent bonus)
SSRI SSO.V (SILVER STD RSC) 7.1 up –large company, many properties, owns silver bullion
* TM.V TUMIF.OB (TUMI RSCS) 7.8 up — (16 EXPT) recent bonanza grade silver discovery
CZN.TO CZICF.PK (CDN ZINC) 8.9 up –large zinc bonus, high grades, low start up costs, great EXPT
ORM.V OREXF.PK (OREMEX RES) 9.4 up (40 EXPT)
SHSH.PK (SHOSHONE SILVER) 9.8 down near SRLM.PK, CDE, HL.
IMR.V IMXPF.OB (IMA EXPL) 12.8 down (51 EXPT) –Explorer in Argentina
FAN.TO FRLLF.PK (FARALLON RSCS) 13.3 up –(23 EXPT) low grades, silver 1/3; also gold & zinc bonus.
SRLM.PK (STERLING MINING) 13.9 down –(33 EXPT) acquired the Sunshine in Cour d’Alene
CHD.V CHDSF.PK (CHARIOT RSCS) 16.8 down (explorer, with inferred resources)
GGC.V GGCRF.PK (GENCO RESOURCES) 17.1 up –producer in Mex. Plans to expand and acquire
* SVL.V STVZF.PK (SILVERCREST MINES) 17.2 up –(50+ EXPT) –(Silver in Honduras, Latin America)
RDV.TO RDFVF.PK (REDCORP VENTURE) 17.4 up –60% gold bonus
ADB.V ADBRF.PK (ADMIRAL BAY RSCS) 20.1 up –exploring a silver property in Mex. (Huge gas bonus)
* PLE.V (PLEXMAR RES INC) 27.1 down (just acquired 2 new projects)
EXR.V EXPTF.PK (EXPATRIATE RECS) 29.4 down –significant zinc bonus 60% zinc, 25% silver (got out Atna)
* MGN (MINES MGMT) 29.7 up –60% copper bonus (low grades), start up cost ~ $250 mil
HDA.V (HUSIF?) (HULDRA SILVER) 29.5 up –very tiny, zinc bonus, low start up costs.
ABI.V ABMBF.PK (ABCOURT MINES) 33 down –large zinc & small gold bonus
* ASM.V ASGMF.PK (AVINO SILV GOLD) 39.5 up –will own 49%-100% of the Avino +4 other silver props.
UNCN.OB (UNICO INC) 54 up –lease on largest property, needs $1 mil by Sept 1 2004.

* = I own shares

Explorers (by market cap, in millions):

HL (HECLA MINING CO) .45 –A PRODUCER (gold bonus) cash rich.
MGR.V MGRSF.PK (MEXGOLD RSCS) 9 — bonanza grade discovery on Jan 13th, 2004
CDU.V CUEAF.PK (CARDERO RSCS)
AOT.V ASOLF.PK (ASCOT RSCS) — owns percentage of Cardero, CDU.V
SPM.V SMNPF.PK (SCORPIO MINING)
* FCO.TO FCACF.PK (FORMATION CAPTL) Cobolt (and Sunshine silver refinery)
* OTMN.PK (O.T. MINING) very large exploration potential
* 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
MCAJF.PK (MACMIN LTD)
* FR.V FMJRF.PK (FIRST MAJESTIC) — Bought a former silver producer. Acquiring silver properties.
IAU.V ITDXF.PK (INTREPID MINRLS) 7 “exploration potential”
* NPG.V NVPGF.PK (NEVADA PAC GOLD) 26-130 “exploration potential” (owns 1 silver property, 10 gold properties)
MAI.V MNEAF.OB (MINERA ANDES) (gold bonus)
MAG.V MSLRF.PK (MAG SILVER)
ECU.V ECUXF.PK (ECU SILVER MINI) –50% gold bonus
CAUCF.PK (CALEDON 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)
* CBE.V CBEFF.PK (CABO MINING) –Historic Silver and Cobalt district
QTA.V QURAF.PK (QUATERRA RES)
EPZ.V ESPZF.PK (ESPERANZA SILVR)
NJMC.OB (NEW JERSEY MIN)
PXI.V PNXPF.PK (Planet Exploration Inc.)
BCM.V BCEKF.PK (BEAR CRK MINING)
DNI.V DMNKF.PK (DUMONT NICKEL) exploring Clifton’s property
EXN.V EXLLF.PK (EXCELLON RSCS)
* KG.V KDKGF.PK (KLONDIKE GOLD)
SML.V SMLZF.PK (STEALTH MNRLS)
APM.V (Amerix Precious Metals Corp)(NEW BULLET GP)
SDR.V SDURF.PK (STROUD RSCS)
SRY.V (STINGRAY RSCS)
* CMA.V CRMXF.OB (CREAM MINERALS) 217 “exploration potential” (low grades)
CHMN.PK (CHESTER MINING)
GNG.V GGTHF.PK (GOLDEN GOLIATH) –Historic silver district in Mexico
GPR.V GPRLF.PK (GREAT PANTHER)
* KRE.V KREKF.PK (KENRICH ESKAY)
MMG.V MMEEF.PK (MCMILLAN GOLD)
EGD.V EGDMF.PK (ENERGOLD MINING)
LEG.V LEGCF.PK (LATEEGRA RSCS)
* AUN.V AUNFF.PK (AURCANA CORP)
TUO.V TEUTF.PK (TEUTON RES)
TBLC.PK (TIMBERLINE RES)
PCM.V PAOCF.PK (PAC COMOX RES)
BGS.V BLDGF.PK (BALLAD GLD SLVR)
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.
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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/

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See my June 18,2004 article:
I’m insanely bullish on silver.

WEEKLY COMMENTARY (All new in this section):

When I attended the Vancouver gold show, I was interviewed on the radio by the Korelin Economics Report. See http://www.kereport.com/recent.htm

Jason Hommel has been a competitive skier, psychology major, religious commentator and internet entrepreneur, and these varied disciplines have shaped his theories on investment and speculation in the resource sector. Jason’s web site is www.silverstockreport.com, but lately he believes silver is a better place to be. Hear more in Segment 4.

Segment 4 is an mp3 file, and 2.5 megs to download. It’s about an 8 minute segment–my first time on the radio talking about silver.
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Will the penny be the big catalyst that will finally wake up the public, and drive silver prices upwards? Maybe.

It will soon cost more than a penny to make a penny–again. Last time this happened, they started making zinc pennies, since zinc was cheaper than copper. That was in 1982. And they have already debased the penny as far as they can, now it’s 95% zinc. What is cheaper than zinc? Lead? But lead is only slightly cheaper, and much heavier, and poisonous, and that would not work. This may be it, we could reach a breaking point here. Surveys show that the public hates the idea of giving up the penny, and if we do, it’s proof that inflation has run it’s course, and gone as far as it can go.

Cost of production for the penny:

FY1999: .00835 or $8.35 per thousand pennies (production and distribution)
FY2000: .00821 or $8.21 per thousand pennies (production and distribution)
FY2001: .00800 or $8.00 per thousand pennies (production and distribution)
FY2002: .0089 or $8.90 per thousand pennies (production and distribution)
FY2003: .00986 or $9.86 per thousand pennies (production and distribution)

$10.00, of course, is the break even point for producing 1000 pennies.

Note 5, page 9: http://www.usmint.gov/downloads/about/annual_report/2003AnnualReport.pdf

Is it time to start hoarding pennies, especially the older, copper ones dated 1981 or earlier? Well, is the copper alone worth it? What percentage of that cost of a penny is due to the metal, and due to the minting costs? Here’s how you know: Copper and Zinc prices. See metalprices.com. Copper is $1.24/pound and zinc is $.44/pound. The new pennies are 95% zinc. I don’t know how many copper pennies it takes to make a pound (it surely must be less than the zinc pennies, which are lighter), but if it’s less than 124 of them, then there’s profit in there. But is it worth your time to sort them? Most likely, no, not yet.

What will the public do when they take away the penny? Literally, they will have stolen every last penny through their inflation! Will people wake up, and start hoarding silver? I think they will. And time will tell.

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Many readers want to know about China’s silver, since China has been a recent seller of silver. Charles Savoie has done some good research that indicates that China may be out of silver to sell, and may turn buyer, if they have not already done so. PAAS notes, “the likelihood of lower Chinese silver stockpile sales, and perhaps their exhaustion, after more than 300 million ounces of sales from 1999 to date.” There is also the rumor that China has bought a substantial amount of silver for delivery in 2005.

CHINA’S EMPTY SILVER VAULT
Copyright JULY 2004 Charles Savoie
http://www.silver-investor.com/cs_july04.htm

I have written on China months ago in my article:
The U.S. Trade Advantage With China – 17 December 2003
In sum, I stated that it did not make sense for China to work for us, producing our goods, at slave labor wages, while at the same time, sending us silver. This means they work for us, and pay us, at the same time!

A very important point to realize is that China is industrializing, inevitably, inexorably, rapidly. Industrialized nations, such as the U.S. consume 6/10ths of an ounce of silver per person. This is the rate today, and was also the rate at the end of World War II. If China rises to consume only half as much silver per person, it would be an enormous, insatiable demand.   Population of China: about 1.3 billion. 1/3 of an ounce per person would be 430 million ounces. The entire world only produces just over 500 million ounces of silver per year.
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Overvalued housing, bonds, and stocks.
by Jason Hommel

Housing, bonds, and stocks, in general, are very overvalued.

Home ownership levels are at all time highs, and the public, always buys at the top, when values are at the highest. Mass buying by the public creates a top. Home prices are boosted by the availability of cheap money due to low interest rates, and easy-to-qualify Federal loans from Freddie Mac and Fannie May. The easy money from the cheap loans creates extra buying pressure. Whenever there is extra buying pressure, prices will rise higher. Whenever most buyers are using borrowed money to buy things, it creates overvalued prices.

Overvalued home prices are clearly seen in the boom and high value of home building stocks.   If home prices are too high, it will be very profitable to build homes, and it is. Further evidence is seen as reckless speculators buy unoccupied houses, with the sole intention of selling them at higher prices.

Here’s further proof that when people spend borrowed money, it creates over-valued assets. Remember the stock market of 1929? It crashed, creating the great depression. Why? Because the Federal Reserve, which was created in 1914, had created a bunch of new paper money during the “roaring 20’s”. People borrowed this money, and bought stocks, on margin. In other words, they were using borrowed money to buy stocks. Therefore, stocks became overvalued.

Today, almost everyone uses borrowed money to buy a home. That is the standard, and it is creating the bubble in real estate that must, therefore, collapse. Don’t fool yourself into thinking you are “safe” if you own your home debt free. Would you want to own stocks in 1929, just before the crash? No.

Housing and the bond markets are related. Bond values move inversely to the interest rates. Literally, the bond market creates interest rates. When interest rates are low, bond values are high. When interest rates are high, bonds are cheap. The time to sell bonds is when interest rates are low, and the value of bonds is high, like today. What is the value of the bond market, and what will bondholders buy instead? Bonds are the alternative to gold and silver. They say that “bonds are the safest lowest risk investment,” but this is not true. Today, bonds pay 1-5% in interest, which is lower than the inflation rate, so you are losing money holding them. Furthermore, bond values can go to zero value in two ways: either through hyperinflation or default. In contrast, gold and silver cannot ever go to zero value. In truth, gold and silver are the safest, lowest risk investments, not bonds.

The U.S. bond market is $20 trillion. But all the gold ever mined in the history of the world is a mere $1.9 trillion at $400/oz., and the remaining identifiable silver supplies of 200-600 million ounces, at $6/oz. is a mere $1.2 to $3.6 billion, not trillion.
The bond market is propped up higher than it would be for several reasons. First, other nations are accumulating U.S. bonds. Will that continue, or will they ever want something real in trade for their goods? Second, the Federal Reserve is buying bonds in the open market to keep interest rates low. The Fed activity is uneconomic, and unsustainable, due to the deficit.

The U.S. government has a $700 billion annual deficit, and that number likely excludes the interest on the debt, which, since the days of Clinton, has been excluded from the numbers. So, the actual deficit may be much higher. How can this be financed unless the Fed SELLS bonds? Yet, the Fed is buying bonds to prop up the bond market! When it comes time for the Feds to reverse course, and sell this $700 billion in bonds to the public, the bond market must collapse, as interest rates rise.
The only alternative for the Fed is to not sell bonds, in which case, the Fed will basically be “monitizing” the debt, which is extremely inflationary. And this has been taking place, as can be seen due to the fact that many basic commodities, such as oil and steel are up several hundred percent in the last few years.

As bonds collapse in price, and as interest rates rise (when the Fed reverses course from buying bonds to selling bonds), bondholders will be forced to try and sell their bonds before the Fed sells their bonds. Bondholders will need to lock in profits and protect themselves from the loss of value of their $20 trillion worth of bonds. Their only viable alternative is gold and silver.

As interest rates rise, it will be much more expensive to make home payments for all who have adjustable rate mortgages. Many of these homes will be foreclosed, and as banks repossess these home and sell them, this will add supply to the housing market. (Foreclosures are already at a 40 year high.) At the same time, new home loans will be much more expensive, due to the higher interest rates, and thus, there will be fewer buyers who qualify for loans, and demand will go down. As home supply goes up, and as demand for homes go down, there will be a severe collapse in housing prices.

As interest rates rise, it will cause the bankruptcy of many major companies in corporate America.  Ford Motor Company, for example, has $180 billion in debt to either pay off, or refinance. How will Ford be able to sell bonds when the Federal Reserve begins to sell $700 billion in bonds after artificially boosting bond values by buying bonds? Ford Motor company has a profit of a billion dollars per year. If interest rates rise by a mere 1%, it will cost Ford another $1.8 billion, and unless Ford can borrow more money, they will be, effectively, bankrupt.

As companies like Ford Motor Company and GM go bankrupt, their stock prices will, of course, collapse to zero just like Enron. In addition, the bondholders who own Ford’s bonds will become the new stockholders of Ford. The $180 billion in bonds will likely turn into perhaps $30 billion of a reorganized Market Cap of Ford. Thus after bankruptcy, stockholders will lose everything, and Ford’s bondholders will lose perhaps 83%.

Stocks are overvalued because price to earnings ratios are outrageously high, and many companies are in debt beyond hope. When stock markets collapse, the P/E ratios return to the low 6’s and 7’s. Since P/E ratios are around 20, this means stocks, in general, will collapse by about 2/3’s, or expressed in another way, will lose at least around 66% of their value today–and that’s if they can maintain current profits in the midst of a currency collapse and depression.

If the currency collapses completely, it will create another gold and silver rush, as people would abandon their mortgaged homes to look for gold in the hills. If that happens, imagine how cheap housing would be, and how many homes you could buy if you were smart, and invested in silver or gold now, while they are cheap. Make no mistake: housing prices are very dependant upon the survival of the fraud of the dollar.

Further, consider taxes. Many people who own homes, have decided to own them for the tax advantage. The interest is deductable against your income, which reduces the income tax. But there are two other very important tax considerations that I would like to bring to your attention.

First, there is a property tax levied by the state. You do not really own your home if you must pay a property tax. If you don’t, or can’t, pay the property tax, they will put a lien on your house, and even auction your house off to pay the tax. If the currency collapses, and home values collapse, and when state governments get into serious trouble, they will levy a property tax in the form of gold and silver. Thus, if you do not have gold or silver to pay the property tax, you may lose all of your real estate holdings, even if you own them outright and have paid off the mortgages! So, even if you own your home outright, and it’s paid in full, your asset is not safe.   It might first lose 90% of it’s value, and then, you might lose it entirely if you can’t pay taxes if you have no gold or silver.

Second, consider the tax advantage of owning gold and silver. Officially, there are capital gains taxes on every asset you own that rises in price, and then sell. Unofficially, there is no way to track when and at what price you paid for silver when you acquired it. Therefore, realistically, there is no capital gains tax when you sell silver or gold after they appreciate. And if they pass any ridiculous law to try and tax gains on the sale of gold and silver, that will only cause less selling of gold and silver, which will, in turn, make them more valuable, and less likely to be used in trade. The only way for society to emerge from a currency collapse is to pass laws designed to attract and encourage the trade of gold and silver. So laws that tax captial gains on the sale of gold and silver should not be feared.

Anyone owning stocks, bonds, or housing needs to seriously consider diversifying into an asset class that is not overvalued, cannot go to zero, and that will move up in value. That’s gold and silver.

Most people also really need to consider the entire concept of diversification. Personally, I don’t put more than 10% of my portfolio into any one thing. Yet for many people, housing is their entire investment. This is so risky that you should not do it unless you really know, from a lot of study, that you are buying something that is vastly undervalued. I’m so bullish on silver that I can recommend that people invest 100% of their assets into silver bullion and silver stocks. I have. But if you are not so aggressive, you should at least diversify, say, 50%, into silver and silver stocks. So, if you have $100,000 in home equity, and no other investments, you should at least have $100,000 worth of silver bullion.

Unfortunately, perhaps one investor in 1000 owns any substantial holdings of silver bullion, which proves it’s such a great price.
Gold has been moving up in value from $255/oz in 1999-2001 to $400/oz. today, and remains seriously undervalued. Gold is less than half the price it was in 1980, and since 1980, M3, the best measure of money supply, the money in U.S. banks, has exploded upwards five times from $1.8 trillion to $9.1 trillion. Thus, the inflation adjusted price of gold in 1980, of $850/oz. is really $4250 per ounce, and I have no reason to think the gold price will stop there once the price begins to head there. If the money in the banks was truly backed by U.S. gold, the price would exceed $35,000/oz. or exceed $110,000/oz. if you include bonds with that.

Finally, consider carefully the needs of insurance companies who control trillions of dollars. They must invest in things that go up in value; therefore they are at severe risk if they invest in real estate, bonds, or stocks.

But before I discuss the needs of the insurance companies, let me discuss my bias. I pay for no insurance. I hate insurance, and the entire concept of insurance. To me, insurance is the process whereby risks are shared by all those who buy insurance policies, and therefore, insurance is socialism, and communism.   Insurance reflects a rejection of personal responsibility, and insurance replaces the role of the Church. Take, for example, life insurance. In theory, it’s there in case the breadwinner dies, and so the widow will be taken care of. But the role of the Church is to take care of widows–and only those over age 60. Therefore, life insurance usurps the role of the Church, or the family, in society. And consider car insurance. The purpose is to remove the risks of accidents. Therefore, people will tend to drive more recklessly. If people knew they had to pay for all damages they caused, they would be more responsible with their own actions. Mandadory car insurance is simply communism, there’s no other way to put it. Consider health insurance. If you have it, you care less about your health, because you have this “back up”. If you don’t have health insurance, you will take much more care of your own body, and you will want to exercise, eat right, and take vitamins and herbs as necessary.

About ten years ago, in my mid 20’s, I took a three day class to study the various terms of the life insurance industry, and I earned a license to sell insurance. The idea was to sell cheap term insurance as opposed to expensive whole life insurance (that has a bad savings plan attached), and to convince the customer to invest the difference. After I took the course, I was so disgusted with the entire insurance industry, I could not, in good conscience, sell any of it. As another aside, my father sold term life insurance by writing ad copy that went out in bulk mail. Therefore, I and my father know a lot about insurance. We both believe that although term insurance is better than “whole life”, all insurance is a scam, and let me reveal to you the scam. The insurance business will take your money, invest it, and thus, be able to earn more than enough money needed to pay off the insurance claims. They only sell it because they profit by doing so. If they fail to invest wisely, the company goes bankrupt. Regardless of whether the company has to declare bankruptcy, in the meantime, much money will be siphoned off of you by all the salesmen and company executives. Consider the slogan of Prudential. “Get a piece of the rock!” implying that they are “Solid as a rock,” and not in danger of insolvency or bankruptcy. In reality, it’s probably more like, “Solid as a derivative!”

As my father has often said, “There’s a reason that most of the big, tall, impressive skyscrapers in all major cities are owned by banks and insurance companies.”

There is also a reason why Warren Buffet, the world’s most successful investor, is heavily involved in the insurance business, such as Geico, the cheap car insurance with the talking Gecko as mascot. As a successful investor, Warren Buffet should be able to allow Geico to outperform their competitors. There is also a reason why banks, insurance companies, and brokerage houses were separated as businesses after the great depression. Think about it.

So, getting back to the insurance companies. They take your money, and they must invest it successfully, or die. That is their business. That is their need. Therefore, the insurance companies are literally forced to invest in market sectors that are proving they have profitable returns. Like it or not, believe it or not, we are in a bull market in gold that has lasted 3-5 years now, from 1999 or from 2001. No other market sector has had such great percentage gains in this time period. In 2003, silver stocks gained 314%! That’s unparalleled, and cannot be ignored, and is a foreshadow of a great movement upwards in the silver price. If the investment managers study the market fundamentals for gold and silver, to see why this has taken place, they will realize that these markets are still vastly undervalued, and they must invest in this sector to achieve the gains necessary to stay in business. This will lead to trillions of dollars moving into the very tiny precious metals markets, and will help to push prices way up from here.

Here is one business idea that I will throw out there for my readers. If someone were to start an insurance company today, and invest the money into the precious metals sector, specifically silver bullion and silver stocks, they would be able to charge much less than their competitors for the same amount of coverage. This, in turn, would help them get much greater market share, (with their low prices) and thus, they would end up being in charge of more and more money to invest. As they get more money to invest, they would be able to buy more and more silver, which, again, would push prices up.

Consider again the U.S. annual budged deficit. It’s $700 billion. How can the silver market be smaller than $1 billion at the same time? It’s insanity, and market madness. It’s not that I’m stupid and don’t “get it”, and neither are you. It’s that the markets are in severe imbalance, as the vast majority of Americans and humanity is in the pursuit of monetary fraud and madness. Literally, today, we are living in an economic dark age compared to how good things can get once the insanity is gone.

I believe that sanity will return, and that sanity will prevail, and that the fraud of the dollar, that has achieved over 99.99% market penetration, will lose market share. I’m betting that Americans will return to sanity, and that economic reality will return.

Ultimately, market dynamics will literally force the prices of precious metals to rise far greater than we can realize. Personally, I could start up an insurance company, or bank, and invest the proceeds in precious and ever-more-scarce silver, and do very well. I would not have to loan out the money or buy stock at all, but simply buy silver bullion. But morally, I’m against both banks and insurance. I hate the entire concept of insurance as it is practiced, and thus, I would never do it. The only forms of insurance that I accept are things like silver (insurance against the fraud), a safe (insurance against an attempted theft), a gun (more insurance against an attempted theft), and good planning. But realistically, I understand and know that other people in the world will not have my aversion to insurance, and I know that to stay in business and to get the most business, insurance companies will be forced to buy into gold and silver bullion and stocks. Therefore, be forewarned, and invest before they do, today.

About six months ago, I predicted that silver miners would start using silver as money. A few have begun to do so. Within the next six months, I predit that not only will many more silver miners do this, but soon, the insurance companies will start buying silver and gold bullion and stocks. Like the silver companies, it will start with some of the smallest insurance companies, and then, demand will grow from there as price performance will force others to join our party.

A lot of people think they will wait until after silver really begins to rise in price, and then they plan to buy silver. What these people do not realize is how hard it is to find silver bullion in bulk, even today. Please call your local coin dealer, and visit his shop. Ask him how much silver bullion he has available right now—not how much he can buy for you. They will always promise to be able to deliver the moon. But some dealers are now saying there is a one-month wait, or a 6-week wait, some even refusing orders, especially the big orders. Imagine if ten times as many investors decide to buy silver, so that not 1 in 1000 investors are buying silver like today, but 1 in 100. Will the wait for silver bullion extend to ten months, or 60 weeks? Or will the price rise substantially? Think about it.

And now, Doug Casey tells the story of the fundamentals of the silver market. And he tells it very well.

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In my June 18,2004 article, I’m insanely bullish on silver, I concluded by listing a few newsletter writers who have turned bullish on silver. Bill Bonner, and Doug Casey among them. Well, this week, in Bill Bonner’s Daily Reckoning, I received Doug’s article below. It also appeared at gold-eagle.com, and it was also sent out by GATA. So, I’ve seen it three times now. And now, in case you have not seen it, it appears below:

Rodney DangerfieldDoug Casey
Wednesday, June 30, 2004

I have said it many times: Mining is an innately risky business. Worse, it’s an impossible business if metals’ prices are too low. In the case of silver, during the long bear market from 1980 to 2003, when silver traded mostly in the $3.50-$5 per ounce range, there were no major, public, pure silver mining companies that generated free cash flow. None.

The end result was that very few pure silver producers remained in business. With the exception of a smattering of mines in Mexico, Peru and very few other locations, it has simply been uneconomic to produce silver (other than as a by-product).

That is not to say that there haven’t been profitable silver mines, but very large mining companies, such as BHP Billiton, generally own these. These are not stocks you would buy strictly for the silver exposure, however, because silver is a minute portion of the overall value of the company.

Which points to one of the fundamental caveats about silver: namely that around 80% of new production is a byproduct of gold, copper, lead and zinc. So silver is produced almost regardless of its price. That makes primary production of silver even more volatile and risky than mining in general.

Of the primary silver producers (defined as companies in which at least 50% of their revenue is silver), the value of the silver they produce represents only about 3% of total supply brought to market. It’s a tiny sub-sector of mining.

But, understanding the risks, I think silver stocks could provide some of the best, if not the very best, contrarian returns in the years ahead. There are several reasons I say that, but the main one is the ongoing silver supply/demand equation.

At first glance, one of the more remarkable aspects about the silver bear market was that, beginning in 1990, it occurred against the backdrop of a supply deficit. In those years when the global economy could be considered in a positive light, annual silver deficits ran as high as 200 million ounces. When the economy was in recession, the silver shortfall still came in at 40-50 million ounces.

More recently, in 2002, a down year for the U.S. economy, mine production totaled 585.9 million ounces, while total demand hit 863 million ounces. So production has not kept up with demand for a very long time.

For a brief period back in 1997-98, it looked as if the supply/demand imbalance had finally caught the attention of the market when Warren Buffet purchased 129.7 million ounces. Prices moved all the way to the $7.50 level before institutional short sellers and forward selling by base metals producers beat the price back to the $4 range. Once again, silver could get no respect.

Despite the supply deficits, and overlooking the relatively short-lived rally that took it to $8.29 in early April, the price of silver has been remarkably stable in the $4 to $6 per ounce range. Why no sustained recovery?

Ignoring the conspiracy theories making the rounds, the primary reason for silver’s doldrums has to do with the drawdown of accumulated stockpiles. These stockpiles include old scrap and coin melt, as well as those held by various governments who used to think that backing a currency with something other than cheap talk was the right thing to do.

Speaking of cheap talk, in 1959, the U.S. Treasury held 2.06 billion ounces, the majority of which was sold in the 1960s in a futile attempt to keep the price at $1.29, where they’d arbitrarily fixed it. The balance was used in the minting of Silver Eagles coins from 1986 through 2002. As a consequence, except for a few bars forgotten in some dark corner, the U.S. stockpile is gone. As the government uses 12.5 million ounces a year in coinage, it is (or soon will be) a net buyer.

The largest remaining known government silver inventories are in India, which was reported to be holding around 87 million ounces as recently as 2002.

The largest unknown government inventory is likely held by China, whose currency was the last in the world to be backed by silver. In its usual inscrutable way, the Chinese government has not revealed the extent of its holdings, but we know that it has been a big seller over the past few years, almost certainly helping to keep a lid on the price. Last year, of a total of 82.6 million net ounces of silver that came onto the market through government sales, 35 million ounces came from China. That on top of over 50 million ounces they sold into the market the year prior. Some of the most credible silver observers believe that these sales cannot continue for long at the same pace before the Chinese stockpile, too, is depleted…which the fall-off in year-over-year sales may already be indicating.

I would add that the Chinese may very well decide it is better to hang on to what they have left in their stockpile, rather than continue to trade it for increasingly worthless dollars. We should have additional clarity on the Chinese stockpiles later this year once The Silver Institute releases its new comprehensive study on the topic. Regardless, the odds are good that we are nearing the end of the period where government silver sales are much of a factor.

Institutionally held inventories (Comex, CBT, etc), have likewise fallen dramatically. After reaching 245.8 million ounces in 1996, these inventories have dropped by 41.3% to 144.4 million in 2002.

All told, according to the CPM Group, global non-coin inventory is now in the area of 419 million ounces, with an additional estimated coin inventory of about 487.5 million ounces, but one shouldn’t put too much stock in these figures because much of the world’s silver is now stashed in the lock boxes, drawers, and closets of individual holders.

Speaking of individuals, as is often the case after a long bear market, sellers begin to dry up. Case in point, sales of silver by individual holders fell to 43.5 million ounces on a net basis in 2003, down from 81 million ounces in 2002…and well off the peak hit in 1997 when individuals dumped 221 million ounces back onto the market.

Jewelry demand, silver’s second largest use, was higher at 276.7 million ounces in 2003, compared to 265.9 million ounces in 2002, a rise of 4.06%. Driving growth is demand from Asia, including a 22% increase in jewelry demand from China and a 13% increase in Thailand. The fact remains that, while silver’s fundamentals are very much affected by industrial demand, it is still viewed as poor man’s gold by much of the world — an alternative to the colored toilet paper governments pass off as currency.

For some years now, silver bears have warned that the move to digital photography will dry up that important use of silver. In the long run, that may be true. Yet, the correlation with sales of digital cameras and available silver supplies is not a 1:1 ratio because photographic demand also influences silver supply. As much of the secondary scrap supply is refined from photographic film and chemicals, a decline in photographic demand also impacts secondary scrap supply.

According to the GFMS World Silver Survey 2004, photography, which accounts for the third-largest silver off-take, was down to 196.1 million ounces compared to 205.7 million ounces the year before. But even that relatively modest decline may not accurately reflect the trend because the Iraq war, fear of terrorism, and the SARS hysteria dramatically curtailed tourism and hence picture taking.

That same survey shows that a 2-year decline in global fabrication demand for silver ended in 2003, with demand increasing to 859.2 million ounces, 13.3 million ounces over 2002’s level.

Industrial usage, which is reflected in the fabrication figures, is the largest source of silver demand. It was up 2.87% to 351.2 million ounces. It is always worth noting that unlike gold, where virtually all the metal ever mined still exists, in the case of silver, most of that used in industry is consumed. I’m quite optimistic about silver industrial demand outpacing overall economic growth for the indefinite future simply because, of the 92 naturally occurring elements, it’s the best conductor of both heat and electricity, as well as the most reflective and the second-most ductile and malleable.

As a result, there are new industrial uses for silver consistently being developed, some with the potential to add significantly to demand, including uses as divergent as a catalyst in fuel cells for electric motor cars, high-temperature superconductor wires, and as an anti-microbial agent.

Unless the reported numbers are wildly askew, there’s no question silver is going much higher in price. And that’s not counting the possibility of a monetary, crisis-driven mania, like the mania that took silver to $50 in 1980. I have no reason to believe the numbers aren’t more or less accurate and plenty of reason to expect a mania.

This report originally appeared in the June 2004 edition of Doug Casey’s International Speculator, published by Casey Research, LLC. Reprinted with permission of Casey Research, LLC; 166 South Main St., Suite 2b; Stowe, VT 05672.For more information on the International Speculator, including how to subscribe, visit www.caseyresearch.com.

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I first met Doug Casey at the San Francisco Gold show in November of 2003. In June, in Vancouver, I again had the pleasure of spending a few minutes with Doug Casey. He said he was putting his money into silver stocks, and specifically, that he was looking into buying into private placements. I spoke with him about my list of silver stocks, and he asked me if I knew any good private placement opportunities. I shared with him the few I knew about, and I also told him that I have an email list just for this purpose, and so, he’s signed up to my list. I’ve also signed up to receive his letter.

If you are an Accredited or Sophisticated investor and want information I may find out about private placement opportunities in some of the very best silver stocks in my opinion, (This is not a solicitation for any stock, and I’m not brokering any securities) you can sign up to receive such a notice by adding yourself to my private placement list at http://www.silverstockreport.com

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Sometimes, people ask me, how do you invest in silver, don’t you need dollars to live? Sure, and here’s how I do it:

As I believe in silver, I attempt to maximize my exposure to silver, and thus, I hold my money in the form of silver bullion as much and as long as I can. I convert my money, when I earn it, to silver, and then, as I need cash for daily transactions with the world, about once a month or so, I must sell silver for paper money, as difficult and as emotionally painful as that may be. I sold a bag of silver today to tulving.com, as he had the highest published bid price available: $4170 for a bag while silver was at $5.99/oz. Meanwhile, tulving’s price for a silver bag was $4,361, Delivered. The spread, including shipping, was $191, or 4.6% on the $4170, which is a rather small spread. At 715 oz., I’ll get $5.83/oz., minus my cost to ship. Thanks tulving! At the same time, I will be receiving a payment in silver from some private placement referrals. So, I bought and sold silver in the same day! But I’m not a dealer!

I sold today, not because the price is anything in particular, but because my cash needs forced me to take action. As my available cash dips below a certain minumum amount, about 1-2 months worth, I must sell. This time, I was down to less than a month’s worth of cash. I did well. I suppose I could have sold earlier, when the price was $5.50 or $5.70, but I didn’t. I held as long as possible.

I’m sure some of my readers may say, “Ah, you should have sold to me, I would have paid more than tulving to get some silver below the dealer’s price.” Yes, but were you advertising a higher price? Could you have bought on the spot, at my timing and convenience? If so, please let me know. I’ll check your prices next time, and perhaps sell to you, and advertise your service here, in this report.

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Limited Time Special Offer!
Buy 1 Annual Subscription to Jason’s Monthly Top Picks and get ALL other articles FREE!

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.

To order: The Silver Stock Report

If you have any questions about billing or order fulfillment, you need to contact my support staff at support@silverstockreport.com 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.

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——————-
I will be speaking in Idaho at the Silver Summit in September 23-24
http://www.silverminers.org/summit/index.html

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I will be speaking in Toronto at the Cambridge Gold Show on October 3-4.
http://www.goldshow.ca/

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Several people wrote to Coast to Coast on my behalf, to help me get on the show. I have not yet heard from them.
http://www.coasttocoastam.com/info/guestrequest.html

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SAFES: Need a safe to store your silver? Steve Miele in Grass Valley at the Sports & Swap shop can deliver a safe anywhere in the U.S., and can have a safe custom built to your specifications, such as to hold silver bullion. Call Steve at (530) 272-4179. If you get a very large, refridgerator-sized, heavy safe, in excess of 1000 pounds, you have to have it delivered to a local loading dock or Freight dock, and then arrange delivery from there, which is a bit complex, because you may need to hire several people at such a freight dock to operate a fork lift. (Sorry, I had the phone number wrong last week.)

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

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. The following links contain email addresses for hundreds of different newspaper’s “letters to the editor”

http://www.awolbush.com/papers.htmlhttp://www.results.org/website/article.asp?id=428http://www.waronfreedom.org/activists/emleted.html

This final link 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, and many also want your full name, address and telephone number. 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

Dear Editor,

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.

Sincerely,

Jason Hommel
Grass Valley, USA
silverstockreport.com
(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.

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I wrote an article:
Miners to Use Silver as Cash – 27 November 2003
Apparantly, I was about 6 months too early in my predictions, but that’s ok, I’m a very long term thinker and investor. I did not miss the mark by too much time, and if you think in terms of decades, I was right on the mark.

There are several companies that are increasingly deciding to hold their cash in the form of silver bullion. These companies are:

SSRI SSO.V (SILVER STANDARD RSC)
SRLM.PK (STERLING MINING)
NPG.V NVPGF.PK (NEVADA PACIFIC GOLD)
EDR.V EDRGF.PK (ENDEAVOUR GOLD)

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The Silver Valley in Idaho is bringing back the use of silver as money. A silver one-ounce coin, a “Sterling” to be used as a $10 piece.
http://shoshonenewspress.com/index.asp?Sec=News&str=2869
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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://www.goldmoneybill.org/

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
603-233-5892

Harvey Wharfield
978-635-9586

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!

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There are two excellent annual silver surveys 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 reeport.

The survey by cpmgroup.com costs $150, 162 pages.
http://www.cpmgroup.com/SSpress2004.pdf –3 page press release.

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.
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In sum, we are running out of silver. The U.S. government had over 3 billion ounces of silver in 1940, and today, has very little left, or none.

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The Commodities Futures Trading Commission

The CFTC report on the allegations of manipulation in the silver market — 9 page report
The CFTC report confirmes much of the research above, and almost outlines the bullish case for silver!
–My comments on the CFTC report ar in ssilver stock report #34 & #35

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Silver consumption, per capita, in the U.S. is the same today, in 2004, as it was in 1945.

And what is the per capita consumption of silver in the U.S. today? 5500 tonnes x 32152 = 177 million ounces of silver used per 285 million people. 177 / 285 = .62 oz. silver consumed per year, per person, in the U.S., whether in 1945, or in 2004. Each person in the U.S. today, on average, uses 6 tenths of an ounce of silver.
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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

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WHERE and HOW to BUY SILVER BULLION

The Silver Stock Report

Silver Is Wealth

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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.

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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.

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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?

Doug’s third article is also excellent: Silver — the next big thing in the global markets? Answering A Few Silver Questions

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See the 600 year silver chart to see how undervalued silver really is:
http://goldinfo.net/silver600.html

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Look at the summary of the world silver survey by GFMS Limited on behalf of The Silver Institute :
http://www.gfms.co.uk/Publications%20Samples/WSS03-summary.pdf

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.

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The following is a “must read”: Ted Butler’s best ever explanation of how silver is manipulated lower than it should be.
http://www.investmentrarities.com/11-04-03.html

Over 3400 people have signed the silver petition to stop the manipulation at the COMEX:
http://www.PetitionOnline.com/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.
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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.

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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. Very 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, check the numbers and follow the links:

“The money chart”

   1,000,000,000,000: 1 Trillion dollars
     1,000,000,000: 1 Billion dollars
                1,000,000: 1 Million dollars
$45,153,000,000,000: U.S. Household wealth, as of first quarter, 2004. (Includes Real Estate, and investments)
$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 mined in all of history, 145,000 T @ $400/oz. http://tinyurl.com/vrcc
$300,000,000,000: Estimated silver mined in all of history: 30-40 million oz? @ $10/oz.
     $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. annual 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/equities (estimated?)
       $75,000,000,000: Money flowed into Equity funds in the first quarter, 2004
       $8,226,000,000: all the world’s “primary” silver stocks (80 of them on this list, as of June 25, 2004)
         $6,710,000,000: 671 mil oz. of “identifiable” silver bullion left in the entire world, according to GFMS @ $10/oz.
$650,000,000: 65 mil oz. of “registered” COMEX silver bullion @ $10/oz.  http://tinyurl.com/vrcw

Note, the “registered” silver at the COMEX approved wearhouses increased significantly this week, up from 44 million ounces to 65 million ounces. The combined total of eligible and registered remained the same, at just under 120 million ounces. I heard this shift was in response to a 21 million ounce delivery request.    The one taking delivery may just decide to keep their silver in the COMEX approved wearhouse, Brinks’ in this case, and they may also keep it in the registered category. So we may not see the number move down, unless the buyer removes the silver away from the exchange.   Who knows at what price that silver will be available for sale? The silver at COMEX may not all be available and for sale at today’s prices. The “available” silver may be far less than what is at COMEX.

There is a link, regarding delivery notices, here:  http://www.nymex.com/media/delivery.pdf
Interestingly, it says, “SO FAR FOR JULY”, Silver, 7273. Delivery of 7273 silver contracts is 36.4 million ounces of silver.

So, what do all those stastistics mean?

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

Gold is overvalued relative to silver, because at current prices, it takes 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 68 times more overvalued than silver.

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

Thus, if you multiply all those numbers, 258 x 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.

See http://www.sterlingmining.com/old.html
Excerpt:
“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:
http://www.bibleprophesy.org/SilverStockExtra.html

To track the 163 ticker symbols of the 100+ stocks on this list at yahoo: (Updated on April 2)
http://www.bibleprophesy.org/SilverStockExtra.html

To learn All about Canadian law, 43-101, about reserves and resources:
http://www.bcsc.bc.ca/Publications/mineral_projects_sept03.pdf

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 four companies, BHP, GMBXF.PK, KGHM and BVN produce a lot of silver, but are way too expensive to buy for the silver exposure for your portfolio.)

BHP Billiton Ltd (BHP)
http://www.bhpbilliton.com/
–‘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)
http://www.gmexico.com/indexi.html
651,646,640 shares (2002 annual report)
@ $4.00/share
$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
http://www.kghm.pl/en/index.php
–KGHM is the world`s sixth-largest coppper producer and second or third in silver.
1163 tonnes of silver produced in 2001.
1163 x 32152oz.tonne = 37.4 million ounces of silver produced in 2001
–Copper/Silver mine in Poland.
–Market capitalisation is about $$1.52 billion.

Compania de Minas Buenaventura SA (BVN)
http://www.buenaventura.com/
NYSE:BVN
– Peru´s largest publicly traded pprecious metals company
–produces over 10 mil oz of silver per year
–looks way too expensive for the silverr alone: 3.6 Billion market cap.
————– ————– ————–

ABX (Barrick)
http://www.barrick.com/
535 million shares outstanding 1 Q 2004
@ $20.00/share
$10,700 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 “unheedge”.
–reportedly, they plan to deliver 1/3 oof production to hedges, which means they will be hedge free in about 10 years.
–the size of the hedge, 1 Q, 2004: 14.7 mil oz. gold, at $400/oz., would be valued at $5.9 billion dollars.
–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: $850 million
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.”
$10,700 million Market Cap / 1710 mil oz. = $6.26/oz. silver
You may get “approx” .96 ounces in the ground for 1 oz. silver’s worth of stock, if the silver isn’t hedged.

Additional comments: Barrick earns $26 million in first quarter. x4 = $104 million, which gives a P/E ratio of 103. Ouch, that’s high. The hedge book loss was $10 million.

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.

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.

1 Q 2004 note on hedging silver, p. 33: “At March 31, 2004, we had fixed-price commitments to deliver 22.3 million ounces of silver over periods primarily of up to 10 years. We also had written silver call options on a notional 7 million ounces of silver with an average exercise price of $5.76 per ounce. These options expire at various dates in 2004 and 2005. The options are classified as non-hedge derivatives for accounting purposes.

Looks like they never closed out the silver hedge, like they said, but that they just bought options or futures that expired, or maybe were rolled over. I don’t know whether they still have paper contracts that offset their hedges. In fact, perhaps the dip in the silver price can be explained by the options that Barrick wrote on some silver?

I don’t really count Barrick as a silver company, but it’s listed here for comparison’s sake, and due to popular/continuous demand.

I expect silver bullion to continue to outperform ABX stock at these prices.

CDE (COEUR D’ALENE)
http://www.coeur.com
coeurir@coeur.com (208) 769-8155 or (800) 624-2824
214 mil shares outstanding (June 2004) not fully diluted
@ $4.27/share
$914 mil MC
“Current cash, cash equivalents and short-term investments stand at approximately $252.7 million at January 31, 2004, giving effect to recent $180 million offering of 1.25% Senior Convertible Notes due 2024, net of offering costs.”
“At the beginning of 2004, silver reserves totaled 175 million ounces and gold reserves 1.4 million ounces.”
175 + 14 = 189
(Produced 14.2 mil oz. silver in latest fiscal year (early 2004)
$914 mil MC / 189 mil oz = $4.83/oz.
You get “approx” 1.24 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments: CDE’s page on silver, “The Value of Silver” says nothing about silver as money. Unbelievable!

Wheaton recommends rejecting the CDE buy out offer:
Wheaton Does not Intend to Pursue the Coeur D’alene Mines Proposal: Recommends Shareholders Vote IAMGold Combination
Monday May 31
http://biz.yahoo.com/bw/040531/315071_1.html
Interestingly, as one reason, Wheaton says: CDE has a history of losses and negative operating cash flow.

Quarterly Loss Reduced From $31.2 Million a Year Ago to Just $3.0 Million in 2004’s First Quarter
As of May 5th, CDE announced: No silver or gold hedge positions in place.

For the full year 2003, the Company reported a net loss of $67.0 million, or $0.40 per share, compared to a net loss of $81.2 million, or $1.04 per share in 2002.

Why does CDE continue to mine and sell silver at a loss? Why has CDE borrowed $180 million to continue expanding this business plan? Why couldn’t CDE have raised the money from issuing more shares? Why has CDE stock increased from about 30 million shares outstanding at the end of 1999 to 214 million shares outstanding by the first quarter 2004? How was CDE able to secure such favorable terms for a loan? “giving effect to recent $180 million offering of 1.25% Senior Convertible Notes due 2024, net of offering costs.”” Who did CDE borrow money from? Who stants to gain if CDE continues to produce silver at a loss?

If CDE produced silver at a loss during the first quarter 2004, how much money will they make if silver hits $10/oz? Perhaps the break-even price for production is a constant $8.00/oz.? Regardless of their “cash cost” numbers. If so, and if CDE produces 15 million oz. of silver per year, then at $10/oz., CDE may make up to $30 million dollars, at the most, from their silver production, if none of their other costs like energy costs rise in price due to inflation. Mining uses a lot of energy, just so that you know, so I don’t think it is likely that CDE will have profits even with higher silver prices in the $8-10 range due to inflation. Given that CDE has a market cap of up to $1000 million dollars, CDE just is not worth it at all, in my opinion. And neither would CDE stock be worth the price if they had a market cap of $300 million, in my opinion. I would rather own silver, as it moved in price from $6 to $10. And in the meantime, CDE may well move in price from $6.49/share down to $2.16/share (assuming no further dilution, and a reduction to a more reasonable $333 million market cap), and by then, with silver at $10, CDE may have a P/E ratio of 10, and a huge heavy debt load of $180 million dollars that may take up to 6 years of possible profits to pay off.

At $2.16/share, $10 silver, and a P/E of 10: $333 mil MC / 189 mil oz. = $1.76/oz. = You’d get about 5.68 oz. of silver for each silver oz. worth of stock.

I expect silver bullion to continue to outperform CDE stock at these prices.

IPOAF.PK (INDUSTL PENOLES)
http://www.penoles.com.mx
397.5 mil shares outstanding (2002 annual, unchanged since 2001)
@ $3.65/share
$1451 mil MC
419 proven and probable reserves of silver (from 2002 annual report on website)
$1451 mil MC / 419 oz. silver = $3.46/oz.
You get “approx” 1.73 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. Produced 21.5 mil oz. silver 1 Q 2004

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)
http://www.apexsilver.com/
information@apexsilver.com (303) 839-5060
47.4 million shares outstanding (late May, 2004) (not fully diluted)
(derived from share price & market cap, late May, 2004)
@ $17.60/share
$834 mil MC
cash on hand: ~ $390 million March 2004
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
$834 mil MC / 454 mil oz = $1.84/oz.
You get “approx” 3.25 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments: Apex’s webpage on silver, “Commodity Fundamentals” says nothing about silver as money. Unbelievable and shameful! Unless you count this phrase, “As a precious metal, it has been a source of human adornment since the beginning of time.” At least they recognize that silver is a precious metal, and at least they recognize it has been precious since the beginning of time. That’s a start!

Bullishly, they note: “As a result of the silver inventory drawdown, by the end of 2002, the worldwide stockpile of refined silver has been reduced to levels sufficient to satisfy less than approximately six months of the existing demand.”

A positive article was written about Apex in BusinessWeek Online:
A Bright Gleam On Apex — Friday June 4

“Apex has rights in some 100 mineral-exploration holdings at 34 properties in countries such as Bolivia, El Salvador, Mexico, and Peru.”

The article’s analyst notes that in 2-3 years, when/if production comes online, “At silver’s current price of $6 an ounce, Apex could earn $2 to $3 a share, he figures. If silver runs up to $10, earnings could hit $6, he says.”

I note that this means that at a P/E of 10, if production comes online, Apex may more than tripple in 3 years to $60/share, while silver nearly doubles. That’s not much leverage, given the increased risks of mining and owning a public company, and given that management of Apex seems to not recognize that silver is money, and debt is aweful.

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%.

See my silver stock report #40 for reasons why Apex will not likely use their cash to buy silver bullion while they wait for higher silver prices.

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. For zinc prices, see http://www.metalprices.com

Apex is not mining now, but are waiting for higher silver prices. George Soros, Billionaire, owns a bit of this one, his group of funds owns over 14% I read recently. 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.

GRS GAM.TO (GAMMON LAKE)
http://www.gammonlake.com/
gammonl@sprint.ca (902) 468-0614
62 mil shares Fully Diluted: (Feb 27th, 2004)
@ $6.62/share
$410 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.
$410 mil MC / 231 mil oz.= $1.78/oz.
You get “approx” 3.37 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:
At 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.

GAMMON LAKE INTERSECTS 1-METRE OF 390 GRAMS PER TONNE GOLD AND 1,402 GRAMS PER TONNE SILVER (13.2 OUNCES PER TONNE GOLD-EQUIVALENT) June 10

FSR.TO FSLVF.PK (FIRST SILVER)
http://www.firstsilver.com/
info@firstsilver.com (604) 602-9973 or (888) 377-6676
38.6 mil shares fully diluted (March 2004)
@ $1.98/share Cdn x .76 US/Cdn = $1.50 US
$58 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.
$58 mil MC / 42 mil oz. = $1.38/oz.
You get “approx” 4.33 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).

1st Q, 2004, FSR.TO earned $1.45 million Cdn?, or 4 cents/share, ending a string of losses for the 6 quarters prior. Seems as if their break even cost to mine is $6.00/oz silver. Produced 565,332 oz. silver for the quarter, and 1288 oz. gold.

They are unhedged, and remain committed to remaining unhedged.

PAAS (PAN AMERICAN SILVER)
http://panamericansilver.com/
info@panamericansilver.com (604) 684 -1175
70 mil shares fully diluted (April, 2004)
http://panamericansilver.com/s/CorporateInformation.asp?ReportID=26039
@ $13.65/share
$955 mil MC
10 silver properties (3 in production)
produced 7 mil oz. silver in 2001:
Reserves & Resources through Dec. 11th, 2003 from
http://panamericansilver.com/s/ReservesAndResources.asp?ReportID=25303
743.2 million total
$955 mil MC / 743 mil oz. = $1.29/oz.
You get “approx” 4.66 ounces in the ground for 1 oz. silver’s worth of stock.

Additional Comments: PAAS is hosting the 2004 Silver survey summary by GFMS for the Silver Institute

On PAAS’s page on silver fundamentals, it says little about silver as money. Except maybe for the following phrases: “Many analysts forecast continuing weakness in the US dollar in 2004, which should bode well for higher silver prices.” and ” The outlook beyond 2004 is also promising for the silver market, due to continuing investment demand…”

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.

PAAS still refuses to recognize that silver is money, and they refuse to hold their money in the form of silver.

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.
http://panamericansilver.com/s/CorporateProfile.asp
“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.”

In my opinion, hedging prudence depends entirely on the price level to which silver will rise as denominated in dollars. Since I believe the potential is for silver to cross over $2000 to $4000 per ounce (on the way to infinity) in a monetary collapse, I would never hedge silver and never lock in a dollar price for long term production. If PAAS will, it goes to show that they don’t view silver as money, which is a counterproductive management philosophy for a shareholder who intends to invest in PAAS for the exposure to rising silver prices.

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)
http://www.minefinders.com/
36.4 mil outstanding 1 Q 2004 report
2.7 mil options
39.1 mil shares fully diluted 1 Q 2004
@ $6.61/share
$258 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.”
$258 mil MC / 195 mil oz. = $1.33/oz.
You get “approx” 4.52 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.TO KBRRF.PK (KIMBER RESOURCES)
http://www.kimberresources.com
info@kimberresources.com (604) 669-2251
31.6 mil shares fully diluted (Apr 20, 2004)
http://www.kimberresources.com/sharestructure.html
@ $1.70/share Cdn x .76 US/Cdn = US $1.29
$41 mil MC
from http://www.smartstox.com/reports/kbr.pdf
30 mil oz. silver resources Measured & indicated, plus inferred
540,000 oz. gold x 10 = 5.4 mil “silver equiv.”
$41 mil MC / 35.4 mil oz. = $1.15/oz.
You get “approx” 5.19 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.

WTZ WTC.TO (WESTERN SILVER) (formerly western copper)
http://www.westernsilvercorp.com
info@westernsilvercorp.com Jay Oness Toll Free: 1-888-456-1112
43.3 mil fully diluted (July 2004)
@ $7.14/share
$309 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
http://www.mips1.net/mgn03.nsf/UNID/SBAY-5SUBN6
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.
$309 mil MC / 287 oz. = $1.08/oz.
$309 mil MC / 1000 oz. = $.30/oz. –exploration potential
You get “approx” 5.56 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration Potential = 19

Additional comments: WTZ’s silver page: “Why Silver?” While acknowleding the silver fundamentals as produced by the Silver Institue, and shrinking supplies, it says nothing about silver as money. WTZ acknowledges their role is to make sure their shareholders are “well positioned to take advantage of any shortage of supply or rise in the price of silver.”

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

CFTN.PK (CLIFTON MINING)
http://www.cliftonmining.com/
clifton@cliftonmining.com 801-756-1414 (303) 642-0659 Ken Friedman
47 mil shares fully diluted (May 2004)
@ $.98/share US
$47 mil MC
http://www.cliftonmining.com/wsreview.htm –source of 100 mil oz. resources est.
http://www.cliftonmining.com/resource.htm
From: http://www.siliconinvestor.com/stocktalk/subject.gsp?subjectid=13531
“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”
$47 mil MC / 42 mil oz. = $1.12/oz.
$47 mil MC / 1000 mil oz. = $.047/oz.
You get “approx” 5.35 ounces in the ground for 1 oz. silver.
Exploration Potential: 127

Additional comments: Note the “exploration potential” is very large, but it also assumes that their JV partner, Dumont, does not acquire any interest in the property at all.

Perhaps an interesting and novel way to determine percentage ownership of the projects would be to look at the relative market caps for both Clifton, and Dumont, and then assume that the market has it “about right”, and then use thier relative values to determine a possible percentage ownership of each. And then, simply decide to own both, keeping your percentage ownership of each company, about the same. For example, if the MC of Clifton is $43 mil, and Dumont is about $10 mil, so own about 4.3 times as much Clifton as Dumont.

JV agreements were primarily entered into during a time when it was difficult to raise money through share offerings, as a way to advance the projects. Unfortunately, JV agreements also make it difficult for investors to value a company! Several companies at the NY Gold show in June were just completing buyout agreements (or working on doing so) with their JV partners.

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 28% 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.
Clifton Mining Company – ASAP Product to Be Produced in Brazil
The minimum royalty payable to ABL will be $57,000 per month. 28% for Clifton is $191,520/year.

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!

SSRI SSO.V (SILVER STANDARD RESOURCES)
http://www.silver-standard.com/
paull@silverstandard.com (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.)
@ $12.95/share
$738 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; 23 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.)
$738 mil MC / 872 mil oz. = $.85/oz.
You get “approx” 7.08 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! Let it be noted that SSRI decided to hold such a large percentage of their cash in the form of bullion, first, of all silver miners! The stock of SSRI has significantly outperformed their peers since they bought silver bullion.

SSRI now has more silver resources than PAAS. I’d expect SSRI’s market cap to soon exceed PAAS, especially given PAAS management’s lack of understanding that silver is money, and can be used as money.

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 resources through drilling and acquisition. 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, 2003. 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.

* TM.V TUMIF.OB (TUMI RESOURCES) (TUY Frankfurt Exchange) (I own shares)
http://www.tumiresources.com
nicolaas@attglobal.net Nick Nicolaas IR (604) 657 4058
24 fully diluted shares (Mar. 1, 2004)
@ $1.05/share Cdn x .76 US/Cdn = $.80 US
$19 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
$19 mil MC / 25 mil oz. = $.77/oz. ***I’m using this number***
$19 mil MC / 50 mil oz. = $.39/oz. (exploration potential)
You get “approx” 7.82 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration Potential: 16 (likely plus more after bonanza silver discovery late November, 2003.)

Additional comments: Tumi signs right to acquire 100% of the Jimenez de Teul project, Zacatecas Silver Belt, Mexico

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.

CZN.TO CZICF.PK (CANADIAN ZINC)
http://www.canadianzinc.com/
czn@canadianzinc.com 1-866-688-2001
78.5 mil fully diluted shares as of June, 2004
@ $.79/share Cdn x .76 US/Cdn = $.60 US
$47 mil MC
$14.6 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” 8.90 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments: Canadian Zinc Commences Exploration Program At Prairie Creek, NT

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 debt financing 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 perhaps over $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 RESOURCES)
http://www.oremex.com/s/Home.asp
info@oremex.com
28.8 mil shares fully diluted (End of May, 2004) after, and including financing?
@ $.70/share Cdn x .76 US/Cdn = $.53 US
$15 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 mannagement that have put other properties into production:
Anthony R. Harvey, Chariman, has put 14 properties into production in his 40 year career.
http://www.oremex.com/s/TejamenSilver.asp?ReportID=68653
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 silver properties)
$15 mil MC / 24 mil oz. = $.64/oz.
$15 mil MC / 100 mil oz. = $.15/oz. –exploration potential
You get “approx” 9.38 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration Potential: 40

Additional comments: Oremex Closes $2.6 Million Private Placement Financing May 28 “The Company issued a total of 2,890,023 units at $0.90 and 1,445,012 warrants exercisable at $1.10 for a period of 12 months from closing. In addition, 269,940 Agents’ Warrants were issued entitling the holder to purchase one unit at $0.90 for a period of 12 months.”

SHSH.PK (SHOSHONE SILVER)
http://www.shoshone-mining.com
Bill Hoyt, 785-383-9246
18 million outstanding shares
@ $.50 US
$9 mil MC
Lakeview Mine and Mill: 24,190 tons of mineralized material delineated at Lakeview, grading an average of 11.8 oz/t silver.
= 285,000 oz. silver. But is a narrow (high grade) vein mine, like Cour d’Alene and Hecla, with few reserves.
Conjecture (in Lakeview district): 336,000 tons at a grade of 11 ounces per ton of silver = 3.7 mil oz. silver. “Terms of the 25-year lease [of the conjecture] include payment of a $3000 per year advance royalty, issuance of one million shares of Shoshone common stock to Chester, and a sliding scale net smelter return based on the spot price of silver.” At .$60/share, that’s $.6 mil MC more for the lease.
blende project: 21.4 million tons grading 1.63 ounces per ton (oz/t) silver. (low grade) 34.8 mil oz. silver
(not 43101 compliant, plus 5.8% lead-zinc )
Shoshone must issue 1 million shares, and spend $5 million on exploration by December 31, 2008 to complete its 60 percent earn-in on the blende project. How to count that? As an investor, I hate evaluating these kinds of deals. 60% of 34.8 mil oz. silver is 20.9 mil oz. that will cost an additional $5 million, plus a million shares. At $.60/share, that’s $5.6 million for 20.9 mil oz. resource. That’s $5.6 million / 20.9 mil oz. = $.27/oz. acquisition cost to Shoshone for blende, which they don’t own yet, just an option. I don’t like options, which is why I buy silver bullion, and not paper promises. If there is dollar devaluation, such options may look cheap, but on the other hand, it also might expire.
Total: 4 mil oz. silver, plus an option on 20.9 mil oz. silver at blende.
$9 mil MC (plus $6.2 mil for leases) / 4 mil oz, plus 20.9 mil oz. (24.9 mil oz.) = $.61/oz.
You get options and leases that will give “approx” 9.81 ounces in the ground for 1 oz. silver’s worth of stock.

IMR.V IMXPF.OB (IMA EXPLORATION)
http://www.imaexploration.com
49,059,825 mil Fully Diluted shares (May 27, 2004)
@ $3.06/share Cdn x .76 US/Cdn = $2.33 U.S
$114 mil MC
Exploring in Argentina.
$4.5 million cash
Snowden Reports Over 200 Million Ounces of Contained Silver at IMA’s Galena Hill — May 25th
Indicated + Inferred Resource = 243 mil oz.
“This resource includes only the Galena Hill deposit and portions of the adjacent Connector zone, and does not include known and interpreted mineralization at Navidad Hill, Barite Hill, Calcite Hill, or along the Esperanza Trend.”
My comments: This resource might be perhaps 1/4 or 1/5th of the overall potential resources, based on estimating by looking at size of the land area being explored, compared to the size of the land area covered by the resource calculation. The full exploration potential might be 4 times as big.
$114 mil MC / 243 mil oz. = $.47/oz
You get “approx” 12.77 ounces in the ground for 1 oz. silver’s worth of stock.
(Exploration potential might be (times 4) or 51.

Additional comments: Positive drilling results are coming in, and drilling continues.

IMA’s Drilling at Navidad Intersects 115 Meters Grading 454 g/t ’13 oz/t’ Silver at Galena Hill

I don’t think the lawsuit challenging IMR’s claims has any merit.
IMA Exploration Inc.: Statement of Defence Filed Wed, Apr 7

IMA has many other silver properties, and they plan to spin these off into a new company.

IMA has several joint venture partners in the area in Argentina near Navidad. See Tinka, Cloudbreak, Consolidated Pacific Bay. Other companies are in the near area such as Pategonia Gold, Pacific Rim, and Silver Standard. And, of course Aqualine who, based on their lawsuit, seems as if they think they own the entire area for 50 miles around all their mining claims. That’s a total of 7 other companies in the area. And of course, Cardero also has significant exploration properties in Argentina.

FAN.TO FRLLF.PK (FARALLON RESOURCES)
http://www.farallonresources.com/fan/Home.asp
(604) 684-6365 Erick Bertsch
77.5 mil shares fully diluted as of April 1, 2004
@ $.75/share Cdn x .76 US/Cdn = $.57 US
$44 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.)
$44 mil MC / 98 mil oz. silver equiv. = $.45/oz.
$44 mil MC / 167 mil oz. silver equiv. = $.26/oz. –exploration potential
You get “approx” 13.3 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration potential = 23

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.

SRLM.PK (STERLING MINING)
http://www.sterlingmining.com/
RDemotte@aol.com Ray DeMotte 208/676-0599
12.2 mil shares outstanding (May 31, 2004)
16.6 mil shares fully diluted (May 2004) –(I use fully diluted whenever possible in my market cap calculations)
@ $5.95/share
$99 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. “
Other properties:
Baroness   15 mil — tailing project, no further exploration potential.
Tesorito      17 mil — + exploration potential
sa              14 mil — + exploration potential
Total: 231 mil oz. silver
$99 mil MC / 231 mil oz. = $.43/oz.
$99 mil MC / 550 mil oz. = $.18/oz. (exploration potential)
You get “approx” 13.9 ounces in the ground for 1 oz. silver’s worth of stock.
(Exploration potential is 33.)

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 had “more than 360 million ounces of production over the past century” and 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.”

For more detailed information on what’s happening in the Silver Valley in Idaho, see the following link:
http://www.blanketpower.com/mining/titlepage.htm

I will be speaking in Idaho at the Silver Summit in September 23-24
http://www.silverminers.org/summit/index.html

CHD.V CHDSF.PK (CHARIOT RESOURCES)
http://www.chariotresources.com/
45 mil shares fully diluted October 2003
@ $.34/share Cdn x .76 US/Cdn = $.26 US
$12 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.)
$12 mil MC / 32.7 mil oz. = $.36/oz.
You get “approx” 16.8 ounces in the ground for 1 oz. silver’s worth of stock.

GGC.V GGCRF.PK (GENCO RESOURCES)
http://www.gencoresources.com/
IR: Rob Blankstein: 604-682-2205, or info@gencoresources.com
20+ mil shares fully diluted (April, 2004)
@ $.92/share Cdn x .76 US/Cdn = $.70
$14 mil MC
–Producer in Mexico.
http://www.gencoresources.com/reserves.html
Inferred resources: 484g/t silver x .03215 = (15.5 oz/t) x 2.3 mil t = 35.8 mil oz. silver
2.00g/t gold x .03215 = 148,000 oz. gold x 10 = 1.5 mil oz. “silver equiv”
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
$14 mil MC / 40 mil oz. silver = $.35/oz.
You get “approx” 17.1 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.

* SVL.V STVZF.PK (SILVERCREST MINES) (I own shares)
http://www.silvercrestmines.com/
info@silvercrestmines.com (604) 691-1730
25.9 million fully diluted March, 2004
@ $.92/share Cdn x .76 US/Cdn = $.70 US
$18 mil MC
$3 mil cash in the til.
Honduras – Arena Blanca: high grade exploration project, 7,600 g/t silver, no samples, adit inaccessable.
Honduras – Opoteca Deposit: Indicated and Inferred silver: 12.8 mil oz. silver
Honduras – La Pochota: a vein, 1-4 meters in width, of between 300 to 500 g/t silver, needs drilling
Honduras – El Ocote Deposit: Indicated and Inferred silver: 19.8 mil oz. silver
El Salvador – El Zapote Project: Indicated and Inferred silver:  14.3 mil oz. silver
Guatemala – Concepcion Concession (pending): includes several past producing silver mines. documented results of greater than 13,714 g/t silver — a historical resource of 1.9 million tonnes grading 86 g/t (2.5 opt) silver (4.75 mil oz., non- 43-101 compliant)
Totals: 12.8 + 19.8 + 14.3 + 4.75 = 51.65 mil oz.
Ultimate exploration potential may be another 40 to 100 mil oz? See the Rosita Extension, grades 100 to 200g/t silver, news release dated Sept., 2003, “SilverCrest Makes Significant Discovery at El Ocote Silver Project”
$18 mil MC / 52 = $.35/oz.
$18 mil MC / 150 = $.12/oz.
You get “approx” 17.2 ounces in the ground for 1 oz. silver’s worth of stock.
(Exploration potential = 50+ oz.)

Additional comments: I have re-calculated the way I’ve been counting Silvercrests Reserves and Resources. Before, I was including the first part of the range of the “exploration potential” in the first number. But usually, I count exploration potential in only the second, larger figure, which is how I changed it.

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.

Currently drilling El Zapote, El Salvador.

I own shaers of SVL.V

RDV.TO RDFVF.PK (REDCORP VENTURE)
http://www.redcorp-ventures.com/
http://www.redfern.bc.ca/index.html
52.7 mil shares fully diluted (March 2004)
@ $.33/share Cdn x .76 US/Cdn = $.25
$13 mil MC
http://www.redfern.bc.ca/projects/tulsequah/exploration_resources.html#results
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.
$13 mil MC / 38.3 mil oz = $.35/oz.
You get “approx” 17.4 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 RESOURCES)
http://www.admiralbay.com/
info@admiralbay.com 604 628 5642 — Curt Huber– Business Development
33.3 mil shares fully dilluted. (March, 2004)
@ $1.05/share Cdn x .76 US/Cdn = $.80 US
$27 mil MC
They have $6 million cash.
–owns an option to earn 70% interest inn “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.
$27 mil MC / 89.3 mil oz. = $.30/oz.
You get “approx” 20.1 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. After speaking with Curt Huber at the NY Gold show in early June, 2004, Admiral Bay soon expects to be cash flow positive soon from the gas projects.

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

PLE.V (PLEXMAR RESOURCES INC)
http://www.paradox-pr.ca/ — STILL an website inactive. Check Sedar. or
http://www.plexmar.com/
Guy Bedard, President, Phone: (418) 658-6776 Fax: (418) 658-8605 info@plexmar.com
” Plexmar Resources recently took the opportunity of acquiring 2 Peruvian Gold/Silver properties.
Our web site is currently being updated to reflect those new projects.”
62 mil fully diluted (March 2004)
@ $.18/share Cdn x .76 US/Cdn = $.14 US
$8 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.
$8 mil MC / 38.4 mil oz. = $.22/oz.
You get “approx” 27.1 ounces in the ground for 1 oz. silver’s worth of stock.

EXR.V EXPTF.PK (EXPATRIATE RECS)
http://www.expatriateresources.com/
info@expatriateresources.com 1-877-682-5474 Dr. Harlan D. Meade, President and CEO
103 mil shares fully diluted June 2004 (including the Atna buy out)
@ $.26/share Cdn x .76 US/Cdn = $.20
$20 mil MC
$1.2 mil CAN capital in the till no debt.
Mostly a base metals company: Zinc. Also has some silver & gold.
Total metal content of the six projects (the figures below include only 60% of the Wolverine project, which is now 100% owned) 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 oz.
Gold x 10 = 4.3 mil “silver equiv”.
(+ 33 mil oz silver from the buy out of Atna’s portion of the Wolverine project)
$20 mil MC / 100 mil oz. silver = $.20
You get “approx” 29.4 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments: Expatriate Purchases Atna’s Interest in Wolverine Deposit, Yukon
Excerpt:

Purchase Agreement TermsExpatriate will acquire Atna’s 39.4% interest in the Wolverine Joint Venture for cash payments of $2 million, the issuance of 10 million common shares (the “Transaction Shares”) and 5 million share purchase warrants (the “Warrants”), each Warrant entitling Atna to purchase one common share of Expatriate at a price of $0.32 for two years from issuance

Wolverine is rich in precious metals containing about 75,000,000 ounces of silver and 352,000 ounces of gold.

Thus, Expatriate is acquiring 39.4% of 75 million ounces of silver (29.5 mil oz.), and 39.4% of 352,000 ounces of gold. The gold portion, at 10:1 ratio, is (3.5 mil oz.) of “silver equiv”. Thus, I’m adding 33 mil oz. of silver to my prior total. I’m also going to add in 10 million common shares, and 5 million warrants, for an additional 15 million shares fully diluted. To help evaluate the acquisition, that’s 15 mil shares fully diluted at .27 Cdn x .74 = .20. .20 x 15 mil shares = $3 mil MC US + $1.48 mil US cash = $4.48 mil MC / 33 mil oz. silver = $.135/oz. acquisition cost.

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)
http://www.minesmanagement.com/
info@minesmanagement.com (509) 838 6050 Doug Dobbs
12.4 mil shares fully diluted (April 2004)
@ $4.25/share
$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” 29.7 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments: Mines Management Completes Interim Mine Plan for Montanore Silver Project— June 17

“The revised mine plan, as currently conceived, envisions an operating capacity of 12,500 tons per day, yielding average annual production of approximately 7.8 million ounces of silver and 32,000 tons of copper, at a capital cost of approximately $236 million.”
“The cash operating costs of the project remain attractive at approximately $12.14 per ton, taking into account inflation offset by increases in productivity from improved mining methodology and technology.”

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: $236 million current estimate.

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
http://www.thebullandbear.com/bb-reporter/bbfr-archive/minesmgmt.html

Mines Management has a new Message Board at Yahoo! Finance:
http://finance.yahoo.com/q/mb?s=MGN

I own shares of MGN.

HDA.V (HUSIF pink sheets symbol?) (HULDRA SILVER)
no website
Phone: Magnus 1 (604) 261-6040
6.924 million shares out (fully diluted) (Nov or Dec ’03?)
@ $.305/share Cdn x .76 US/Cdn = US $.23
$1.6 mil MC
no debt
HDA’s proven and probable reserves stand at 161,000 tons of
ore grading an average 25.6 ounces per ton silver, and 10 percent combined
lead/zinc — 4.12 mil oz silver, not including the zinc & lead.
According to Magnus, the indicated and inferred reserves total about 180,000
tons at about the same grading — in other words, a further 4 million ounces of
silver.
~8 mil oz. silver
$1.6 mil MC / 8 mil oz. silver = $.20/oz.
You get “approx” 29.5 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.”

ABI.V ABMBF.PK (Abcourt Mines Inc.)
no website Jeff Tremblay (IR) (418) 575-1169
26 mil shares fully diluted (May, 2004)
@ $.175 share Cdn x .76 US/Cdn = $.13
$3.5 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 inffrastructure.
–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
$3.5 mil MC / 19 mil oz. = $.18/oz.
You get “approx” 33 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments: looking to raise $5 mil to reopen the gold mine.
looking to raise $5 mil to reopen the silver mine. (drilling the silver mine planned for summer, 2004)
looking to raise $5 mil for the zinc project.

* ASM.V ASGMF.PK (AVINO SILV GOLD) (I own shares.)
http://www.avino.com/
shares@avino.com 604 682-3701 — David Wolfin
10.5 mil shares outstanding. / 12.5 mil shares fully diluted (June 2004)
16.5 mil shares fully diluted (including, and after the purchase of remaining 51% of the Avino mine)
@ $1.27/share Cdn x .76 US/Cdn = $.97 US
$16 mil MC
from: http://www.avino.com/other/goldstock100197.html –in 1997
“How Much Silver Does Avino Have?”
“Operations at Avino’s silver mine in Mexico are both open-pit and underground. I examined the reserves and interpolated the tonnage into silver ounces as follows: 28-million ounces proven; 50-million ounces probable and 27 million ounces possible.” (Not all are 43101 compliant reserves & resources.–that is an old, third party report.)
–focus is on being silver company. A pllus.
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 owned 49% of that, or 51.5 mil oz., prior to the purchase agreement for the remainder for an additional 4 million shares.
$16 mil MC / 105 mil oz. = $.15/oz.
You get “approx” 39.5 ounces in the ground for 1 oz. silver’s worth of stock.

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

Mexican mining law once stated that a controlling interest had to be owned by Mexicans, which explains why they only have a 49% interest. That they don’t have a controlling interest is a minus. This law has changed. The mine was operational until the mine went into temporary closure in November 2001. So there is in place an existing mine, with working infrastructure, which is a bonus. There is a need for drilling in order to test the potential that was stated in the feasibility study.

(I own shares of ASM.V)

UNCN.OB (UNICO INC)
http://www.uncn.net/
Ray Brown, 530-873-4394
90 mil shares (about, in June, 2004)
@ $.06/share
$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 September 1, 2004 ($1 million payment due, plus fees) or August 31, 2005 ($4 million total due), so they need to raise significant money.
49 mil oz. total.
$5 mil MC / 49 mil oz. = $.11/oz.
You have a lease on “approx” 54 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments: Unico Inc. & Crown Mines, L.L.C. Agree to Modify Terms Regarding the Deer Trail Mine in Marysvale, Utah— Lease extended to August 31, 2005!

Arazona law is that a company cannot issue stock for less than 10 cents/share. So if Unico is going to do a financing, it will be no less than 10 cents. Plus, they will need a $4 million financing, all total, which would add 40 million shares so it would be $13 million MC / 49 = $.26/share. If they only raise $1 million, more or less for the Sept 1 2004 payment, then there would be less dilution at this price, and the rest could be raised by August 31, 2005 at higher silver prices, or perhaps not at all if the silver price stalls.

Without the Dear Trail property, Unico has 20 mil oz. of silver.
$4 mil MC / 20 mil oz. = .20/oz., or about 30 oz. of silver for 1 oz. of silver’s worth of stock.

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:

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)
http://hecla-mining.com/
hmc-info@hecla-mining.com (208) 769-4100
118 mil shares outstanding (derrived from the market cap and share price late May, 2004)
@ $5.62/share
$663 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.)
412,000 oz. gold x 10 = 4.1 mil oz silver equiv.
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) (HL owns 31% of this, but the 31 mil oz. number reflects that percentage ownership.)
the Lucky Friday mine (proven & probably reserves) 14 mil. (produced 2 mil)
4.1 + 8.7 + 31 + 14 = 57.8
Total silver equiv. reserves = 57.8 mil oz.
$663 mil MC / 57.8 mil oz. = $11.47/oz.

Additional comments: Given that CDE made a share offer in week #36 for Wheaton River, I expect that Hecla will try a similar tactic very soon, and offer shares to acquire another silver company.

Hecla is the most expensive company on the list in terms of cost per oz. of silver in the ground. But 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 2004. Annualized, that’s $24.8 million for the year, which gives a P/E ratio of $663 mil MC / $24.8 mil = 26.7, which indicates to me that HL is still too expensive of a stock to buy. Other silver properties and companies in the silver world have P/E ratios of as low as 3.

At the NY Gold show in June, I spoke with Vicki Veltkamp, Hecla’s vice president of investor and public affairs, and I listened to her 15 minute presentation on Hecla at the show. I felt that her presentation honored my work, since she focused on the fact that Hecla does not have substantial reportable reserves, due to the nature of vein mining. She also emphasized that they already had detailed plans for spending all of their available cash, of $123 million, which implied that they had nothing left over to buy silver bullion.

HL is not going to buy silver bullion with their cash anytime soon.

One of Vicki’s arguments was that HL only produces 9 million ounces of silver, and that in a market that produces 500 million ounces of silver a year, that withholding production would not significantly move up the price. I think she’s looking at the wrong numbers. HL’s market cap has recently ranged from $600 million to up to $1,000 million. The remaining silver at the COMEX, available for delivery in the registered category is only 47 million ounces, not the 500 million ounes annually produced. The available silver is valued, at $6/oz., at $280 million. HL could issue 1/4 to 1/3 more stock than they already have outstanding, and use the proceeds to buy perhaps $250 million worth of silver bullion, and break the price to sky high levels, which would boost profits enormously.

If HL mines 9 million ounces of silver a year, at a cost of about $5-6/oz. (because their profits are slim), then if the silver price rises to about $33/oz, and other costs remain the same, HL could be making $250 million dollars per year. It seems the largest silver companies have absolutely no vision about how they can affect the markets, and take a leadership role in the world of silver.

I urged Vicki that HL should use their stock or cash, if not for buying silver bullion, then to acquire other silver companies, since I believe their stock is overvalued. Vicki said HL does look at many acquisition opportunites, and would be interested in looking at others.

I expect silver bullion to continue to outperform HL stock at these prices.

MGR.V MGRSF.PK (MEXGOLD RSCS)
http://www.mexgold.com/
52.5 mil shares fully diluted (spring 2004)
@ $3.00/share Cdn x .76 US/Cdn = $2.28 US
$119 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”
$119 mil MC / 185 mil oz. = $.65/oz.
You have an “exploration potential target” of 9 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:
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.”

CDU.V CUEAF.PK (CARDERO RSCS)
http://www.cardero.com/
hvanalphen@cardero.com Henk Van Alphen — President (604) 408-7488
35 million shares outstanding last quarterly (as of June, 2004)
5.1 million share warrants outstanding
40.1 million shares, fully diluted (July 1 2004)
@ $2.60/share Cdn x .76 US/Cdn = $1.98 US
$79 mil MC
($17 million Cdn cash in the treasury)

Additional comments:
Cardero has three silver properties in Argentina; two main silver exploration properties: Chingolo and Providencia.

Providencia — high grades of silver, former silver mine, could have 100-250 mil oz.
Chingolo — 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.

June, 2004: Company quote: “The Company is actively evaluating silver, gold, copper and iron-ore projects which will ensure the recognition of Cardero as a world-class exploration and development company.”

I spoke with Henk in Vancouver about those iron properties, and I spoke with an expert on iron. I had previously read that iron had doubled. The story that I heard was that iron was selling for about $23/ton, but it has recently increased to as high as $150/ton in some futures contracts. That’s a huge move. However, iron may be selling for about $50/ton at present, with perhaps a prior spike to $100. I really don’t know where to go yet to verify that price info. Further, I heard that some of the most profitable and largest mines in the world are iron mines. Although my main investing interest remains in silver, I am aware that mine construction will require both energy, and yes, iron for the mills, the tracks, the carts, the heavy machinery, the tractors, trailers, dozers and trucks!

Cardero Provides Update on Iron Oxide Copper-Gold Projects in Peru

Excerpt:
In 2002 a paper on the Marcona IOCG district by Rio Tinto and Queen’s University, published in Porter, T.M. (Ed), 2002 – Hydrothermal Iron Oxide Copper-Gold & Related Deposits: A Global Perspective, volume 2; PGC Publishing, Adelaide, pp 115-130, states, “Approximate resources include more than 1400 Mt of iron ore at Marcona and 1000 Mt of magnetite mineralization at Pampa de Pongo”. On page 123 of this paper the authors state that, “Wide-spaced drilling suggests a potential resource of 1,000 Mt comprising approximately 75% magnetite. Hole 1 cut 168.7 m of magnetite grading 52.9% Fe with anomalous Cu and Au.” A review of this publication and data provided to the Company by Rio Tinto suggests that the potential quantity and grade of the Pampa de Pongo deposit is conceptual in nature, that there has been insufficient exploration to define a mineral resource on the property and that it is uncertain if further exploration will result in discovery of a mineral resource on the property.

My comments: At 1000 million tonnes, that’s a billion tonnes. At up to $100/ton, it’s potentially an $100 billion worth of iron, not counting the copper or gold. Whether such mineralization exists, and whether it is cost effective to extract such minerals (costing more or less than $100 billion dollars) remains to be seen, and is the job of an explorer like Cardero.

AOT.V ASOLF.PK (ASCOT RSCS)
http://www.bmts.bc.ca/aot/
1 604 684 8950
39.7 fully diluted. (Nov 2003)
@ $.26/share Cdn x .76 US/Cdn = $.20 US
$8 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.)

It may be better to buy Ascot than Cardero, depending on prices. Check the math, and call Ascot to verify Cardero stock holdings, and number of shares.

SPM.V SMNPF.PK (SCORPIO MINING)
http://www.scorpiomining.com
52.2 mil shares fully diluted April 2004 (after recent $16 million Cdn private placement)
@ $1.80/share Cdn x .76 US/Cdn = $1.37 US
$71 mil MC

* FCO.TO FCACF.PK (FORMATION CAPTL) (I own shares)
http://www.formcap.com/frhome.htm
inform@formcap.com 604-682-6229
165 mil fully diluted, March 2004
@ $.53/share Cdn x .76 US/Cdn = $.40
$66 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.
The refinery has started up, on time and under budget sunshinerefinery.com

I own shares of FCO.TO

* OTMN.PK (O.T. MINING) (I own shares)
http://www.otmining.com/
info@otmining.com Jim Hess Tel: 514-935-2445
12.8 mil fully diluted (May 15, 2004)
@ $4.50/share
$58 mil MC
Montana
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.

It’s ‘Our Turn’ For Silver
by Greg Kyle June 16, 2004

Here is a comparatively busy message board for O.T. Mining:
http://ragingbull.lycos.com/mboard/boards.cgi?board=OTCF:OTMN

A nearly abandoned message board for O.T. Mining:
http://www.siliconinvestor.com/stocktalk/subject.gsp?subjectid=21081

I own shares of OTMN.PK

* MMGG.OB (METALLINE MINE) (I own shares)
http://www.metalin.com/site_map.html
metalin@attglobal.net Merlin Bingham 208-665-2002
21.6 mil shares fully diluted (April, 2004) (only 2 mil options and warrants)
@ $1.75/share US
$38 mil MC
$8 million cash in the till.

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.

For more, see the research works article here:
http://www.stocksontheweb.com/mmgg.htm

(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)
http://www.tvipacific.com
Dianne (IR) Phone: (403) 265-4356
400.5 mil shares fully diluted (June 14 2004)
@ $.155/share Cdn x .76 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: TVI Pacific Inc. Announces Closing of $2,288,788 CAD Private Placement Financings Monday June 14

TVI 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!

MCAJF.PK (MACMIN LTD)
http://www.macmin.com.au/
450 mil shares and options (Feb., 04)
@ $.115/share
$52 mil MC
This stock seems extremely volitile in price, ranging from 8 cents to 13 cents.
“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

* FR.V FMJRF.PK (FIRST MAJESTIC) (I own shares)
http://www.firstmajestic.com/s/Home.asp
info@firstmajestic.com
27.8 mil shares fully diluted March, 2004
from http://www.firstmajestic.com/s/ShareStructure.asp?ReportID=67945&_Title=Share-Structure
@ $1.56/share Cdn x .76 US/Cdn = $1.19
$33 mil MC
from http://www.jaba.com/2003/info/niko_2003_1.html
http://www.stockjunction.com/modules/emails/featuredprofiles/FR/majestic_sj.html
Up to 80% ownership of the Niko project.
from http://biz.yahoo.com/cnw/040113/first_majestic_mexico_1.html
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.”

First Majestic Resource Corp – Acquisition of the Perseverancia Silver Mine, and other mining properties in Chalchihuites, Zacatecas, Mexico — June 10

I own shares of FR.V

IAU.V ITDXF.PK (INTREPID MINRLS)
http://www.intrepidminerals.com/
scoates@intrepidminerals.com Stephen Coates, Investor Relations (416) 368-4525
51 mil fully diluted (April, 2004)
@ $.78/share Cdn x .76 US/Cdn = $.59 US
$30 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.

* NPG.V NVPGF.PK (NEVADA PAC GOLD) (I own shares)
http://www.nevadapacificgold.com/
dhottman@nevadapacificgold.com (604) 646-0188 David Hottman
47.4 mil shares fully diluted (April 2004) (includes 3.5 mil warrants set to expire on July 15 at $1.35 Cdn)
+ 9.3 mil shares fully diluted in the June 25th private placement
56.7 mil shares fully diluted (June 25, 2004)
@ $1.07/share Cdn x .76 US/Cdn = $.81 US
$46 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.
$46 mil MC / 200 mil oz. = $.23/oz.
$46 mil MC / 1000 mil oz. = $.046/oz.
The inverse: you “might” get 26 – 130 ounces in the ground for 1 oz. silver.

Additional comments: On June 22, I wrote an article about Nevada Pacific Gold.

On June 25th, NPG announced a private placement: Nevada Pacific Gold Negotiates $6 Million Private Placement

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 Chairman, 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

MAI.V MNEAF.OB (MINERA ANDES)
http://minandes.com/
ircanada@minandes.com (604) 689-7017 Art Johnson
90 mil shares fully diluted (April, 2004)
@ $.39/share Cdn x .76 US/Cdn = $.30 US
$27 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.

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.

MAG.V MSLRF.PK (MAG SILVER)
http://www.magsilver.com
28.6 mil fully diluted shares (May 28, 2004)
@ $1.13/share Cdn x .76 US/Cdn = US $.86
$25 mil MC

–“MAG Silver Corporation enters the sillver 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.

MAG Silver Commences 3000 Metre Drilling Program at Juanicipio and Lagartos Near Fresnillo June 10

ECU.V ECUXF.PK (ECU SILVER MINI)
http://www.ecu.qc.ca/indexen.html
ecu@ecu.qc.ca (819) 797-1210
103.3 mil fully diluted shares = (6 January 2003)
@ $.355/share Cdn x .76 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 sharre 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)
http://www.caledonresources.com/
Shares Outstanding – 180,721,142
@ .15 at Yahoo!
(Mining in China)
It trades on the London Stock Exchange, under the symbol, CDN
$27 mil MC

* EDR.V EDRGF.PK (ENDEAVOUR GOLD) (I own shares)
http://www.edrgold.com/
Hugh Clarke, Investor Relations 1-877-685-9775
25.7 mil shares fully diluted (May 28th, 2004)
@ $1.19/share Cdn x .76 US/Cdn = $.90
$23 mil MC
As of May 28th, 2004, they have $9 mil Cdn cash.
If all options and warrants are exercised, they will have another $9.8 mil Cdn in cash.
They believe they may be a chance they will not need to dilute further to develop current silver production plans at the Santa Cruz Mine. Endeavour is not a “resource” play, but rather, a “production” play on silver. They are listed with the explorers because they do not have large drill results or a resource calculation outlining significantly large resources–they have only around 5 million ounces is all. But so they don’t have a “prospective” mining property. Instead, they have a working mine! Like Hecla.
http://www.edrgold.com/s/SantaCruzMine.asp
–currently producing 600,000 oz. silverr/yr.
–plans to increase production to 4,000,000 oz. silver/yr

I own shares of EDR.V

BZA.V ABZGF.PK (AMER BONANZA)
http://www.americanbonanza.com/
176 mil shares outstanding 1 Q 2004
15.2 mil options
43.7 mil warrants
235 mil shares fully diluted 1 Q 2004
@ $.1275/share Cdn x .76 US/Cdn = $.10
$23 mil MC
American Bonanza Acquires High Grade Silver Property in Nevada & Goldcorp Exercises Warrants

* CBE.V CBEFF.PK (CABO MINING)(I own shares)
http://www.cabo.ca/
jav@cabo.ca (604) 681-8899 John Versfelt, President
33.3 million fully diluted
@ $.85/share Cdn x .76 US/Cdn = $.65
$22 mil MC

Additional Comments: June 30, 2004 CABO COMPLETES ACQUISITION OF DRILLING SERVICES COMPANIES AND ANNOUNCES MANAGEMENT TEAM Cabo Mining Enterprises Corp. today announces that it has completed the acquisition of 100% of the shares of each of Heath & Sherwood Drilling (1986) Inc. and Petro Drilling (Maritimes) Limited , thereby controlling a fleet of 60 drills and employing in excess of 150 people…

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.

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)
http://www.quaterraresources.com/
Jay Oness Toll Free: 1-888-456-1112
60.6 mil shares fully diluted
@ $.44/share Cdn x .76 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)

EPZ.V ESPZF.PK (ESPERANZA SILVR)
http://www.esperanzasilver.com/s/Home.asp
30.2 million shares fully diluted (june 2004)
@ $.86/share Cdn x .76 US/Cdn = US $.65
$20 mil MC
“Esperanza Silver Corporation is solely dedicated to the identification, acquisition and exploration of new silver projects.” Looking for high grades.

NJMC.OB (NEW JERSEY MIN)
http://www.newjerseymining.com/
Fred or Grant Brackebusch minesystems@usamedia.tv
23.9 fully diluted Apr, ’04
@ $.66/share US
$16 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.

PXI.V PNXPF.PK (Planet Exploration Inc.)
http://www.planetexploration.info/mexico.asp –link broke.
30.8 mil shares fully diluted (Jan. 2004)
@ $.70/share Cdn x .76 US/Cdn = $.53
$16 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.”

BCM.V BCEKF.PK (BEAR CRK MINING)
http://www.bearcreekmining.com/s/Home.asp
39.2 million shares fully diluted
@ $.40/share Cdn x .76 US/Cdn = $.30 US
$12 mil MC
–About 6 properties in Peru

DNI.V DMNKF.PK (DUMONT NICKEL)
http://www.dumontnickel.com
info@dumontnickel.com (416) 595-1195
60 mil shares outstanding (April 15, 2004) does not include options and warrants.
@ $.25/share Cdn x .76 US/Cdn = $.19
$11 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 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)
http://www.excellonresources.com
87 mil shares fully diluted (Jan 9, 2004 press release)
@ $.21/share Cdn x .76 US/Cdn = $.16 US
$14 mil MC
From http://www.smartstox.com/reports/excellon.html
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%)

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.

* KG.V KDKGF.PK (KLONDIKE GOLD) (I own shares)
http://www.klondikegoldcorp.com/
70 mil fully diluted (Nov. 2003)
@ $.245/share Cdn x .76 US/Cdn = $.19 US
5 year high .30
$13 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)
http://www.stealthminerals.com
Email-Bill@McWilliam.com 604-306-0391 Bill McWilliam, Chief Executive Officer
48 mil shares (August 31- 02)
@ $.31/share Cdn x .76 US/Cdn = $.24
$11 mil MC

APM.V (Amerix Precious Metals Corp)
formerly (NEW BULLET GP)
www.amerixcorp.com
50 mil shares fully diluted (including 15 mil new PP)
http://www.newbulletgroup.com/financial.htm
@ $.25/share Cdn x .76 US/Cdn = $.19 US
$9.5 mil MC
APM.V has a gold deposit in Brazil that’s bigger than the silver project in Mexico.
http://www.amerixcorp.com/mexico.htm
” 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.
http://www.newbulletgroup.com/April1820022.pdf
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.
$9.5 mil MC / 75 mil oz. =
$9.5 mil MC / 210 mil oz. =

SDR.V SDURF.PK (STROUD RSCS) (There is no PK symbol as yet)
http://www.stroudresourcesltd.com/projects-santo.html
gcoburn@stroudresourcesltd.com Mr. George E. Coburn, President Tel: 416-362-4126
87.4 mil fully diluted shares (April, 2004)
@ $.225/share Cdn x .76 US/Cdn = $.19
$15 mil MC
JV partner with APM.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.
$17 mil MC / 45 mil oz. =
$17 mil MC /150 mil oz. =

SRY.V (STINGRAY RSCS)
http://www.stingrayresources.com/
info@stingrayresources.com (416) 368 6240
17.1 mil shares fully diluted (may 28, 2004)
@ $.94/share Cdn x .76 US/Cdn = $.71
$12 mil MC- Current projects centered in the Sierra Madre Belt of Mexico

* CMA.V CRMXF.OB (Cream Minerals Ltd) (I own shares.)
http://www.creamminerals.com/cream/main.htm
http://www.langmining.com/cream-mx/
34.8 mil shares fully diluted (March 31, 2004)
@ $.35/share Cdn x .76 US/Cdn = $.27 US
$9 mil MC
from: http://www.langmining.com/cream-mx/companyProjects_Summary.html
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.
$9 mil MC / 360 mil oz. = $.03/oz. (exploration potential) –not a “resource”!!!
You may get 232 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”…

Cream Re-Evaluates Silver Bear Zone Kaslo Silver Property, BC – CCNMatthews

(I own shares of CMA.V)

CHMN.PK (CHESTER MINING)
http://www.chestermining.com/
Bill Hoyt, 785-383-9246
” 2.3 million shares outstanding, positive working capital and no debt “
@ $4.00/share US
$9 mil MC
http://biz.yahoo.com/bw/031121/215141_1.html
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.

GNG.V GGTHF.PK (GOLDEN GOLIATH)
http://www.goldengoliath.com/
604-682-2950
32.4 mil shares fully diluted
@ $.285/share Cdn x .76 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)
http://www.greatpanther.com
Robert Archer, President, & Kaare Foy CFO: 604 608 1766
25.4 mil shares fully diluted April 23, 2004
@ $.46/share Cdn x .76 US/Cdn = $.35
$9 mil MC

* KRE.V KREKF.PK (KENRICH ESKAY) (I own shares)
http://www.kenrich-eskay.com/
Toll-free 1-888-805-3940 or (604) 682-0557
about 20,413,341 shares, fully diluted (Late May, 2004)
@ $.55/share Cdn x .76 US/Cdn = $.42 US
$8.5 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

MMG.V MMEEF.PK (MCMILLAN GOLD)
http://www.macmillangold.com/
25.6 mil shares outstanding (3q 2003 report June, 2003)
@ $.44/share Cdn x .76 US/Cdn = $.33
$8.6 mil MC

EGD.V EGDMF.PK (ENERGOLD MINING)
http://www.energold.com/s/Default.asp
Fred Davidson President (604) 681-9501 info@energold.com
16.8 million Fully Diluted (June 30, 2002)
@ $.56/share Cdn x .76 US/Cdn = $.43
$7 mil MC
“advanced silver project in Mexico” Real de Belem — property has “all the permits required for the commencement of a 200 tonne per day mining operation.” A range of 571 to 3,713 g/t Ag. (may not conform to Canadian NI43-101 standards. ) A 16 hole, 1500 m drill program is currently underway. At any time during the currency of the Option Agreement, Energold will have the right to acquire a 100% interest in the Real de Belem project for an additional US$5.0 million.

LEG.V LEGCF.PK (LATEEGRA RSCS)
http://www.lateegra.com
Michael Townsend, President Toll Free: 1-866-669-9377 Richard one of the IR guys.
38.7 fully diluted? (Jan 7, 2004)
@ $.20/share Cdn x .76 US/Cdn = $.15 US
$6 mil MC
see also Teuton Resources Corp (TUO.V)
* AUN.V AUNFF.PK (Aurcana Corp) (I own shares)
http://www.aurcana.com/
CEO Ken Booth 604-331-9333 kbooth@aurcana.com
45.5 million shares fully diluted (June 2004)
@ $.14/share Cdn x .76 US/Cdn = $.10 US
$4.7 mil MC
Cash $650,000 Cdn, no debt
Drilling to commence on high-grade, gold-silver targets. (in Mexico)

(I own shares of AUN.V)

TUO.V TEUTF.PK (TEUTON RES)
http://www.teuton.com/
Dino Cremonese, P.Eng. President (604) 682-3680
20.6 mil fully diluted (July 28,2003)
@ $.255/share Cdn x .76 US/Cdn = $.19
$4 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”

TBLC.PK (TIMBERLINE RES)
http://www.timberline-resources.com
Company contact: Bill Hoyt, director. 785-383-9246
4.88 million shares outstanding.
@ $.95/share
$4.6 mil MC
The Company has acquired seven mineral prospects to explore. These prospects are located in Nevada, Idaho and Montana.
The Montana property is near the property owned by Mines Management.
Silver Property: Minton Pass project: 20 claims containing Revett formation silver/copper project in Northern Montana. At least 5 drill holes were drilled on or near the claim group in the 1970s and 1980s. A 1971 geologic report indicates that mineralized outcrops of Revett quartzite containing bornite and other copper minerals could be traced for about 1 mile along strike of the outcrop.A short adit was driven to expose the mineralization.Sampling results showed a stratographic thickness of 16.7 feet that averaged .7% copper and 1.78 opt silver.
Detailed work plans are under development, pending acquisition and study of prior exploration data.

PCM.V PAOCF.PK (PAC COMOX RES)
http://www.pacificcomox.com/
66 mil fully diluted Jan, 2004 (From Dec 11, 2003 press release and 2002 report)
@ $.07/share Cdn x .76 US/Cdn = $.05
$3.5 mil MC
Company Reports that A. C. A. Howe International has been Contracted to Prepare a Resource Estimate for the 6 Areas of Drill Intersected Gold/Silver Mineralization on the Mabel Property

BGS.V BLDGF.PK (BALLAD GLD SLVR)
http://www.balladnet.com
16.3 mil shares outstanding
(fully diluted?)
@ $.25/share Cdn x .76 US/Cdn = $.19 US
$3 mil MC
Bonanza grade “grab samples” in southern Argentina near IMA.
32 oz./T gold and 22 oz./T silver grab samples.

ASLM.PK (AMER SILVER MINI)
2.75 million shares issued
@ $.85/share
$2.3 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)
http://www.bmts.bc.ca/bbr/
17.2 fully diluted
@ $.165/share Cdn x .76 US/Cdn = $.125
$2 mil MC
Silver projects:
Yukon –grab sample of 611 g/t Ag
Argentina –samples from 31 to 5640 g/t Ag

ROK.V ROCAF.PK (ROCA MINES INC)
http://www.rocamines.com
14.3 mil fully diluted (July 15, 2003)
@ $.22/share Cdn x .76 US/Cdn = $.17
$2.4 mil MC

MTB.V (Mountain Boy Minerals Ltd)
http://www.mountainboyminerals.ca/
TEL: (250) 636-9283
11.6 mil shares fully diluted (Dec 1 2003)
@ $.28/share Cdn x .76 US/Cdn = $.21
$2.5 mil MC
http://www.stockhouse.ca/news/news.asp?newsid=1933880
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)
@ $.20/share Cdn x .76 US/Cdn = $.15
$1.7 mil MC

CBP.V CPBMF.PK (CONS PAC BAY MIN)
http://www.pacific-bay.com/
Guilford Brett, IR (604) 682-2421
9.2 mil shares outstanding
@ $.10/share Cdn x .76 US/Cdn = $.08
$0.699 mil MC

–CBP.V is the smallest market cap silveer stock that I know of. $699,000 Market Cap? 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.

http://www.canasil.com/

* PDO.V (PORTAL DE ORO RS) (I own shares)Portal Resources Enlarges Arroyo Verde Project, Argentina – CCNMatthews

http://www.celticresources.com/

Grand Central Silver Mines Inc (GSLM.PK)
Malachite Resources MAR.AX
http://www.malachite.com.au/

Mascot Silver Lead Mines MSLM.PK
http://www.mascotsilver.com/
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

Mineral Mountain
Coeur d’ Alene, Idaho

Metropolitan
Coeur d’ Alene, Idaho

Independence Lead
Coeur d’ Alene, Idaho

Silver Bowl
http://www.silver-bowl.com/
Coeur d’ Alene, Idaho
–working to get a new stock transfer coompany

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)
(801)-281-5656

EZM.V EZMCF.PK –removed, primarily a zinc/copper base metal miner, not silver.

Andean American Mining Corp AAG.V ANMCF.PK
http://www.andeanamerican.com/
–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
http://www.umpqua-watersheds.org/local/mine.html
(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,

Osburn
Wallace
Silver Valley Resources
United Mines
APNE
ALS
Royal Silver Mines (RSMI)
Bunker Hill ?
Nabob
New Era
Sidney
Signal

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:
http://www.bibleprophesy.org/SilverStockExtra.html

Blanketpower’s Mining Links for Investors
http://www.blanketpower.com/mining/titlepage.htm

http://minersmanual.com/
—
http://silverminers.com/
http://www.silverseek.com/
http://www.gold-eagle.com/silver_section.html
http://www.gold-eagle.com/silver_section/reports.html
http://www.dailyreckoning.com/ Bill Bonner is the author of a free daily market commentary newsletter.

For information from the SEC on how to protect yourself from a “pump & dump” scam, see
http://www.bibleprophesy.org/SilverStockExtra.html

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.

Jason Hommel
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: ASM.V, CMA.V, PLE.V, PDO.V,AUN.V, EDR.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