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-- Posted 20 April, 2004 | | Source: SilverSeek.com
FRIDAY, April 16th, 2004
This week's report lists 102 silver stocks. There are 30 silver stocks that list reserves, resources (and exploration potential.) which I calculate by using my "ounce in the ground" forumula. There are 48 explorers. There are about 24 additional "silver" stocks with incomplete information. Additions & Changes from last week are in bold.
If this is the first time you have seen this report, please try to read the entire report before sending me an email. This report goes out now to over 8900 investors each week in email.
If you are an Accredited or Sophisticated investor and want information I may find out about private placement opportunities in some of the very best silver stocks in my opinion, (This is not a solicitation for any stock, and I'm not brokering any securities) email me with PP in the subject field: jasonhommel@yahoo.com
If you want to receive an email notice of when and where this FREE weekly report is published, sign up at GoldIsMoney.com Anyone who signs up will also get a FREE e-book that explains the bullish case for gold and especially silver. If you have studied the silver market at all, then the time has come that you ought to be a teacher, and you ought to explain the silver story to all who will listen. GoldIsMoney.com is designed to help spread the word. I suggest you email the link to your address book.
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 $7.12/oz. as of Friday, 2:15 PM West Coast US, which was used to calculate the following figures. The CAN $ / US $ conversion factor is .7435. I will use .74 for ease.
How to read the following table:
Stock Symbol that works at Yahoo! Finance (Company name) / Silver oz. "in ground" for 1 oz. silver's worth of stock. / valuation price change since last week relative to silver price change (and stock dilution, and resource changes, if any) / additional comments (EXPT is "exploration potential")
Due to silver moving down so much this week (12.5% down), if a company did not move down as much, then, relative to the silver price, the company is "up", even if the share price, in dollars, is down. All companies that are "down", were down more than the silver price was down.
- ABX (BARRICK) 1 down --infamous hedger (18 mil oz. gold hedged, 3 yrs production) hedged?
- IPOAF.PK (INDUSTL PENOLES) 1.5 down --current producer, mostly family owned, hedged?
- CDE (COEUR D'ALENE) 1.3 even --current producer, (gold bonus) in debt.
- SIL (APEX SILVER) 3.7 down --large zinc bonus, low grades, cash rich--$345 million! in debt
- CFTN.PK (CLIFTON MINING) 3.5 up -- (84 EXPT) (colloidal silver patent bonus)
- GRS GAM.TO (GAMMON LAKE) 3.7 up --current producer, owns 26% of Mexgold
- FSR.TO FSLVF.PK (FIRST SILVER) 4.2 up --current producer, (not profitable '03 3rd q.) unhedged
- MFN MFL.TO (MINEFINDERS) 4.5 up --significant gold bonus, $35 mil cash on hand.
- KBR.V KBRRF.PK (KIMBER RSCS) 4.5 up A one property company, high grades, with exploration potential.
- PAAS (PAN AMERICAN SILVER) 5.5 down --current producer, in debt.
- * TM.V TUMIF.OB (TUMI RSCS) 6.1 down -- (12 EXPT) recent bonanza grade silver discovery
- WTZ WTC.TO (WESTERN SILVER) 7.0 down -- (24 EXPT) large mine development cost. copper & zinc bonus
- HGM.V HOGOF.PK (HOLMER GOLD) 7.1 down --silver project in cuba, large gold project bonus.
- MGR.V MGRSF.PK (MEXGOLD RSCS) 7.1## up (##exploration target) -- bonanza grade discovery on Jan 13th
- ORM.V OREXF.PK (OREMEX RES) 8.0 up (34 EXPT)
- SSRI SSO.V (SILVER STD RSC) 8.3 down --multi-property company, understands silver story
- CZN.TO CZICF.PK (CDN ZINC) 8.9 up --large zinc bonus, high grades, low start up costs, great EXPT
- SRLM.PK (STERLING MINING) 15 up --(40 EXPT) acquired the Sunshine in Cour d'Alene
- RDV.TO RDFVF.PK (REDCORP VENTURE) 17 even --60% gold bonus
- FAN.TO FRLLF.PK (FARALLON RSCS) 17 up --(29 EXPT) low grades, silver 1/3; also gold & zinc bonus.
- * MGN (MINES MGMT) 19 up --60% copper bonus (low grades), start up cost ~ $250 mil
- HDA.V (HUSIF?) (HULDRA SILVER) 20 even --very tiny, no debt, zinc bonus, low start up costs.
- ADB.V ADBRF.PK (ADMIRAL BAY RSCS) 20 up --actively expanding resources. (Huge gas bonus)
- EXR.V EXPTF.PK (EXPATRIATE RECS) 21 down --significant zinc bonus 60% zinc, 25% silver
- * PLE.V (PLEXMAR RES INC) 22 down
- CHD.V CHDSF.PK (CHARIOT RSCS) 22 up (explorer, with inferred resources)
- GGC.V GGCRF.PK (GENCO RESOURCES) 23 down
- * SVL.V STVZF.PK (SILVRCRST MINES) 24 down --(39++ EXPT) --(Silver in Honduras) ++
- ASM.V ASGMF.PK (AVINO SILV GOLD) 25 up --owns 49% of the Avino +4 other silver props. (silver bonus)
- UNCN.OB (UNICO INC) 52 up --lease expiring on largest property, June 1 2004.
* = I own shares
Explorers (by market cap, in millions):
- HL (HECLA MINING CO) .31 down --current producer (gold bonus) cash rich.
- * IMR.V IMXPF.OB (IMA EXPL)
- EZM.V EZMCF.PK (EUROZINC MINING)
- CDU.V CUEAF.PK (CARDERO RSCS) 44-74 "exploration potential"
- AOT.V ASOLF.PK (ASCOT RSCS) -- owns percentage of Cardero, CDU.V
- MCAJF.PK (MACMIN LTD)
- * FCO.TO FCACF.PK (FORMATION CAPTL) Cobolt (and Sunshine silver refinery)
- * MMGG.OB (METALLINE MINE) --zinc/silver (historic high grade silver) (low cost revolutionary oxide zinc process)
- TVI.TO TVIPF.PK (TVI PACIFIC) --current producer of a dore silver bar 96% silver, 4% gold
- * FR.V FMJRF.PK (FIRST MAJESTIC) -- Bought a former silver producer. Acquiring silver properties.
- * NPG.V NVPGF.PK (NEVADA PAC GOLD) 34-173 "exploration potential" (owns 1 silver property, 10 gold properties)
- SPM.V SMNPF.PK (SCORPION MINING)
- MAG.V MSLRF.PK (MAG SILVER)
- IAU.V ITDXF.PK (INTREPID MINRLS) 7 "exploration potential"
- * OTMN.PK (O.T. MINING) very large exploration potential
- ECU.V ECUXF.PK (ECU SILVER MINI) 4.1 down --(11 EXPT) --50% gold bonus
- CAUCF.PK (CALEDON RES)
- MMM.TO MMAXF.PK (MINCO MINING)
- MAI.V MNEAF.OB (MINERA ANDES) (gold bonus)
- * EDR.V EDRGF.PK (ENDEAVOUR GOLD) A PRODUCER (I could not yet find a listing of resources or reserves)
- BZA.V ABZGF.PK (AMER BONANZA)
- DNI.V DMNKF.PK (DUMONT NICKEL) exploring Clifton's property
- EXN.V EXLLF.PK (EXCELLON RSCS)
- BCM.V BCEKF.PK (BEAR CRK MINING)
- NJMC.OB (NEW JERSEY MIN)
- * CMA.V CRMXF.OB (CREAM MINERALS) 144 "exploration potential"
- * KG.V KDKGF.PK (KLONDIKE GOLD)
- * CBE.V CBEFF.PK (CABO MINING) --Historic Silver and Cobalt district
- SML.V SMLZF.PK (STEALTH MNRLS)
- NBG.V NBULF.PK (NEW BULLET GP) 42 - 115 "exploration potential"
- SDR.V SDURF.PK (STROUD RSCS)
- CHMN.PK (CHESTER MINING)
- EPZ.V ESPZF.PK (ESPERANZA SILVR)
- GNG.V GGTHF.PK (GOLDEN GOLIATH) --Historic silver district in Mexico
- MMG.V MMEEF.PK (MCMILLAN GOLD)
- SHSH.PK (SHOSHONE SILVER)
- * KRE.V KREKF.PK (KENRICH ESKAY)
- EGD.V EGDMF.PK (ENERGOLD MINING)
- PCM.V PAOCF.PK (PAC COMOX RES)
- LEG.V LEGCF.PK (LATEEGRA RSCS)
- BGS.V BLDGF.PK (BALLAD GLD SLVR)
- * AUN.V AUNFF.PK (AURCANA CORP)
- SRY.V (STINGRAY RSCS)
- TUO.V TEUTF.PK (TEUTON RES)
- ASLM.PK (AMER SILVER MINI)
- BBR.V BBRRF.PK (BRETT RES)
- ROK.V ROCAF.PK (ROCA MINES INC)
- CBP.V CPBMF.PK (CONS PAC BAY MIN)
* = I own shares
Silver oz. "in ground" means and counts all "silver oz. in the ground" as the same, but they are NOT EQUAL. Some are more certain and others are more speculative. Some are higher grades, some are lower grades. They range from most certain to least certain such as: "proven & probable reserves," "measured, indicated, inferred resources." This single number next to each stock symbol above represents the approximate number of ounces of silver in the ground you are buying title to when you invest the equivalent of one ounce of silver into buying shares in the company at current prices. Here's the math on how to get it. 1. Get a market cap in U.S. dollars. Divide that by the silver price, so the market cap is denominated in terms of silver ounces. Then, divide the ounces in the ground by the market cap as denominated in silver. This tells you how many ounces of silver in the ground you are buying when you give up one ounce of silver in you hand for shares of stock, instead.
(It does not include zinc, or copper, or lead, but it does include gold at a 1:10 ratio of gold:silver.) At goldsheetlinks.com, they add 100% of proven & probable reserves, but only 70% of measured & indicated resources, and only 50% of inferred resources. I don't do that. I count them as all the same.
To quickly "tab" down to the company you are interested in, note the symbol. Then hit "control-F" to "FIND" the symbol below.
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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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WEEKLY COMMENTARY (All new in this section):
Next weekend, April 24-25, I'm heading to the Calgary Calgary Resource Investment Conference. http://www.cambridgehouse.ca/ I decided to go at the last minute, because I was unsure if I would be able to travel to Canada without a passport, due to the new Patriot Acts. I don't have a passport because I don't use a Social Security Number, and without a number, I don't even know if I can even get a passport. But I can travel to Canada, and return to the U.S.A. if I have a driver's license, a birth certificate, and a second form of ID such as a Credit card, all of which I have. So, I hope to see many of you in Canada next weekend.
Because I will be traveling on Friday, and gone all weekend, I will be unable to produce this free weekly report next week. It takes me about 5-7 hours to calculate all the figures by hand each week, not including the time to write commentary, and update company information.
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My marketing efforts are working. And because this weekly report has an interested audience, I'm able to go out and spend money to advertise it, and I'm able to spend money to make it better. One of the things I am planning to produce is a real time summary of this list. They will be updated in a 20 minuted delayed quote or real time basis, instead of just once a week like now. One list will be ranked by my "ounce in the ground" formula, and the explorers will be ranked by market cap. I do not yet know how long until I can get that up and running, but it's one of my goals.
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This past week, silver has been volatile in price, yet, I am now more bullish on silver than ever.
One of the reasons it is so important to avoid futures contracts is to be able to survive the wild changes in price. If you own physical silver, paid in full, you really do not need to care about the major price swings, because they cannot hurt you. You have not lost a single ounce of silver in your possession. If you own a futures contract, you get a margin call when prices go down, and you may end up having to pay more than you can afford, and thus, losing your entire investment.
Volatility helps the shorts, in more ways than the obvious, which is that they MAY get a chance to cover when the prices go down. Volatility also serves the manipulators with another big purpose: to confuse and scare people away from investing in silver. People do not understand why big price swings will occur, and thus, they will be more likely to say to themselves, "I do not understand silver, and thus, I will not invest in what I do not understand."
The other way volatility scares people away from silver, is that it makes silver seem "unreliable", or "untrustworthy". After all, how can you plan on what your silver should be worth if the price is rapidly moving all over the place?
But the real truth is that silver is reliable and trustworthy, as is gold. It is paper money that is untrustworthy.
The rapid price swings of the metals tend to make people forget that. But are the metals changing in price, or is it the dollar?
Let's consider the way prices are quoted. Dollars per ounce. Everyone focuses on the change of the price of the metal, in terms of dollars. It's as if the metal is changing in price.
But what if prices were quoted in terms of ounces of silver per dollar? Well, of course, then the tendency would be to think that the dollar is changing in value, as measured by the silver!
Look at the following. We saw prices for silver change from a low of about $4.20/oz. to a high of about $8.40/oz, to move back to $7.20/oz by Tuesday. Thus, we think in terms of dollars, since it is the number of dollars that is the important factor.
But imagine if the dollar/silver ratio were quoted in terms of ounces per dollar? The other way to quote the price is simply the inverse. Really, the ratio is the same. Hit the (1/x) button on the Windows scientific calculator to get the inverse.
Instead, prices would be quoted as follows: We saw prices of the dollar recently at a high of .238 ounces of silver per dollar, and then .119 ounces of silver per dollar, and then, prices moved back a bit to .139 oz./dollar.
From this perspective, we are more likely to think in terms of the dollar that is changing in price as denominated by silver, and it is not silver that is changing price!
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Typically, the short sellers massively increase their paper short positions that cause the price to move down. This causes the open interest to go up, as more paper contracts are created. The shorts do this in the hopes of scaring the paper longs into selling. What ends up happening next is that the paper longs get scared, and they end up selling... to the paper shorts. Thus, the paper shorts typically end up covering at least some of their obligations, perhaps 20-30% of their contracts at a lower price. And thus, what we see is a decline in the open interest at the bottom, as the short sellers make profits.
Ted Butler has been reporting this repeatedly, as it has happened as silver moved in the range from $4-$5/oz. as evidence of the ongoing manipulation, and if you think about it, this is the way the markets would be manipulated. By temporarily causing a dip in the price with more contracts available, it typically causes longs to "run scared" and sell.
There are two reasons the paper longs are led to sell. First, they are typically momentum players, and when they see the price going down they may change from long to short. Second, the greedy and leveraged paper longs may receive a margin call, and thus be required to put up more dollars in order to hold on to their paper position. If they cannot afford the margin call, due to over extending themselves, then they are forced to sell, whether they want to or not.
This week, this has not happened. The open interest has stayed the same. I do not know, short term, whether this is bullish or bearish. Perhaps the shorts will pile on harder to drive the price down, and in the process cause the open interest to go up, and thus, increase their risk if prices end up going up. Perhaps the shorts will be able to drive the price down further, perhaps not. Perhaps at a lower price the paper longs will give up and turn sellers, perhaps not. Perhaps a lower price will not ever come.
At this point, all is good. The open interest has essentially remained constant. At this point, the shorts have not yet covered. When the shorts do cover, they will drive the price wildly higher than it is today. Thus, the fireworks for the silver price have not yet started.
My opinion is that this price drop has not yet worked to cause the longs to sell, as it has not yet caused the open interest to go down.
I would have expected Ted Butler to cover this in his weekly commentary, but so far, he didn't. Instead, he focused on something else, something more important. He pointed out the relative prices for silver are much lower as compared to gold and copper. I think it was very important for him to point this out, as I was unaware of this bullish argument for silver. Well done, Ted, for bringing to light this unique perspective! You can read Ted's latest, at: http://www.investmentrarities.com/
Now, I want to move back to how the paper shorts influence the price, as it is fundamental to understanding the silver market, and helps you to understand why the price of silver remains so cheap.
The silver price is largely set by the futures contracts, because if a coin dealer trusts that he can receive silver in the future, at a set price, then he will be more willing to sell silver today, at a price very near to the future price. Thus, endless promises to deliver silver in the future can have just as harmful effect on the price of silver as if real silver were being sold into the market... as long as people trust the paper shorts to deliver the silver.
As we know, the shorts are the large, very wealthy, commercial dealers. Many of my subscribers warn me, "don't fight the commercials". But, in the end, the issue will not come down to promises, the issue will come down to who can fulfill their promises. Do the shorts actually have the silver or not? If they don't, and if they default, then the silver price will skyrocket, and the paper shorts (with near infinite cash but no silver) will have to buy the silver on the open market at an ever higher price.
Some people are scared of the paper shorts, because they think they have endless money at their disposal. Of course they have endless paper dollars at their disposal, but that is not real money. That is monopoly money, and is fraud. Yes, they have endless fraud at their disposal. But they do not have endless silver at their disposal. Silver is money. If you realize, as I do, that silver is money, then you will realize that if they do not have silver, then they are BROKE, and BANKRUPT. A broke and bankrupt entity cannot influence and manipulate markets forever. The game will end when they run out of physical silver. Silver is money, and gold. Paper money is nothing but pieces of paper with numbers on it.
I have written in the past that I think the coin dealers are heroes, because I see that the current prices and situation in the precious metals markets must end in default. The default may financially wipe out certain coin dealers. Imagine yourself as a dealer for a moment. You take an order over the phone. The person says they will send you a check. Let's say you will protect yourself as a dealer, and not even lock in the price until AFTER the check clears. (But most dealers will lock in the price on the day you send the check, well before it clears.) Then, the dealer will place an order from a larger dealer to get you your silver. (What? You didn't think the dealer would sell you HIS silver did you? Of course not. See, the dealer sells you silver, at the current price, only if he can order more silver at that same price, or lower, than the price he sold it to you. The dealer can only stay in business, and make money, on the spread between your price that you bought from him at, and his lower price where he can buy at.)
And every dealer has to, by nature, deal with a larger dealer. That's the nature of the business. But what if the largest dealers are the biggest crooks, and do not have the silver, but are short, and are only "large" because they have plenty of paper money? Perhaps they can sustain paper losses for a time, but not when silver prices rise too fast.
So, eventually, there will be a default. And who will be defaulted on? Probably both the dealer, and the customer who places the order.
This is why the safest way to buy physical silver is with cash, in person, from your local coin dealer that you find in the yellow pages. And if you clean him out and buy all his silver, then it is likely worth your time to contact the coin dealers in the nearest, largest metropolitan city, and call around and ask to see who has enough physical silver to satisfy your order. There is nothing safer than physical silver bullion in your possession, and there is nothing safer than paying for your silver at the time you take delivery. Any other arrangement is a promise. And the entire reason to sell paper, and buy silver, is that you are rejecting the promise, and you are demanding payment in full.
I sincerely believe it is worth paying a small percentage more for your silver from a local dealer than from a dealer over the internet, because when you take delivery in person, there is no default risk. Your local dealer is a hero. If he takes your paper cash, and gives you bullion, he takes on the default risk. Patronize his business. Nevertheless, I do list several places on the internet where you can get silver, and I do this because I have ordered from them, because I do not have access to any local dealers in Sacramento, or San Francisco, or Reno, who can fulfill very large orders in size out of personal inventory. Again, this goes to show how tiny the silver market is, and how little silver bullion there is left available.
Because of my position as a writer on the internet, I have people who email me their horror stories of not being able to obtain silver bullion. They say they place an order, give away their money, and then, the dealer does not ship the silver soon enough... or, they sell the silver, and the dealer does not ship the money soon enough. I do not know whether these stories are true or not, and because of my position, I feel I cannot report such complaints that name a specific dealer. I do not know whether such stories are true, I do not know whether the person wants to stand by their complaint.
According to my religious understanding of complaints, they should be settled in a court, and at the testimony of two or three witnesses. It is not my place to spread unsubstantiated allegations against particular bullion companies that may be in trouble financially.
All I can say is that I have been receiving more complaints against dealers lately, and questions about whether certain dealers are financially stable, and I have no reason to suspect that such complaints are fraudulent. (But in case they are not true, I have to protect myself, and not issue statements which may be libelous or slanderous.) All I can say is, protect yourself by getting silver bullion from your local dealer, and be ready to pay an additional 3% more than the best price quoted on the internet, just for the ability to get silver, "default free."
Remember to negotiate. If your local dealer's price is too high, and if he will not negotiate his price to a level you will find acceptable, then consider running a newspaper ad in your local paper, offering to "buy silver", and compete with him! Remember, everything can be negotiated! You may be able to buy silver at 10-20% under the spot price from your neighbors who want ready cash. Simply run an ad that says, "BUYING SILVER. PAYING TOP DOLLAR. Call 1 555 XXXX" I had a friend do this who lives in a large metro area, and he got ten calls in a few days (many from people who just wanted to talk), and it more than paid for the $170 ad. He got one guy who was willing to sell 10, 100 oz. bars at a dollar under the spot price. That's a savings of $1000 under the spot price, and you will usually pay at least 30 cents over the spot price if you buy 100 oz. bars from a dealer! Yes, you will be paying "top dollar" if you offer from between 3.5-4 times face value for 90% junk silver coins that sell for up to 5.5 times face value.
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Here is a letter sent to me:
First I want to thank you for your brilliant, dedicated research and your
efforts to spread the word regarding gold and silver.
I guess I am a rather new comer to the acceptance of gold and silver as
one of the best places to have one's money. It took me awhile because I
saw gold bugs buying back in the late 80s when gold was $440. They missed
out on other investment opportunities, and even in with this current gold
bull market, they have yet to recover their investment.
I bought gold in December of 2002, and started acquiring silver in
November of last year. The person I bought some 90% silver coins from
signed me up for your weekly silver letter. I have been studying what
you, and others, have to say, and I'm convinced that you all are right —
silver is one of the best (possible the best) investment opportunities
now.
Recently you said that if a person really believed in silver, he should
be 100% invested in it. Again, I agree with you. Since our house is paid
for, a large portion of our net worth is tied up in home equity. To get
at that with out having to sell the house, we are getting a line of
credit against the equity. I know you and apparently most of your
readers, believe that being in debt, is not good, but other than selling
the house, I can think of no other way to leverage the equity of our home
and invest it in silver. I don't like being in debt, but I believe that
silver is going to go sharply higher in price, and if I don't take out a
loan at prime plus ¼ percent, I will miss out on it. Do you think taking
out a loan against the house and investing in silver is a smart
move?
You asked how people are invested now. I have about 12% in gold, about
10% in silver, 13 percent in cash in a brokerage account and the rest in
the house. I'm not including our IRAs, or my wife's 401k.
I want to buy bullion with the money from the line of credit on the
house. I believe that real estate is nearing the top of its values. I
think that bullion would be safer and easier to sell to pay off the loan.
I will not use all of the loan, but keep a bit back to use to make the
interest only payments. I would like to have some investment in stocks,
so I will use money in the brokerage account for that. One that I like is
an opportunity for Excellon. They have a "silver
unit" investment. Each unit is $1,100 and would be repaid in
three years with 200 ounces of silver. It also includes 1,000 warrants to
buy the stock for .325 Canadian dollars. What do you think of this
investment?
This past week, you spoke of the difficulty in investing your money in
some of the silver mining stocks. Many are low cap thinly traded
companies and as you say, your own buying can drive their price upward
away from you. It would seem that when the time to sell came, the same
could apply, only then it would drive the price downward away from
you.
I realize that if I buy the right stocks, there is a chance of much
greater appreciation than on the bullion alone. Of course, stock trades
will always be taxable, but bullion could be sold, and no tax
consequences recognized. Not that I would do that of course. (The
appropriate disclaimer.) But buying the right stocks can be tricky. I
notice in your fantasy portfolio, you have done very well, but there are
some losers, and had you invested that portfolio in silver bullion, you
would have done about as well.
I should mention that at 61 (closer to 62) I am much older than you, and
don't have the time for any mistakes. Not that anyone wants to make them,
but a young man has time on his side to right those wrongs. Even with all
the studying I can do, along with following the experience of folks like
you, I will likely have my money in some stocks that will not appreciate
as much as the metal. If we are both right about the underlying premise
for investing in silver, I will make money on bullion. I can buy and
sell, and the amount of money I have to invest will have no effect on the
price.
Your idea that silver companies should use their cash on hand to buy
silver bullion was brilliant. I hope they will take your advice. I am
telling people I know about silver and encourage them to read things that
people like you and Ted Butler have to say about it.
I did send you and e-mail saying that I would be interested in private
placements. I guess I need to take some risks in the stock market to get
higher yields, but I think that to have the most of my assets invested in
physical silver makes the most sense for me. What do you think?
Again thank you for all you are doing to spread the truth.
XXX XXXXXX
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“Liberties surrendered to the state are like objects in space that fall
into a black hole — they are gone forever.”
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Here is my response to that letter:
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[My comments about Excellon deleted.]
I think you are right that you should have most of your money in
physical silver.
My stocks are all in an IRA account, so they also appreciate, "tax
free".
I would recommend that you sell your house, and rent. This way, when
housing prices collapse, you will not have to "walk away" from, or
default, on your mortgage. Also, you would not want to pay it back in
full, even in silver, if your house was worth much less.
Example: Your house is worth $200,000 today. So, you take out a
$100,000 equity line, and put it in silver. So, then, your house goes
down to $100,000 in value, and your silver goes up to $200,000 in
value.
Fine? Not really, you just lost how much??? $100,000 in home equity,
and to pay back the mortgage in the panic with silver gains,
you lose 1/2 of your silver, which is
1/2 of what you could have had if you sold in the first place.
End result, you own your home again, paid off the loan, and have
$100,000 in bullion at $15/oz.
Option B:
However, if you sold your $200,000 home, you could buy $200,000
(nearly) of silver bullion, which grows to $400,000. In the meantime,
you rent... You never lose home equity, and you have 4 times as much
silver at $15/oz, which is still just the start of the rally.
Eventually, silver moves up beyond $150/oz, and you have $4 million. Then, you
buy back about 3-4 homes at $50,000 each, and you still have a
fortune in silver..
I'd choose, and strongly recommend, option B.
Never keep overvalued assets. Sell them. Very basic.
--Jason Hommel
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Because I have a market reach, I also receive a lot of tips about silver stocks. And thus, I believe I may have invested in some of the best ones that came my way. If you believe I may have an edge based on my work and position... then the best way for me to share this with you is to is tell you where I put my money. It's not investment advice. I offer a monthly "look at my portfolio". Try it for a month, and see if it works for you. I do not issue recommendations, and I don't list number of shares or the size of my portfolio, but I will show the top investments in my portfolio, by rank, updated monthly.
I just raised prices recently to the following:
Price: $39.95/monthly, or $49.95 for a single month, or $295.00/year
To order: Click here
If you have any questions about billing or order fulfillment, you need to contact my support staff at support@goldismoney.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. We finally got a toll free telephone customer support line. 877-895-6824.
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General Commentary on Silver (slightly modified from last week):
See my article: Biblical Guidelines for Managing your Money
As the New York Times, January 11, 1859, page 2 said---
"It is well known that the most colossal fortunes the world ever saw have been based on silver mines..."
--quote found by Charles Savoie
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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.nh-inews.org/
http://veritasradio.com/
Current status of the NH bill:
The bill will live until the November elections. It'll have a different #,
but we now have 6 months or so to get EVERYONE we need on board.
Thanks to you for your efforts. Now, the fund raising part begins
so we can take it to the other states ! More on that later.
For now - V I C T O R Y is in sight !
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WHERE and HOW to BUY SILVER BULLION
http://www.goldismoney.com/buy-gold.php
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?
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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 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
Sign 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. So few investors understand value. If people knew the facts and used their brains, the available above-ground refined silver would be gone by tomorrow, and the price would be well over $20-50/oz. But don't trust me, follow the urls and check the numbers:
1,000,000,000,000: 1 Trillion dollars
1,000,000,000: 1 Billion dollars
1,000,000: 1 Million dollars
$33,000,000,000,000: World bond market yr end, '01: http://tinyurl.com/vr7u $20,200,000,000,000: U.S. bond market, yr end, '02: http://tinyurl.com/vr7g $11,700,000,000,000: U.S. stock market, yr end, '02: http://tinyurl.com/vr7g $11,038,000,000,000: U.S. annual GDP, 3rd q.'03 est. http://tinyurl.com/vr9y $8,879,000,000,000: M3 (money in the banks) Nov. '03 http://tinyurl.com/vra0 $7,001,312,247,818: US debt, 12-31-'03 http://tinyurl.com/bbp $2,360,000,000,000: U.S. annual budget 2004 $1,860,000,000,000: World gold, 145,000 T @ $400/oz. http://tinyurl.com/vrcc $554,995,097,146: U.S. budget deficit, ending fiscal year, 09/30/'03 http://tinyurl.com/bbp $272,000,000,000: Market Cap of Microsoft (03-2004) http://tinyurl.com/vrcn $180,000,000,000: debt of Ford Motor Co. (03-2004) http://tinyurl.com/vrd1 $104,400,000,000: US gold, 261 mil oz., @ $400/oz. http://tinyurl.com/vsr9 $100,000,000,000: all the world's gold stocks (estimated?) $7,090,000,000: all the world's silver stocks (59 of them on this list, as of Dec. 5th, 2003) (Perhaps $10 billion by April?) $363,000,000: 51 mil oz. of registered COMEX silver @ $ 7.12 /oz. http://tinyurl.com/vrcw
So, what do all those stastistics mean?
For a while I was using M3 and dividing that by the US gold (261 million ounces), which implies the us dollar is 84 times more valuable than it should be, and that gold should hit $34,000/oz. after the fraud is destroyed. Today, I realize I need to add in the Bond market, because bonds are an asset class designed to siphon away and replace real money, which is to say, gold. This gives a price of about $111,111/oz. for gold. At $ 430/oz, this implies that US bonds and paper currency are 258 times more overvalued than gold.
Gold is overvalued relative to silver, because at current prices, it takes 54 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 54 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 54 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.
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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 "
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And the fund investors who buy paper silver futures contracts instead of real silver are a very odd bunch of fools, for they should realize that nobody can deliver the 800+ million ounces of silver promised in the paper contracts and options that does not exist. It's like the paper longs are betting on the bank run happening, but they all are making sure they get at the end of the long line. Instead, they could go front and center, where there is an open window available where you can go and get physical silver, and nobody is there. Idiots! If you know a bank run is going to happen, and you are actually willing to bet on it, then go and withdraw your money before it is too late! Don't bet on it happening, which, if it does happen, your contracts will be defaulted on! Amazingly blind idiots. Wake up!
See also my prior essay, "The Moral Failures of the Paper Longs"
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How bullish am I on silver? Here's an interesting way to put it: "54 times infinity" dollars per ounce.
I believe the dollar will eventually be destroyed, likely within my lifetime, hence the "infinity" part. I believe the ratio of silver to gold may be equal during a spike, when the market realizes that above-ground refined silver is more rare than gold. Thus, silver may outperform gold by a factor of 59 times better. Currently, the ratio is 54 ounces of silver can buy one ounce of gold or 54:1.
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.
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For a list of bullion dealers:
http://www.goldismoney.com/buy-gold.php
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".
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This is a list of primary silver stocks.
I count a company's ounces of gold as 10 oz of silver. Why? Because I have a very strong positive bias in favor of silver over gold.
Given my bias in favor of much, much higher silver prices, then, to me, the grades of silver are far less important than buying more oz. in the ground. More oz. in the ground at a lower cost is the most important consideration for me.
My method is simple. Cost per ounce in the ground. How much do you get (silver reserve totals), and how much does it cost (market cap)? The cost is the market cap divided by the silver reserve totals. Cheaper is better. Buy low, sell high.
Disclaimers, Warnings, and Advice: I have gathered the information below over the course of several months. I believe it is accurate to the best of my ability. I may have made mistakes. I probably did. I'm human. I have collected the information from public sources such as company web sites and public information found at yahoo.com to get the stock prices. This report in no way guarantees the accuracy of the information below, since the information may change at any time. The number of outstanding shares can change as a company engages in new share issues to raise more capital through private placements, or if outstanding warrants (and options) are exercised and converted into shares, or if shares are bought back. Shares can be consolidated, or split. The number of ounces of silver in the ground can also change, as these are often only estimates. The number can also change up or down, depending on drilling results.
This report is not investment advice. This report contains information that may or may not be up to date, and may be inaccurate. I urge you to contact the company and do your own research to verify the information contained in this report.
This report is not an offer to buy or sell any securities. I am not a broker. Only your broker can buy or sell securities for you.
I urge you to consult with your investment advisor to determine whether these kinds of investments are right for you.
I also caution you to be aware of your investment advisor's advice, they are sometimes paid to push things like mutual funds, bonds and other securities that may not be in your best interest to buy. Some investment houses are short physical metal, and thus, they may attempt to strongly discourage you from buying precious metal or precious metals investments. I believe that the propaganda machine in support of frauds such as bonds and the dollar is so strong, that they may even believe what they say when they give bad advice to avoid the safety and protection of precious metals. It is most likely that they simply do not understand the precious metals market as well as you do.
All total estimates of "ounces in the ground" can vary widely. There are "proven and probable reserves" which are the highest category of certainty which is obtained through many drill holes, and then at the least accurate, there are "inferred resources" which are hardest to estimate. Additionally, every miner always has "more silver properties that need to be explored, which probably contain more silver". For the purposes of this report, I have added all those numbers together. It is believed that all these "ounce in the ground" estimates can be profitably mined at $5-6 per ounce silver, or lower. Thus, I believe that when silver trades for $15/oz. or above, that all of these ounces can be mined at a substantial profit.
I may be wrong. (I probably make mistakes in every article, and there have been updates and corrections made each week, especially as prices change.)
Mining is a risky business. You need to be willing to sustain a total loss of your investment for various unforeseen accidents. Silver stock companies can do stupid things to shareholders such as take on debt, or issue more stock at too low prices which reduces the percentage of the company you may own (dilution). Yet, they need to issue shares to raise capital for drilling, and then an even bigger dilution to build a working mine. They may sell YOUR silver too cheaply, or worse, hedge the price of YOUR silver just as it begins to go up if they lock in a price which then proves to be too low if the dollar is destroyed. Mining is a risky business as estimates of assets in the ground can change. There is political risk and environmental risk. They can't franchise the business, are stuck in one location, are subject to government confiscation, or taxes, or union wage negotiations, and corporate looting.
Do your own research. Be responsible for your own investment decisions. Again, please, before investing in a mining company, call up the company, and speak either with the CEO or the Investor Relations contact person.
So, at the very least, check the company web site, read the annual reports, check my numbers, check my math, and email the company. That's what they are there for, to answer your questions, and to speak about the opportunity of the company. Don't trust everything you read over the internet. I am a biased source. I own silver mining stocks. And I'm not a broker, nor an investment advisor. I'm just a private investor trying to make sense of this crazy world, and sharing my information and thoughts on silver companies.
Surely, there are scammers in the mining industry in the past, and there will be scammers in the future. Remember the fraud of Bre-X. The new 43-101 compliance laws put in place after Bre-X will not prevent a "certified" geologist from lying if he feels lying will create a better payoff. The Bible warns, "trust no man", yet at the same time advises us to "cast our bread upon the waters", and to not issue "false allegations" against others. Physical gold and silver provide the "payment in full" as long as the coins or bars themselves are genuine and not fake.
This report may be copied, and transmitted by other people, and may become outdated by the time it reaches you.
I can't tell you how you should invest your money, of course. The reason is that I don't know how convinced you are of the silver bull market, nor do I know how soon you will be needing the money back, so I don't know how long you can wait to see results, nor do I know how much liquidity you need. Nor do I know the size of the money you have to invest. It is very hard to invest large quantities of money in a small market cap stock.
That being said, my investment strategy seems to be working for me, so far. And so, here is how I have valued the following silver companies to make my own investment decisions.
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(Market cap is always converted to US dollars and denominated in US dollars because I divide by ounces of silver, which are also denominated in dollars)
The Market Cap is the usual tool to value a company. It is what the company "costs to buy" if you could buy the entire company, all the shares, at the latest share price. It is calculated by multiplying the share price, by the total number of shares that the company has issued. In reality, you could almost never buy an entire company at the price of the Market Cap, but only a small portion. Usually, even small buying pressure, such as trying to buy 1% of a company, can push up the price of a stock by up to 10-50% higher. In my reports, I list Market Cap in terms of millions of dollars as "$75 mil MC".
To calculate the Market Cap, I try to get and use the number of "fully diluted shares". A company creates shares when they sell them to investors in what are called "private placements", or "initial public offerings" (IPO). A private placement is done usually before there is ever an IPO. These usually consist of shares and warrants, sold for cash that the company will need to grow and expand.
The "outstanding shares" is the number of shares that exist out there if you count them all, and it does not count the warrants, which are like options. The investor can "exercise the warrants" which is a right, but not an obligation, to buy more shares from the company at the set price of the warrant.
If the company does well, and the stock price moves up, all the warrants will be, or should be, exercised and converted into shares, especially if they become "in the money", and the warrants are significantly cheaper than the stock price.
Now, "fully diluted shares" is the total number of shares, plus the warrants, counting warrants as if they were all exercised and became fully trading shares. I think "fully diluted shares" is a better number to use to calculate market cap than by using "outstanding shares" as most do.
Finally, I go beyond valuing a company based on Market Cap alone; instead, I value a company by dividing the Market Cap by the assets of the company, which are usually the silver reserves in the ground. Thus, I can get a sense of what you are getting for what you are paying. And then, I denominate the whole thing in terms of silver, and not dollars, to get a more constant measure.
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(These first three companies, BHP, GMBXF.PK, and BVN produce a lot of silver, but are way to expensive to buy for the silver exposure for your portfolio.)
BHP Billiton Ltd (BHP)
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.
Compania de Minas Buenaventura SA (BVN)
http://www.buenaventura.com/
NYSE:BVN
- Peru´s largest publicly traded precious metals company
--produces over 10Moz of silver per year
--looks way too expensive for the silver alone: 3.6 Billion market cap.
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ABX (Barrick)
http://www.barrick.com/
535 million shares
@ $21.92/share
$11,727 million Market Cap
5.5 million oz. / year gold production.
--production hedged out for 3 years, or about 18 million oz. (most notorious hedger of the industry, the "leader")
--price of hedges locked in near the market lows, perhaps $340/oz. on average, nobody knows for sure, because Barrick will not say
--reportedly, Barrick is trying to "unhedge".
--reportedly, they plan to deliver 1/3 of production to hedges, which means they will be hedge free in about 10 years.
--the size of the hedge, 18 mil oz. gold, at $400/oz., would be valued at $7.2 billion dollars. At $500/oz, it's $9 billion.
--but they claim to be "debt free", if you ignore the gold they owe for delivery, at locked in, low prices. (only true if gold is not money)
--cash "rich" of about $1 billion dollars.
Silver Reserves reported to be 850 million ounces!
Gold Reserves reported to be 86 million oz. (x 10 = 860 mil oz. + 850 silver = 1710 mil oz. "silver equiv."
$11,727 million Market Cap / 1710 mil oz. = $6.85/oz. silver
You get "approx" 1.04 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: Over the years, Barrick has hedged their production, which many claim has helped to depress the price of gold and silver, by artificially adding to supply. (Barrick's promises becoming the extra supply.) The declining price of the precious metals has put other miners out of business, which Barrick has acquired at low prices. If Barrick goes bankrupt due to their hedges, and rising gold and silver prices, then perhaps Barrick's many properties will, once again, be sold at distressed prices.
Barrick boasts a "cash cost" of $189/oz., for gold for 2003, yet their cash has dropped from $2 billion down to $1 billion. It could be due to the hedging, locking in precious metals prices at low prices, and/or hedge covering that explains the monetary loss in the light of their low cash costs.
About a year ago, perhaps spring 2003, ABX made an announcement about covering 30 million ounces of silver they sold short. Then, a large buyer showed up in the futures contracts for about that amount. I do not know whether, or how, that has yet been resolved.
I believe silver bullion will continue to skyrocket, and I expect silver bullion to continue to outperform ABX stock at these prices.
IPOAF.PK (INDUSTL PENOLES)
http://www.penoles.com.mx
397.5 mil shares outstanding (2002 annual, unchanged since 2001)
@ $5.15/share
$2047 mil MC
419 proven and probable reserves of silver (from 2002 annual report on website)
$2047 mil MC / 419 oz. silver = $4.89/oz.
You get "approx" 1.46 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: Industrias Penoles is the world's top producer of refined silver. They actually derrive more revenue from silver than any other source. But they lost money in 2002.
The word late Feb. 2004 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 believe silver bullion will continue to skyrocket, and I expect silver bullion to continue to outperform IPOAF.PK stock at these prices.
CDE (COEUR D'ALENE)
http://www.coeur.com
coeurir@coeur.com (208) 769-8155 or (800) 624-2824
213 mil shares (Issued 32 mil new shares late Oct. 2003)
@ $5.89/share
$1255 mil MC
cash $38 mil (I think this is an outdated cash figure)
San Bartolome (Bolivia) reserves 146 mil silver
Silver Valley Silver reserves 32 mil silver
Rochester reserves 43 mil silver
Cerro Bayo reserves 3.7 mil silver
Total: 224.7 mil silver
(to Produce 14.6 mil oz. silver in 2003)
$1255 mil MC / 225 mil oz = $5.58/oz.
You get "approx" 1.28 ounces in the ground for 1 oz. silver's worth of stock. (Last week, my calculations for CDE was off by more than 15% for some unknown reason. I had 1.45 instead of 1.28 as it should have been.)
Additional comments: A few weeks ago, CDE announded their intention to try and raise $150 million in the capital markets by issuing shares. http://biz.yahoo.com/prnews/031211/sfth014_1.html
The first week of January, CDE announced a deal for $160 million in convertable bonds! Beware of debt!
CDE continued to lose money in third quarter 2003, a loss of 10 cents/share, and they realized low prices for silver sales, $4.77. I believe they have hedged their gold production at low prices.
CDE looks like they owe both gold and dollars. A double debt warning for CDE investors!
Again, their listing of ounces is in the "reserves" category (more certain) not the "resources" category, which is less certain. They may have "resources" but like HL and Industrias Penoles, they give no estimates.
I believe silver bullion will continue to skyrocket, and I expect silver bullion to continue to outperform CDE stock at these prices.
SIL (APEX SILVER)
http://www.apexsilver.com/
information@apexsilver.com (303) 839-5060
45,023,760 ordinary shares outstanding. (Jan 30th press release)
@ $19.51/share
$878 mil MC
cash on hand: $350 million after Jan 30th share offering, and March 16th convertable debenture.
San Cristobal (Bolivia) (proven & probably reserves) 454 mil silver
(forecast capital costs for construction to total approximately $435 million)
(Produced zero silver in 2002)
7.8 billion pounds of zinc, and 2.9 billion pounds of lead
$878 mil MC / 454 mil oz = $1.93/oz.
You get "approx" 3.68 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: A reader emailed me saying that Apex has 35 exploration properties. I have not yet confirmed this report.
March 16th, Apex raises $144 million in a convertable debenture deal to help finance the development of San Cristobal. They now have 350/435, or 80.4% of the capital costs needed for construction. Raising the last bit should now be very easy to do. If, while raising money, they held their cash in the form of silver bullion, they would probably not need to raise any more cash at this point, since silver has moved up over 50%.
Apex is now the most cash rich silver stock on the list. About $350 million! Amazing. Their plan, as they have stated all along, is to wait until higher silver and zinc prices to develop their deposit. I wonder if they will be smart, and hold their "cash" in the form of silver bullion while they wait for silver bullion to go up in price? Seems so basic even a child could understand it. One key problem standing in the way is that there are position limits on paper longs, and thus, APEX could not probably not buy that much silver bullion even if they wanted to. Ironic, isn't it? It is the most natural and sensical thing for Apex to buy silver while they wait for higher silver prices, and doing so would push up the price, but they likely will not act, and almost cannot act due to the problem of scales of size. This, to me, is so bizzare, I cannnot fathom it. I think I understand a lot, but this.... it is simply mind boggling. It's the result of a system so out of balance, it's insane, and the rational mind has no answer for the bizzare things we see today.
Look, COMEX is the last place on earth to buy silver now, in any really big size. Reports are coming in from all over that there is no bullion in significant size for sale available anywhere.
My advice to Apex would be to buy every bit of silver they can get. Even hold out a sign, put up a website, hire people to take the orders, and start buying silver, in all forms, at 10% and even 15% above the spot price. Just make yourself become the "market maker" and start buying silver from all over like a sponge soaking up water. Let the silver find you! In the long run, a 10-15% commission is nothing when the trade is this good. There may be position limits at the COMEX, but it's not illegal to offer to pay what you are willing to pay to the free market. Forget the COMEX, and make your own market!
Apex silver primarily has institutional investors.
Apex has a lot of zinc. That's an added bonus that is not factored in to my method of valuation. Zinc prices have been heading up soon, so that's another bonus. Plenty of zinc is especially good if zinc is moving up in price. Zinc is now up to $.51/lb., from a low of about $.35/lb. For zinc prices, see http://www.metalprices.com
And, they are not mining now, but are waiting for higher silver prices. That's also a plus. The management also seems to understand that silver will move upwards a lot. Another plus. Finally, George Soros, Billionaire, owns a bit of this one, just under 10% I read recently. That's another plus, in general, for the silver market if Billionaires are paying attention to it. There are several other zinc / silver plays on this list that investors might also consider: Canadian Zinc, Expatriate, or Metalline (I own Metalline, but not SIL.)
I do not have an idea on whether or not SIL will out perform silver bullion or not. It's hard to say, because of that huge zinc bonus. I expect most of the other stocks on this list to outperform or significantly outperform silver bullion in the long run from today's prices.
CFTN.PK (CLIFTON MINING)
http://www.cliftonmining.com/
clifton@cliftonmining.com 801-756-1414 (303) 642-0659 Ken Friedman
45 mil shares fully diluted (Oct. 2003)
@ $1.89/share US
$85 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"
$85 mil MC / 42 mil oz. = $2.02/oz.
$85 mil MC / 1000 mil oz. = $.085/oz.
You get "approx" 3.52 ounces in the ground for 1 oz. silver.
Exploration Potential: 84
Additional comments: Note the "exploration potential" is very large.
For more info on what's going on with Clifton, see http://www.dumontnickel.com , JV partner.
Clifton has 25% ownership of a biotech firm that makes a colloidal silver. The biotech firm has a patent on a "super" colloidal silver solution made with 10,000 volts that adds oxygen that gives it more powerful antibacterial properties, and is safer since it uses less silver, which would prevent "blue skin" argyria. Normal colloidal silver that you can make at home with 30 volts works to kill bacteria by disrupting the oxygen metabolism of the cell wall, killing bacteria with oxygen. The market for safe antibiotics is in the multi Billions of dollars.
See the human study data released on their colloidal silver product:
Clifton Mining Company - New Human Study Data Released
ABL signs a contract with GNC. (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!
GRS GAM.TO (GAMMON LAKE)
http://www.gammonlake.com/
gammonl@sprint.ca (902) 468-0614
Fully Diluted: 62 mil shares (Feb 27th, 2004)
@ $7.26/share
$450 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.
$450 mil MC / 231 mil oz.= $1.95/oz.
You get "approx" 3.65 ounces in the ground for 1 oz. silver's worth of stock.
**Note** most of Mexgold's oz. that are added in are an "exploration target" not yet "inferred resources".
Additional comments: Drill results released Jan 7th: http://biz.yahoo.com/cnw/040107/gammon_lk_drill_rslts_1.html
At current prices of a 64:1 silver:gold ratio at $425/oz gold and $6.60/oz silver, the resources are worth $1048 million of silver, and $1411 million worth of gold. Cash cost is $85/oz. Life of mine is 7 years.
FSR.TO FSLVF.PK (FIRST SILVER)
http://www.firstsilver.com/
info@firstsilver.com (604) 602-9973 or (888) 377-6676
38.6 mil shares fully diluted (Jan 2004)
@ $2.49/share Cdn x .74 US/Cdn = $1.84 US
$71 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.
$71 mil MC / 42 mil oz. = $1.69/oz.
You get "approx" 4.20 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: This is a high grade, producing miner. The high grades, about 300g/ton, are a plus. They are also actively exploring, another plus.
3rd quarter, 2003, FSR.TO produced 389,154 oz. silver, and 604 oz. gold. and revenue was $2.09 million for the 3rd quarter. They produced at a loss, (a penny per share). They are unhedged, and remain committed to remaining unhedged.
MFN MFL.TO (MINEFINDERS)
http://www.minefinders.com/
Shares Fully Diluted 34.1 mil (Late 2003?)
@ $9.07/share
$309 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."
$309 mil MC / 195 mil oz. = $1.59/oz.
You get "approx" 4.49 ounces in the ground for 1 oz. silver.
Additional Comments: At 70:1 silver to gold ratio, over half of MFN is in gold, so consider this a significant gold bonus. MFN also now lists their resource figures on their website's main page. I'm sure investors appreciate this. I do.
KBR.V KBRRF.PK (KIMBER RSCS)
http://www.kimberresources.com
info@kimberresources.com (604) 669-2251
31.2 mil shares fully diluted (Jan 20, 2004)
http://www.kimberresources.com/sharestructure.html
@ $2.45/share x .74 US/Cdn = US $1.81
$57 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."
$57 mil MC / 35.4 mil oz. = $1.60/oz.
You get "approx" 4.46 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.
PAAS (PAN AMERICAN SILVER)
http://panamericansilver.com/
info@panamericansilver.com (604) 684 -1175
61.5 mil shares fully diluted (Feb 27, 2004)
http://panamericansilver.com/s/CorporateInformation.asp?ReportID=26039
@ $15.77/share
$970 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
$970 mil MC / 743 mil oz. = $1.31/oz.
You get "approx" 5.45 ounces in the ground for 1 oz. silver's worth of stock.
Additional Comments: Pan American Silver Announces US$55 Million Common Share Financing
Pan American of Canada buys Morococha silver mine in Peru for US$35 million
This $35 million acquisition is a great deal for PAAS, and a minor help for PAAS shareholders. According to the press release above, the silver mine produced 3.5 million ounces of silver a year, at a cash cost of $3/oz., which is great! At $6.50/oz, that's $3.5 x 3.5 mil oz. = $12.25 million per year profit after cash costs! That gives the acquisition a P/E ratio for the mine's acquisiton cost of under 3! What a deal!
Unfortunately, PAAS shareholders are paying way above that when they buy the stock today. After this acquisition, PAAS should have a "2004 silver production forecast to 13 million ounces from 10.1 million ounces and will reduce forecast cash costs to below $ 3.50/oz, bringing anticipated total costs to less than $4/oz for the year." Now, at $6.50/oz, that's $2.5 x 13 mil oz. = $32.5 million per year profit, after cash costs. That gives a P/E ratio for PAAS of about $1000 / $32 = 31. Therefore, considering the two P/E ratios, 31 compared to under 3, PAAS stock is over ten times overvalued compared to other silver mining opportunities that exist in the market, such as the property they just purchased.
I believe PAAS is one of two silver companies on the list today that is significantly in debt (the other is now CDE).
What if your silver company decides to lock in silver prices at $8, and hedge years of production to "protect the shareholders and provide exposure to the high $8/oz. price," only to watch silver prices head past $25 and past $50/oz? Your stock could get wiped out in bankruptcy, and your investment could go to zero value! This is the danger of stocks! Your investment is subject to the whims of management!
WARNING: PAAS says at their website that they will hedge silver, in order to finance mine construction.
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."
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.
* TM.V TUMIF.OB (TUMI RSCS) (TUY Frankfurt Exchange) (I own shares)
http://www.tumiresources.com
nicolaas@attglobal.net Nick Nicolaas IR (604) 657 4058
23.7 fully diluted shares (Dec. 2003)
@ $1.65/share Cdn x .74 US/Cdn = $1.22 US
$29 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
$29 mil MC / 25 mil oz. = $1.16/oz. ***I'm using this number***
$29 mil MC / 50 mil oz. = $.58/oz. (exploration potential)
You get "approx" 6.14 ounces in the ground for 1 oz. silver's worth of stock.
Exploration Potential: 12 (likely plus more after bonanza silver discovery late November, 2003.)
Additional comments: Tumi soared in late November, after the company announced a bonanza grade silver discovery after drilling. This should significantly increase the numbers for their "exploration potential", but no word yet on the increase. It takes time for the geologists to estimate all of that, but investors went crazy over it immediately.
Tumi is focused on becoming a "premiere junior silver explorer." It's good to see the focus is in the right metal. Doing active drilling to prove up their projects and increase "resources". Nick Nicolaas really understands the silver story, beliving silver has much greater appreciation potential than gold.
Look at: Tinka TK.V (tumi's sister company)
A pretty big gold/copper property in Peru (Tumi owns 30% of it)...
That could mean significantly increased assets for Tumi.
I own shares of TM.V.
WTZ WTC.TO (WESTERN SILVER) (formerly western copper)
http://www.westernsilvercorp.com
info@westernsilvercorp.com Jay Oness Toll Free: 1-888-456-1112
40.1 mil fully diluted (After Dec. 16th 2003 financing)
@ $7.25/share
$291 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
Old info in Italics: Penasquito silver/gold. 213 mil oz silver. just over 2 mil oz. gold. from Chile/Colrado zone.
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.
$291 mil MC / 287 oz. = $1.01/oz.
$291 mil MC / 1000 oz. = $.29/oz. --exploration potential
You get "approx" 7.02 ounces in the ground for 1 oz. silver's worth of stock.
Exploration Potential = 24
Additional comments: Western Silver was formerly Western Copper... Copper now at $1.35/lb!
Note the capital cost to get the mining started: $148 million dollars.
WTZ also has the following other metal resources:
3.73 billion pounds of zinc x .50/lb = $1865 million
673 million pounds of copper x $1.30/lb = $874 million
1.3 billion pounds of lead x .40/lb = $520 million
HGM.V HOGOF.PK (HOLMER GOLD)
http://www.holmergold.com/
1-877-859-5200 ask for John Robinson, or George White
48 mil shares fully diluted (March 2004)
@ $.25/share Cdn x .74 US/Cdn = $ .185 US
8.9 mil oz. silver resources in cuba, according to final feasibility study. Short mine life.
$9 mil MC / 8.9 mil oz. = $.99/oz.
You get "approx" 7.14 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: silver in cuba. (final feasibility study completed by Rescan-Hatch) gold in Timmins, Ontario.
Most of the value of Holmer is in the gold property in Timmins, not the silver property in Cuba.
--final approval by the Cuban Govt. is expected within few weeks.
--Capital needed for the silver project, approx. $6 million.
MGR.V MGRSF.PK (MEXGOLD RSCS)
http://www.mexgold.com/
52.5 mil fully diluted (spring 2004)
@ $4.75/share Cdn x .74 US/Cdn = $3.51 US
$184 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"
$184 mil MC / 185 mil oz. = $1.00/oz.
You have an "exploration potential target" of 7.14 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."
The stock moved up strongly mid week, most likely in response to the news.
SSRI SSO.V (SILVER STD RSC)
http://www.silver-standard.com/
paull@silverstandard.com (604) 689-3856 or (888) 338-0046
45.4 mil shares (or more), Jan 19th, 2004 (after recent PP)
@ $14.11/share
$641 mil MC
debt free, cash: $Cdn 60 mil
not mining or producing
15 silver properties
measured and indicated resources totaling 300.4 million ounces of silver
plus inferred resources totaling 366 million ounces of silver = 666 mil oz.
Silver Standard Options In-Ground Silver Resources in Peru -- March 31, options 56.3 million oz. silver.
2.2 mil oz. gold. Silver equiv = 22 mil oz. silver. (22 + 666 + 56 = 744 mil oz.)
$641 mil MC / 744 mil oz. = $.86/oz.
You get "approx" 8.27 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: Silver Standard Defines Second Silver Zone at La Pitarrilla-Significant Silver Grades up to 46 Oz./Ton Over 123 Feet
SSRI really is the "silver standard". SSRI has the largest market cap this far down the list, which makes it a more attractive target for people with larger amounts of money to invest.
SSRI continues to add to reserves, either through exploring, or through acquisitions. This company seems to really understand the silver story, and helped to educate me as an investor.
I attended a two hour SSRI presentation after the Gold show in SF in late November. For the most part, their properties are very well drilled, and they have a fairly solid idea on how much silver oz. in the ground they have. They started their plan to acquire silver properties and become a "silver company" in about 1993, which explains why they have such a large market cap, and so many good properties with so many ounces of silver.
Some investors like SSRI because of the diversification --SSRI owns many silver properties. I say you can get a similar kind of diversification by owning stock in many silver companies.
ORM.V OREXF.PK (OREMEX RES)
http://www.oremex.com/s/Home.asp
info@oremex.com
Fully Diluted: 24,012,928
@ $1.20/share x .74 US/Cdn = $.888 US
$21 mil MC
Have $5 million cash in the bank as of Dec. 2003.
holds the right to acquire a 100% interest in six mineral properties in Mexico.
Oremex will focus on the exploration and development of the Tejamen Silver Property and the San Lucas Silver Property.
They are hoping to explore for up to 100 mil oz. silver by drilling over the next year.
--Experienced team of geologists and managment that have put other properties into production:
Anthony R. Harvey, Chariman, has put 14 properties into production in his 40 year career.
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 properties)
$21 mil MC / 24 mil oz. = $.89/oz.
$21 mil MC / 100 mil oz. = $.24/oz. --exploration potential
You get "approx" 8.02 ounces in the ground for 1 oz. silver's worth of stock.
Exploration Potential: 34
CZN.TO CZICF.PK (CDN ZINC)
http://www.canadianzinc.com/
czn@canadianzinc.com 1-866-688-2001
67.3 mil shares fully diluted as of Dec., 2003 (as stated in the proxy, p.8)
80.2 fully diluted shares as of Feb 2, 2003
@ $.94/share Cdn x .74 US/Cdn = $.70 US
$56 mil MC
$13.5 million cash, Cdn, no debt.
not mining ($20 mil needed to finish & start the mine) ($100 mil worth of mining infrastructure in place!)
~70 mil oz. (IN ZONE 3 only!! of 12 zones! This company seems to be greatly under-reporting their silver reserves. Their 18 year mine plan consists of zone 3 only, but there are 12 mineralized zones on the property.) Really, perhaps well over 100 mil oz. silver.
$56 mil MC / 70 mil oz. = $.80/oz.
You get "approx" 8.93 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: CZN is a junior explorer with relatively high trading volume recently, which is unusual for a stock with such a small market cap.
The additional cash from the recent private placements means that CZN will now be able to drill and explore more of their property. CZN likely has much more silver in the ground, and has good profit potential.
I would like the company to provide an estimate of the silver on the rest of their properties, but their mine plan consisted only of zone 3 at the moment. The rest must remain "exploration potential" for now.
To get the mine up and running, they might be able to pay back such debt within 2 years, but I would hope they would avoid debt, and raise the capital in additional financings.
I note several very, very positive things about this company.
1. This was the mining operation set up by the Hunt brothers, the major silver investors in the silver spike to $50/oz. in 1980 who were bankrupted by their own debts and margin calls as a result of the COMEX rule changes and silver short sale manipulation. The Hunts spent $50 million building infrastructure to build the mine. They were 90% complete when bankruptcy hit. The value of those buildings is now $100 million, and the mine only needs about $20 million (CAN) ($15 mil US) to get the mine up and running. That's much cheaper than other cost estimates of other operations.
2. The 70 million oz. of silver estimate is for zone 3 only. But there are 12 zones on the property. The zone 3 estimate is for a 10 year mine plan that involves mining zone 3 at current metals prices.
3. High Grade ores:
12% zinc/ton; = 240 lbs. zinc/ton x 50 cents/lb. = $120/ton for the zinc.
10.1% lead/ton = 202 lbs. lead/ton x 40 cents/lb. = $80/ton for the lead.
6 oz. silver/ton x $6.95/oz. = $42/ton for the silver.
0.4% copper/ton = 8 lbs. copper/ton x 1.30 cents/lb. = $10/ton for the copper.
Total: $249/ton! (Prices have been moving up!) Prices accurate as of Mid Feb., 2004
4. My method of valuation: I'm really counting only the silver, not the base metals in my "oz in the ground" valuation. So consider a significant "zinc bonus", and "lead bonus".
5. Zinc and base metals prices are moving up, up to. 50 cents/lb. for zinc! Check http://www.metalprices.com/ for updates.
SRLM.PK ( STERLING MINING)
http://www.sterlingmining.com/
RDemotte@aol.com Ray DeMotte 208/676-0599
just under 10 mil shares fully diluted (early Jan. 2004)
@ $8.90/share
$89 mil MC
~185 mil oz. reserves + resource, Sunshine alone
Quote from: http://www.sterlingmining.com/jun112003.html
"The prior operator last estimated the mine reserves at 26.75 million ounces of silver, 10.36 million pounds of copper and 7.05 million pounds of lead (or approximately 28.85 million ounces of silver-equivalent), as well as an additional resource of 159.66 million ounces of silver. "
~100 mil oz. other properties: the 10 sq. miles around the 1/2 sq mile of the Sunshine (rough guess--needs to be explored) even though--these extra 100 mil oz. are in the "explorer" category. They need to be drilled and found, although I've heard of estimates as high as 400 mil oz. total for SRLM.PK
$89 mil MC / 185 mil oz. = $.48/oz.
$89 mil MC / 500 mil oz. = $.18/oz. (exploration potential)
You get "approx" 14.80 ounces in the ground for 1 oz. silver's worth of stock.
(Exploration potential is 40. )
Additional comments: I wrote an article on SRLM in late Dec. See: Sterling Mining
Ray DeMotte really, really understands the silver story, and has been aggressively acquiring silver properties. Sterling continues to consolidate its land position around the Sunshine mine.
Sterling Mining acquired the Sunshine mine. Sunshine was one of the big three: Hecla, Couer, & Sunshine. Sunshine went bankrupt. Sterling got the property a few months ago cheap, because they were quick & willing to pay cash. Other buyers wanted to do a full study before making an offer. This company's share price went ballistic as a result. But the company is still way undervalued. Just do the math, people. I own a substantial share of SRLM.PK There were a few great articles written lately for SRLM. See the company web site, above. The best factors, I feel, are as follows:
1. The Sunshine mine is an existing mine that was mining at a profit. The company went bankrupt, not the mine. So there will be no great capital costs for start up, only minimal costs.
2. The Sunshine sits on 1/2 sq. mile, and was never fully explored. Sterling Mining owns 10 square miles of property surrounding the Sunshine, right in the heart of silver country, the location of CDE and HL, the other two big companies at the top of this list.
3. The management of Sunshine understands the silver story. They are on a mission to acquire distressed silver properties at today's cheap prices. See also: December 14, 2003: "In light of the continued low silver price, Sterling has this year begun holding back into inventory a portion of this year's silver coins minted."
RDV.TO RDFVF.PK (REDCORP VENTURE)
http://www.redcorp-ventures.com/
http://www.redfern.bc.ca/index.html
52.7 mil shares fully diluted (March 2004)
@ $.40/share Cdn x .74 US/Cdn = $.30
$16 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.
$16 mil MC / 38.3 mil oz = .41/oz.
You get "approx" 17.48 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: RDV has a "gold bonus". At $409/ gold, and $6.50/oz. silver, it's about $300 million worth of gold, and $200 million worth of silver, or about 60% of the value is in the gold. Since my method really undercounts the gold, this means there is a significant "gold bonus" here.
Redcorp Ventures Ltd.: Brokered Private Placement Financing Closed ($3 million)
FAN.TO FRLLF.PK ( FARALLON RSCS)
http://www.farallonresources.com/fan/Home.asp
(604) 684-6365 Erick Bertsch
73.8 mil shares fully diluted as of Oct 31, 2003
@ $.83/share Cdn x .74 US/Cdn = $.61 US
$45 mil MC
Exploration and development in Mexico.
Run by hdgold.com (Hunter-Dickinson)
On 4 sulphide deposits out of 16, 29 mil ton grading 89 grams silver/t and 1.57 g gold/t.
Conversion: 89 grams x .0353 oz/gram = 3.14 oz.
RE: those 29 mil tons, they "anticipate increasing resources to 50 mil tonne range..."
3.14 oz. x 29 mil tons = 91 mil oz. silver
1.6 mil oz. gold x 10 = 16 mil oz "silver equiv".
Total: 107 mil oz. silver equiv.
(Exploration potential = x 1.7 = 181)
$45 mil MC / 107 mil oz. silver equiv. = $.42/oz.
$45 mil MC / 181 mil oz. silver equiv. = $.25/oz. --exploration potential
You get "approx" 16.8 ounces in the ground for 1 oz. silver's worth of stock.
Exploration potential = 29
Additional comments: Nothing done or drilled on the property since 1999. Why not? Because of low zinc prices: 46% of the price of the metals was in the zinc before prices crashed... The largest componant today is gold, which was surprising to Eric, the IR guy I spoke with. About 1/3 is in silver now.
At today's low metals prices:
2% x 2000 lb = 40 lbs zinc x $.42/lb = $16.8 for the zinc (.37 to .50 lb zinc.)
3.14 oz. x $5.15 = $16 for the silver.
.055421 oz. x $385/oz. = $21 for the gold
(Assuming 100% metals recovery--which is not likely to be the case. It may range from 60% to a higher percentage, depending on extraction methods used and the particular mineral targeted, which constantly change with technology advancements, and price changes in the metals. By the time a mine like this gets running, perhaps in 5 years or so, things may change to allow even greater metal recovery.)
Speaking with FAN.TO guys, they think reserves of ore could be 50 mil tonnes OR MORE, but that they really don't know, and want to issue conservative estimates.
* MGN (MINES MGMT) (I own shares)
http://www.minesmanagement.com/
info@minesmanagement.com (509) 838 6050 Doug Dobbs
11.7 mil shares fully diluted as of the March 4th 1.4 mil financing.
@ $8.44/share
$98 mil MC
261 mil oz. silver resources. Previous drilling spent over $100 million drilling the property.
$98 mil MC / 261 mil = $.38/oz.
You get "approx" 18.9 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: As copper moves up 5 cents/lb., it adds $100 million to the value of the deposit.
As silver moves up $.50/oz., it adds $130 million to the value of the deposit.
Mines Management owned 10% of the rights to their property in Montana. The other 90% owner, Noranda, simply gave up on the property and walked away from their mining claim due to "perpetually" low silver prices and political concerns. That explains the rocketing share price. So, the MNMM group got 90% of the rest of the property FOR FREE!--the value of which, and the nature of this transaction has just barely begun to be understood by the market, given the low relative price.
Their property also has about 60% of the value (at current prices) in copper (copper at $1.35/lb.), 2 Billion pounds of copper, and 261 mil oz. of silver. Doing the math:
261 mil oz. silver x $8.12/oz. = $2.1 Billion.
2 Billion lbs copper x $1.35/lb.. = $2.7 Billion.
Total value of mineralization before costs to extract: $4.8 Billion. This number increased from around $3 Billion just a few months ago!
They do not have an active working mine--which is a minus. They will need to raise capital to get a mine going. Noranda had several estimates for the cost to build a mine and mill, around $250 million. But it could be less depending on how economic they decide to do things. They are working on a feasibility study, and avoiding excessive dilution, which is a plus.
Regarding environmental concerns: Noranda had a fully approved Environmental Impact Statement (EIS) that led to successful project permitting, so environmental concerns were not a factor in Noranda's departure of the project in 2002.
For more on MGN (formerly MNMM) see
http://www.thebullandbear.com/bb-reporter/bbfr-archive/minesmgmt.html
I own shares of MGN.
ADB.V ADBRF.PK (ADMIRAL BAY RSCS)
http://www.admiralbay.com/
info@admiralbay.com 604 628 5642 -- Curt Huber-- Business Development
33.3 mil shares fully dilluted. (March, 2004)
@ $1.32/share Cdn x .74 US/Cdn = $.98 US
$33 mil MC
They have $6 million cash.
--owns an option to earn 70% interest in "Miera San Jorge's Monte del Favor property in Mexico"
"An historical resource estimate based on underground sampling at Monte Del Favor is reported at 17 million tonnes grading 0.85 g/t gold and 224 g/t silver for a contained 123 million ounces of silver and 460,000 ounces of gold." "While this resource estimate is not fully 43-101 compliant, the Company considers that it provides a conceptual indication of the potential of the property."
460,000 x 10 = 4.6 mil "silver equiv".
127.6 mil oz. x 70% interest = 89.3 mil oz.
$33 mil MC / 89.3 mil oz. = $.36/oz.
You get "approx" 19.55 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: Prior grades hit 2-5 kilos silver/ ton. (2000-5000g/ton. 70-176 oz. ton) Very high grades. The project was never properly drilled with modern methods.
Admiral Bay acquired this option to own a 70% interest in this silver property in June, 2003, and the acquisition did not impact their stock price at that time at all. Previously, they were a gas company, and they still have this other gas project, which may be more than half the intrinsic value of the company according to Curt Huber, who understands the silver story as expressed by Ted Butler and David Morgan.
My valuation method, obviously, does not give any value for their gas projects, which therefore needs to be factored in as a significant "bonus". Company goals for gas production are 2.5 million cubic feet/day by mid 2004, which at $5 would be $12,500/day gross, and target is 7.5 million cubic feet/day by the end of the year, again, at $5 would be $35,000/day gross, or $12.8 mil/year gross.
They are actively digging, drilling, and releasing results in press releases.
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?)
@ $.56/share x .74 US/Cdn = US $.41
$2.9 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
$2.9 mil MC / 8 mil oz. silver = $.36/oz.
You get "approx" 19.63 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: There is a significant lead/zinc bonus. "The property could be put into production at a capital cost of Cdn $3.5 million -- with payback of capital (when equity financed) within two years."
EXR.V EXPTF.PK ( EXPATRIATE RECS)
http://www.expatriateresources.com/
info@expatriateresources.com 1-877-682-5474 Dr. Harlan D. Meade, President and CEO
88 mil shares fully dulted March, 2004
@ $.345/share Cdn x .74 US/Cdn = $.26
$22 mil MC
$1.2 mil CAN capital in the til no debt.
Mostly a base metals company: Zinc. Also has some silver & gold.
Total metal content of the six projects with resources... "Using current metal prices, the gross metal value of Expatriate's interest in the base metals in the properties is approximately US$1.56 billion as compared to US$540 million for its share of the silver and gold."
Metal: Expatriate share of the project:
Zinc 2.67 billion lbs.
Copper 385 million lbs.
Lead 202 million lbs.
Silver 63.1 million oz.
Gold 426,700 million oz.
Gold x 10 = 4.3 mil "silver equiv".
$22 mil MC / 67.4 oz. silver = $.33
You get "approx" 21 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: Atna to Participate in 2004 Wolverine Exploration Program - PrimeZone Media Network
Significant zinc bonus, about 3 times the silver value. Smelter credits are estimated at about 60% zinc, 25% silver, 10% gold and copper, and the rest, other minerals. My method of valuation puts a value on the silver only, not the rest, so this is a significantly better value than my number shows.
Call Dr. Harlan D. Meade, President and CEO 1-877-682-5474, and ask him to send you an information packet on EXR.V. It contains a good report on why he is bullish on zinc.
PLE.V (PLEXMAR RES INC)
http://www.paradox-pr.ca/image/plexmarnov2003.pdf
62 mil fully diluted (March 2004)
@ $.27/share Cdn x .74 US/Cdn = $.1998 US
$12 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.
$12 mil MC / 38.4 mil oz. = .32/oz.
You get "approx" 22.07 ounces in the ground for 1 oz. silver's worth of stock.
CHD.V CHDSF.PK (CHARIOT RSCS)
http://www.chariotresources.com/
45 mil shares fully diluted October 2003
@ $.32/share Cdn x .74 US/Cdn = $.24 US
$11 mil MC
Cello Ccasa (1 project of 4) Resource Estimate - August 2002
31.4 mil oz. silver, 134,000 oz. gold. (x 10 = 1.3) 32.7 mil oz.
(Still much exploration work to do.)
$11 mil MC / 32.7 mil oz. = $.33/oz.
You get "approx" 21.84 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
11.9 mil shares (Dec. 2003)
@ $1.40/share x .74 US/Cdn = $1.04
$12 mil MC
http://www.gencoresources.com/reserves.html
484 x .03215 = (15.5 oz) x 2.3 mil t = 35.8 mil oz. silver
2.00 x .03215 = 148,000 oz. gold x 10 = 1.5 mil oz. silver
385 x .03215 = ... x 95k = 1.2 mil oz silver
40+ mil oz. silver equiv. resources
2002 production, 500,000 oz. silver, 9000 oz. gold
$12 mil MC / 40 mil oz. silver = $.31/oz.
You get "approx" 23.10 ounces in the ground for 1 oz. silver's worth of stock.
* SVL.V STVZF.PK (SILVRCRST MINES) (I own shares)
http://www.silvercrestmines.com/
info@silvercrestmines.com (604) 691-1730
25.9 million fully diluted March, 2004
@ $1.40/share Cdn x .74 US/Cdn = $1.04 US
$27 mil MC
$3 mil cash in the til.
Now the Honduras and El Salvador "Resource" totals 43 million
plus the exploration potential of 40 - 100 million in Honduras
plus Mexico, --see news release from last month,
plus drill programs to start in Mexico and El Salvador
plus Guatemala another unknown but geologically similar to main property in Honduras and El Salvadore all three are within 25 miles from each other.
Silvercrest added 14.3 million oz. of resources at El Zapote, 4-6-04
The range of exploration potential is between 89 - 149 million oz.
$27 mil MC / 89 = $.30/oz.
$27 mil MC / 149 = $.18/oz.
You get "approx" 24 ounces in the ground for 1 oz. silver's worth of stock.
(Exploration potential = 39++ oz.)
Additional comments: April 6th: SilverCrest Reports El Zapote Resource Estimates
http://biz.yahoo.com/bw/040406/65883_1.html
--Silvercrest added about 14 million oz. of silver resources in the April 6th press release.
March 17th: Silvercrest closes El Salvadoran (El Zapote) Acquisition
http://biz.yahoo.com/bw/040317/175900_1.html
The project in El Salvador is only 20 km from the property in Honduras, and the property in Guatemala is 15km away, so only one mill will be needed for the three when a production decision is made.
Silvercrest has been and will be acquiring more silver properties with the money raised in the late November 2003 private placement, which I think is an outstanding way to spend the money.
I own shaers of SVL.V
ASM.V ASGMF.PK (AVINO SILV GOLD)
http://www.avino.com/
shares@avino.com 604 682-3701 -- David Wolfin
10.9 mil shares fully diluted, Nov. 2003 (with the 4 mil new shares from PP)
(proposed PP in late Oct 2 mil units at $1.27 (unit = 1 share + 1 warrant at 1.58)
@ $1.82/share Cdn x .74 US/Cdn = $1.35 US
$15 mil MC
from: http://www.avino.com/other/goldstock100197.html --in 1997
"How Much Silver Does Avino Have?"
"Operations at Avino's silver mine in Mexico are both open-pit and underground. I examined the reserves and interpolated the tonnage into silver ounces as follows: 28-million ounces proven; 50-million ounces probable and 27 million ounces possible." (Not all are 43101 compliant reserves & resources.--that is an old, third party report.)
--focus is on being silver company. A plus.
They actually have over five silver properties/projects. I'm only have numbers to count for one, the "Avino mine".
= 28 + 50 + 27 = 105
Avino owns 49% of that, or 51.5 mil oz.
-"not considered reserves under the new Canadian National Policy 43-101"
$15 mil MC / 51.5 mil oz. = $.28/oz.
You get "approx" 25 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.
UNCN.OB ( UNICO INC)
http://www.uncn.net/
Ray Brown, 530-873-4394
70 mil shares
@ $.095/share
$7 mil MC
Three main properties:
Bromide-- 372,000 ounces of gold?
Silver Bell--15 mil oz silver?
Deer Trail --287,000 ounces of gold and 27 million ounces of silver... but the lease on the Deer Trail will expire June 1 2004, so they need to raise significant money in about 3 months.
49 mil oz. total.
$7 mil MC / 49 mil oz. = $.14/oz.
You have an expiring lease on "approx" 52 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: They need $4 million to exercise their option to buy the "Deer Trail" property. They are considering various options on how to do that. Ray Brown has been in this business a long time, and is excited that he's got a bunch of younger guys working on the property now, and he's encouraged by the upward direction of the price of precious metals.
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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.
(The order is by largest market cap first, not by "comparative value".)
I removed Imperial Metals because I could NOT see that they were a significant silver miner with significant silver resources.
HL (HECLA MINING CO)
http://hecla-mining.com/
hmc-info@hecla-mining.com (208) 769-4100
115 mil shares
@ $7.40/share
$851 million Market Cap (MC)
near zero debt, cash: $123 mil (Feb., 2004)
(est. 2003 production 9 mil oz. silver)
(the La Camorra gold mine, 412,000 oz gold.) ... (x 350/5 = 28 mil silver equivalent oz.)
San Sebastian silver mine, (proven & probably reserves) 8.7 mil (produced 3 mil)
the Greens Creek silver mine (proven & probably reserves) 31 mil (produced 3 mil) Hecla owns just under 30% of it!
the Lucky Friday mine (proven & probably reserves) 14 mil. (produced 2 mil)
Total silver = 32 million oz.
Plus 412,000 oz. gold x 10 = 4.1 mil oz silver equiv.
Total silver equiv. reserves = 36 mil oz.
(Since my method values silver in the ground as a key asset, I should also value the cash as a "silver asset" which will be "marked to market" if silver goes up, and cash goes down. If HL is smart, they should be able to turn the cash into increased "silver exposure" either through buying silver properties, silver equities, or physical silver.)
$851 mil MC / 36 mil "oz." = $23.63/oz.
You get "approx" .30 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: HL has more oz. than listed in the "proven & probable" category used in this calculation. Vein mining makes reserve calculations difficult, and HL has rarely had more than about a 3-4 year picture of reserves ahead of them in 100 years of production.
Hecla is the most expensive company on the list in terms of cost per oz. of silver in the ground.
HL was downgraded Jan 6th by CIBC Wrld Mkts from Sector Perform to Sector Underperform http://biz.yahoo.com/c/20040106/d.html?hl
I believe silver bullion will continue to skyrocket, and I expect silver bullion to continue to outperform HL stock at these prices.
EZM.V EZMCF.PK (EUROZINC MINING)
http://www.eurozinc.com/
Fully Diluted: 224 million
@ $.59/share Cdn x .74 US/Cdn = $.44
$97 mil MC
Additional comments: Eurozinc really moved up in price after they announced a bid for the Neves Corvo mine in Portugal for 128 million Euros.
Eurozinc has significant silver.
*IMR.V IMXPF.OB (IMA EXPL) (I own shares)
http://www.imaexploration.com
43.4 mil Fully Diluted shares (May 1, 2003)
@ $2.89/share Cdn x .74 US/Cdn = $2.14 U.S
$93 mil MC
Exploring in Argentina.
$4.5 million cash
Additional comments: Positive drilling results are coming in.
IMA's Drilling at Navidad Intersects 115 Meters Grading 454 g/t '13 oz/t' Silver at Galena Hill
IMA Exploration Inc.: Drilling at Navidad Hits 20 Metres Grading 703 g/t - 20.5 oz/t - Silver
I don't think I have seen such high grade drilling results over such a long distance from any other company, in any other report.
I don't think the lawsuit challenging IMR's claims has any merit.
IMA Exploration Inc.: Statement of Defence Filed Wed, Apr 7
IMA files defence, says Navidad data was public
By: Tim Wood
I own shares of IMR.V
CDU.V CUEAF.PK (CARDERO RSCS)
http://www.cardero.com/
Henk Van Alphen -- President (604) 408-7488
32 million shares fully diluted Dec. 11th , 2003
@ $3.46/share Cdn x .74 US/Cdn = $2.56 US
$82 mil MC
($10 million Cdn cash in the till after $5.9 mil private placement closed on Dec. 11th)
Speculated resources, or "exploration potential":
Providencia -- high grades, could have 100-250 mil oz.
Chingolo -- Will finish drilling by secnod week in November -- Henk says, "may have 400-600 mil oz. "exploration potential" in 200-300 mil tons of rock." They got 30-40 grams (1.23 oz.) on the first drill hole, but hope to find 2-3 ounces silver/ton. Please note, "exploration potential" is a non quantifiable, non-regulated, unauthorized type of estimate. It is not 43-101 compliant. Trading decisions should probably not be made on these kinds of shaky estimates, which may be only hype and hope. An investor who wants to be protected by US regulations should wait for geologists to pour over the drill results and produce numbers that comply with 43-101 regulations, that may one day appear in a company press release. (Also, the first time Cardero issued drilling results earlier this year, the stock price was cut almost in half due to lower than expected results. The stock price has since recovered.) Nevertheless, here's how those "exploration potential" numbers work out if you do the math:
$82 mil MC / 500 mil oz exploration potential = $.16/oz.
$82 mil MC / 850 mil oz exploration potential = $.096/oz.
Exploration potential: you might get about 44 - 74 oz. silver for one oz. silver worth of stock.
Additional comments: *** I wrote an article on Cardero in January, 2003.
See http://www.gold-eagle.com/editorials_03/hommel020803.html
Cardero has three properties in Argentina; actively working on two: Chingolo and Providencia. Chingolo was just measured as twice as large as previously thought. They are trying to prove up these properties.
Providencia also has potentially high grades in several very large conglomerate deposits that can be mined at a profit today. Their property at Providencia was an active mine, but only a few tons/day. But they hope to make a large open pit project out of the main deposit, processing perhaps a few thousand tons/day.
High grades are very important in today's environment, especially if you can buy them cheaply.
They are also acquiring more silver properties, which is another bonus. This is an aggressive silver company. More properties help to alleviate the risk of an explorer.
AOT.V ASOLF.PK (ASCOT RSCS) http://www.bmts.bc.ca/aot/ 1 604 684 8950 39.7 fully diluted. (Nov 2003) @ $.40/share Cdn x .74 US/Cdn = .296 $12 mil MC (US) ---- Additional comments: They own 5.82 million shares and 388,000 warrants of Cardero at $.35, which usually a greater asset value than their market cap. Ascot's share price is typically around 80% of the value of their Cardero Stock.) (I'm listing this one out of order, not by market cap, and next to Cardero, because of their position in Cardero.)
MCAJF.PK (MACMIN LTD)
http://www.macmin.com.au/
450 mil shares and options (Feb., 04)
@ $.1425/share
$64 mil MC
"Total Inferred Resource is 34.5 million ozs silver but the district is unexplored for epithermal silver and exploration to date suggests a district potential of 50 to 100m ozs Ag or perhaps much more." --"Macmin is a silver focussed company" The Texas Silver Project has in-ground resources of 44.5Moz of silver equivalent. (They own some Malichite, MAR.AX) Also, significant gold projects, perhaps several multi-million oz. potential projects.
Price moved up significantly this week. Perhaps this news article had something to do with that:
News article in Australia on MCJAF
* FCO.TO FCACF.PK (FORMATION CAPTL) (I own shares)
http://www.formcap.com/frhome.htm
inform@formcap.com 604-682-6229
165 mil fully diluted, March 2004
@ $.55/share x .74 US/Cdn = $.41
$67 mil MC
(Recently completed $10 million financing)
Very large cobolt property: 1-3 million tons of 0.60% cobalt equivalent
Cobalt prices are racing ahead, up to $25- $33/lb. see http://www.wmc-cobalt.com/prices.asp
2000 lbs/ton x 0.6% = 12 lbs/ton x $29.50 /lb. = $354/ton (rich ore)
Cobolt is $29.50/lb. recently, up from $9/lb.
Formation Capital owns the Sunshine Silver Refinery (near Sterling Mining), worth $50 million.
Break even cost $5-6/lb cobolt.
The Idaho Cobalt Project is projected to produce 1,500 tonnes of cobalt per annum.
= 3,000,000 lbs. production x about $ 20/lb profit? = about $60 mil profit/year???
FCO.TO also owns a few minor silver projects.
The cobolt project needs more drilling, and with recent financing, things look bright.
Formation capital will be re-starting the Sunshine Silver Refinery--expected in early June.
I own shares of FCO.TO
* MMGG.OB (METALLINE MINE) (I own shares)
http://www.metalin.com/site_map.html
metalin@attglobal.net Merlin Bingham 208-665-2002
14 mil shares fully diluted (Oct 23, 2003)
+ 6.3 mil shares ???
20.3 mil shares?????
@ $3.05/share US
$62 mil MC
Additional Comments: Metalline Funding Completed April 7, Raised $8,316,500
?????I'm guessing that's an addition of 8.3 million shares, but I don't yet know for sure, and my prior number, I think assumed about $2 million share offering at $1/share.
Zinc & Silver in Mexico: Sierra Mojada. Sierra Mojada is a Silver District!
Silver: Historic production was 10 mil tons of high grade ore... historic silver production went right "direct shiped" to the smelter, non-milled. It contained 500-1000 grams silver/ton, or 17.65 to 35 oz. ton. This means 170-353 million ounces of historic "high grading," non-milled, production.
(Who knows how much silver is left?) That's the question with an explorer.
Zinc: Very high grades: 11.8% zinc. Potentially the lowest production cost in the entire zinc industry due to new "oxide deposit" chemical extraction process as revolutionary as "heap leaching". Exploring for up to 4 Billion pounds zinc.
Project ownership: MMGG terminated the buy-in agreement with Penoles, who went into default, so MMGG now owns 100% of the project! See http://biz.yahoo.com/bw/031203/35526_1.html
I believe this is very good for MMGG, since the Penoles agreement made it more difficult to quantify the value the company. Now, it is easier to value the company, and the existing shareholders will own more of the project and profits. It is important to note that MMGG took the initiative to terminate the agreement. Penoles did not issue a statement indicating any intent to walk away. Penoles' delay or indecision caused them to lose the rights to their buy-in option agreement. Just like if you have an "in the money" option, it's a mistake to let it expire.
For more, see the research works article here:
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
= 344 mil fully diluted Oct. 7th, 2003
@ $.23/share Cdn x .74 US/Cdn = $.17 US
$59 mil MC
"The company has a policy of not hedging or entering into forward sales contracts."
Cash flow positive. !!! --> + 2.5 % royalty on "Rapu Rapu" that should be worth about $1 million per year starting within 9-12 months. (a cash source for an explorer is a big plus)
14 projects in the Philippines.
Producing a dore bar of 96% silver and 4% gold from Canatuan project with the following:
Total silver = 7.1 mil oz silver
Total gold = 182,000 oz. gold x 10 (@10:1) = 1.8 mil oz silver equiv.
Total silver equiv (Canatuan) = 8.9 mil oz.
+ they own a drilling company with 20 rigs.
+ they have a "foot in the door" in China.
+ many other promising exploration properties in the Asian Pacific.
Additional comments: This company exploded in price from 16 cents to 23.5 cents when they announced that they would be mining in China: "TVI Pacific Inc. Receives Landmark Approval for Wholly Foreign-Owned Enterprise (WFOE) Status From Chinese Government". see http://tinyurl.com/vwbw
They are primarily a silver explorer. The bonus is they are a producer, and are cash flow positive, which are both extremely rare for an explorer. In fact, the other producers mostly all lose money!
* FR.V FMJRF.PK (FIRST MAJESTIC) (I own shares)
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
@ $1.93/share Cdn x .74 US/Cdn = $1.43
$40 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 which is similar to the Naica Mine:
The Naica Mine: 4.3%Zn, 5.5%Pb, 6ozAg, 0.01ozAu, 0.34%Cu (5 million tonnes reserves_
= 6 x 5 = 30 mil oz. silver x .8 = 24 mil oz.
The Niko project does not have reserves, it is similar to the Nacia, which has reserves.
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. So, if silver holds at $6.95, then $4/oz. is profit, x 1.8 mil oz silver/year = $7.2 million dollars/year after cash costs!
Do they understand the silver market? I think so! They linked an excerpt from my free e-book from goldismoney.com " 8 Reasons why silver is a better investment than gold! " see url here: http://tinyurl.com/xyyb
$40 mil MC
Additional comments: The other benefit of FR.V is that the company is keen on acquiring new properties. This is where the best money is made for a company in today's bull market in silver, in my opinion. From the home page of the website:
"First Majestic recently announced the acquisition of Le Parrilla Silver Mine, Mexico, which is anticipated to be the first of several acquisitions over the coming months."
I own shares of FR.V
* NPG.V NVPGF.PK (NEVADA PAC GOLD) (I own shares)
http://www.nevadapacificgold.com/
dhottman@nevadapacificgold.com (604) 646-0188 David Hottman
= 43 mil shares fully diluted (Nov 26th, 2003 including recent PP)
@ $1.30/share Cdn x .74 US/Cdn = $.962 US
$41 mil MC
(up to $10 million cash in the til from recent PP)
Amador Canyon Silver Project: 50-250 mil tonnes
silver grades average 4 oz. sil/ ton in the deposit
= 200 to 1000 mil oz. silver????? --very speculative at this point. Drilling needs to be done.
$41 mil MC / 200 mil oz. = $.21/oz.
$41 mil MC / 1000 mil oz. = $.041/oz.
The inverse: you "might" get 34 - 173 ounces in the ground for 1 oz. silver.
Additional comments April 2: Nevada Pacific Gold to Initiate 25,000 Feet of Drilling on Keystone, Amador Canyon and Limousine Butte
The 200 to 1000 mil oz. of silver exploration potential estimate for the Amador Canyon project is based on the size of the area, which may provide between 50 and 250 million tonnes of ore, times a low grade of 4-6 ounce per ton. 50 mil tonnes x 4 oz/tonne = 200 mil oz., the low end of the target range. 250 million tonnes x 4 oz/tonne = 1000 mil oz., the high end of the range. That target range is the expectation that the geologists are hoping the drilling will prove up. It will likely take several rounds of drilling and analysis of drill results to get a proper resource calculation, and plenty of time.
NPG.V has 10 gold projects, and one silver-but it may be big. The Chariman, David Hottman, says that 90% of the value of the company is in gold, NOT silver, and yet, I'm buying this company for the silver project of Amador Canyon only, and as if the gold componant was worth nothing. (The gold projects are a free bonus, in my book, and help to alleviate the risk of this explorer.)
Explorer in Nevada. They do not really know how much silver they might they have in the Amador Canyon project. They just did a $2.5 million private placement, and another $10 million private placement in late November. On the website, for David Hottman's bio, it says he was a founding member of Eldorado gold. "During his tenure, Eldorado's market capitalization grew from Cdn $7 million in 1992 to a peak of Cdn $781 million in 1996." Please note, exploration is risky, and costly.
Now that they are well-capitalized with over $10 million dollars, this company will likely do very well as they drill and prove up the deposits across all their properties.
I own shares of NPG.V
SPM.V SMNPF.PK (SCORPION MINING)
http://www.scorpiomining.com
18.7 mil shares fully diluted? March 2004
@ $3.45/share Cdn x .74 US/Cdn = $2.55 US
$48 mil MC
Scorpio closes $16 million private placement, March 8th
MAG.V MSLRF.PK (MAG SILVER)
http://www.magsilver.com
28 mil fully diluted shares (Nov. 19, 2003)
@ $1.80/share Cdn x .74 US/Cdn = US $1.33
$37 mil MC
--"MAG Silver Corporation enters the silver market as a powerful force. MAG combines a seasoned management team with two drill-ready geological extensions of high-grade world class producing districts. MAG controls 100% of the Juanicipio property adjacent to the Fresnillo District in central Mexico, currently producing over 12% of the world's silver from high grade underground vein structures."
The geologist, Peter K.M Megaw, is also working with EXN.V, another high grade silver project. Peter's philosophy was that it makes sense to go after very high grade silver projects that will be profitable regardless of the silver price.
IAU.V ITDXF.PK (INTREPID MINRLS)
http://www.intrepidminerals.com/
scoates@intrepidminerals.com Stephen Coates, Investor Relations (416) 368-4525
50.6 mil fully diluted w/ Dec. 9 financing (good as of March 4,2004)
@ $1.03/share Cdn x .74 US/Cdn = .76 US
$38 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.
* OTMN.PK (O.T. MINING) (I own shares)
http://www.otmining.com/ --The website has been updated.
info@otmining.com Jim Hess Tel: 514-935-2445
8 mil fully diluted. (+ shares from the recent PP which are not yet added to the 8 mil)
@ $4.80/share
$38 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.
Private Placement Closed.
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
ECU.V ECUXF.PK (ECU SILVER MINI)
http://www.ecu.qc.ca/indexen.html
ecu@ecu.qc.ca (819) 797-1210
fully diluted shares = 103.3 million (6 January 2003)
@ $.42/share Cdn x .74 US/Cdn = $.31
$32 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.
$32 mil MC
Additional comments: ECU Silver Mining Private Placement
--April 15th for 2-5 mil units of a share and a warrant at .28 and .37.
ECU recently recovered title to properties that were in dispute. See: http://tinyurl.com/x691
ECU stock was recently stopped trading, due to updating their resource calculations. See ECU Silver Mining Inc. Clarifies and Retracts Previous Disclosure
CAUCF.PK (CALEDON RES)
http://www.caledonresources.com/
Shares Outstanding - 180,721,142
@ .185 at Yahoo!
(Mining in China)
It trades on the London Stock Exchange, under the symbol, CDN
$33 mil MC
MMM.TO MMAXF.PK (MINCO MINING)
http://www.mincomining.com/
investor-info@mincomining.ca 1-888-288-8288
23 mil Fully Diluted
@ $1.85/share x .74 US/Cdn = $1.37
$31 mil MC
Located in China
2 gold projects and 1 silver (42% owned). Explorer
$31 mil MC
MAI.V MNEAF.OB (MINERA ANDES)
http://minandes.com/
ircanada@minandes.com (604) 689-7017
73 mil fully diluted as of Nov. 2003
@ share $.52/share Cdn x .74 US/Cdn = $.38 US
$28 mil MC
To raise $6.6 mil in recent financing.
owns 49% of the resource: "55 mil silver equiv. oz. resource" back in 2001. AT 60:1 silver:gold when gold was about $300/oz., about half/half silver and gold.
Estimated: 27.5 mil oz silver
Estimated: 27.5 mil oz. "silver equiv" of gold.
/ 6 = 4.58 mil oz. silver equiv at 10:1 ratio.
Total: 27.5 + 4.6 = 32 mil oz. silver equiv. (x .49 (they own 49%) = 15 mil oz.)
They will be exploring for more: (The resources may be only 10% of the property.)
2.2 km stretch, open another 2.7, plus 3 other vein systems. significant high grade silver exploration potential. 7000 meters of diamond drilling. Plus a copper project, billion ton ore deposit.
$28 mil MC
Additional comments: Minera Andes Inc.: New Huevos Verdes East Drilling Intercepts Multiple Zones With Up To 63 g/t Gold And 1,690 g/t Silver - CCNMatthews
About half is gold value, half is silver value at 60:1. Minera Andes has several significant bonuses that my method is not valuing properly. First, I undercount the gold, of course, so consider there is a "gold bonus" at current gold prices. Second, they will be doing significant exploration work to increase their resources, and they have recently raised the money to be able to pay for that exploration work. Third, they have a copper project, and copper prices are rising. I moved MAI.V to the explorers list to be more fair to their valutation.
* EDR.V EDRGF.PK (ENDEAVOUR GOLD) (I own shares)
http://www.edrgold.com/
Hugh Clarke, Investor Relations 1-877-685-9775
14.8 million Fully Diluted Jan 21, 2004
@ $1.85/share Cdn x .74 US/Cdn = $1.37
$20 mil MC
http://www.edrgold.com/s/SantaCruzMine.asp
--currently producing 600,000 oz. silver/yr.
--expect to increase production to 4,000,000 oz. silver/yr
I own shares of EDR.V
BZA.V ABZGF.PK (AMER BONANZA)
http://www.americanbonanza.com/
119 mil shares fully diluted Sept, 2003
@ $.25 x .74 US/Cdn = $.185
$22 mil MC
American Bonanza Acquires High Grade Silver Property in Nevada & Goldcorp Exercises Warrants
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.
@ $.385/share x .74 US/Cdn = $.28
$17 mil MC
Dumont still needs to raise and pay several million to clifton for 50%-60% of each property, and there are many properties. (See Clifton for more specifics on the JV agreement.)
Additional comments: Clifton's JV partner, doing active drilling work right now. And recent property acquisitions. I moved Dumont to the explorer category, because I really don't have any idea what percent of Clifton's property they may acquire, which depends on Dumont completing a feasibility study on each property.
There seems to be significant disagreement between Clifton's shareholders and Dumont's shareholders on which company has the better value. On the one hand, Dumont is the aggressive partner, since they are the one doing the acquiring. On the other hand, Clifton is the holder of most of the properties, and Dumont has to pay several million to acquire each of the many properties. This is a very complex deal.
I do not like JV agreements due to the complexity of trying to determine ownership which is contingent upon many unknown factors that might change in the future. One man recently offered me an interesting suggestion. He simply said, "Why not buy both?".
EXN.V EXLLF.PK (EXCELLON RSCS)
http://www.excellonresources.com
87 mil shares fully diluted (Jan 9, 2004 press release)
@ $.23/share Cdn x .74 US/Cdn = $.17 US
$15 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%)
$15 mil MC
Additional comments: "Excellon ...is exploring and developing".... "a Bonanza grade Silver deposit in Mexico." The geologist, Peter K.M Megaw, is also working with MAG.V. From J. Taylor's write up on 2002: "After subtracting capital cost of US $1.8 million, custom milling charges and operating costs, management believes this underground development mine can, over the next two years, generate US $15.8 million or nearly $8 million for EXN's 51% share." That was when silver prices were under $5/oz.! The company plans to use these proceeds to further drill and explore the property. They believe the property may contain significantly more silver, as if what's known is only the "tail of the tiger"; furthermore, they believe they can fund exploration by mining the high-grade silver deposit that has been partly drilled.
BCM.V BCEKF.PK (BEAR CRK MINING)
http://www.bearcreekmining.com/s/Home.asp
39.2 million shares fully diluted
@ $.53/share Cdn x .74 US/Cdn = $.39 US
$15 mil MC
--About 6 properties in Peru (I wonder if Peru presents a significant political risk, given what happened to MAN.TO, or whether that was an isolated case in Peru? I don't know either way.)
NJMC.OB (NEW JERSEY MIN)
http://www.newjerseymining.com/
Fred or Grant Brackebusch minesystems@usamedia.tv
23.9 fully diluted Apr, '04
@ $.70/share US
$18 mil MC
New Jersey Mining Company (NJMC) is engaged in exploring for and developing gold, silver and base metal ore reserves in the Coeur d'Alene Mining District of northern Idaho also known as the Silver Valley - one of the world's richest silver districts.
CMA.V CRMXF.OB (Cream Minerals Ltd)
http://www.creamminerals.com/cream/main.htm
http://www.langmining.com/cream-mx/
= 34.8 mil shares fully diluted (March 31, 2004)
@ $.71/share x .76 Cdn/US = $.53 US
$18 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.
$18 mil MC / 360 mil oz. = $.05/oz. (exploration potential) --not a "resource"!!!
You may get 140 oz. of silver, per oz. of silver's worth of stock. (Compare to NPG.V)
Additional comments: Another silver property is the Kaslo.
"The Kaslo Silver Property encompasses the Keen Creek Silver Belt and is comprised of nine former high grade silver mines"...
* KG.V KDKGF.PK (KLONDIKE GOLD) (I own shares)
http://www.klondikegoldcorp.com/
70 mil fully diluted (Nov. 2003)
@ $.26/share Cdn x .74 US/Cdn = $.19 US
5 year high .30
$13 mil MC
This company has many silver and gold properties. Some of the people are also involved with GNG.V, Golden Goliath.
Klondike has one silver property that could be producing within weeks.
(I own shares of KG.V)
* CBE.V CBEFF.PK (CABO MINING) (I own shares)
http://www.cabo.ca/
jav@cabo.ca (604) 681-8899 John Versfelt, President
Fully diluted subtotal, including shares needed to acquire two drilling companies, which is contingent upon a financing.
= 18,880,436 as of February 9th, 2004 (Post-Consolidated)
(Plus a proposed $5 million financing to acquire the two drilling companies.)
@ $1.17/share Cdn x .74 US/Cdn = .87
$16 mil MC
Cabo Mining issued a 4 page press release on Jan. 5 detailing their contracts to acquire two drilling companies.
I wrote an article on Cabo on February 10th. Market Perspective & Cabo Mining - Hommel
In the article, I highlight what I feel is Cabo's most imporant asset: control of 60% of the mining camp of Cobalt, Ontario. The "silver capital of Canada" produced historically, over 500 million ounces of silver.
Cabo announces Second $5 million private placement, at .83/share.
http://www.cabo.ca/news/nr04-0217-cabo.pdf
Although I'm generally wary about excessive dilution, this second PP is well-needed. The first $5 million PP was primarily for the drilling companies, and the second will allow the company to explore the Cobalt properties better.
Cabo has exposure to silver, cobolt, nickel, gold, diamonds, and drilling companies.
Regarding the contracts to acquire two drilling companies in Canada: With all the money raised lately by so many companies to do exploration work now that precious metals prices have increased, I think drilling companies will be very busy making money. This will give the company positive cash flow after they raise the money to acquire the drilling companies.
Cabo had a significant discovery, as indicated in a press release on Feb 4. Some of their grab samples have very high percentages of Cobalt and Nickel. One vein grab sample was almost 30% nickel, (2 over 20%), which is at $7/pound. Three samples were over 3% Cobalt, which is at $30/pound.
To learn more about the mining camp town of Cobalt, there is a fascinating article detailing the history of the silver camp at http://www.cobalt.ca/cobalt/history.htm
I own shares of CBE.V
SML.V SMLZF.PK (STEALTH MNRLS)
http://www.stealthminerals.com
Email-Bill@McWilliam.com 604-306-0391 Bill McWilliam, Chief Executive Officer
48 mil shares (August 31- 02)
@ $.47/share Cdn x .74 US/Cdn = $.35
$17 mil MC
NBG.V NBULF.PK (NEW BULLET GP)
http://www.newbulletgroup.com/index.htm
50 mil shares fully diluted (including 15 mil new PP)
http://www.newbulletgroup.com/financial.htm
@ $.34/share Cdn x .74 US/Cdn = $.25 US
$13 mil MC
NBG.V has a gold deposit in Brazil that's bigger than the silver project in Mexico.
http://www.newbulletgroup.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.
$13 mil MC / 75 mil oz. = .17 oz.
$13 mil MC / 210 mil oz. = .06 oz.
Exploration potential = 42 - 115 oz. per oz. worth of shares.
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) @ $.195/share Cdn x .74 US/Cdn = .14 $13 mil MC JV partner with NBG.V on Santo Domingo Silver Project in Mexico. 150 to 300 mil oz. exploration potential of the deposit. ownership is between 30-50%, so... 30% of 150 mil oz.= 45 mil oz., and 50% of 300 mil oz. = 150 mil oz. $13 mil MC / 45 mil oz. = $13 mil MC /150 mil oz. =
CHMN.PK (CHESTER MINING)
http://www.chestermining.com/
Bill Hoyt, 785-383-9246
" 2.3 million shares outstanding, positive working capital and no debt "
@ $5.20/share US
$12 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.
$12 mil MC
EPZ.V ESPZF.PK (ESPERANZA SILVR)
http://www.esperanzasilver.com/s/Home.asp
20 million shares fully diluted
@ $.80/share Cdn x .74 US/Cdn = US $.59
$12 mil MC
"Esperanza Silver Corporation is solely dedicated to the identification, acquisition and exploration of new silver projects." Looking for high grades.
GNG.V GGTHF.PK (GOLDEN GOLIATH)
http://www.goldengoliath.com/
604-682-2950
32.4 mil shares fully diluted
@ $.40/share Cdn x .74 US/Cdn = $.296
$10 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.
MMG.V MMEEF.PK (MCMILLAN GOLD)
http://www.macmillangold.com/
25.6 mil shares outstanding (3q 2003 report June, 2003)
@ $.50/share Cdn x .74 US/Cdn = $.37
$9 mil MC
SHSH.PK (SHOSHONE SILVER)
http://www.shoshone-mining.com
Bill Hoyt, 785-383-9246
12 mil shares
@ $.60 US
$7 mil MC
In Cour d'Alene, near CDE, HL, & SRLM.PK
* KRE.V KREKF.PK (KENRICH ESKAY) (I own shares)
http://www.kenrich-eskay.com/
Toll-free 1-888-805-3940
16 mil shares outstanding. Use "fully diluted" to be safe.
@ $.57/share Cdn x .74 US/Cdn = .42
$7 mil MC
Adjacent to Barrick's silver property, Eskay Creek, which is "the fifth largest silver producer in the world".
70% of the rights to The Property was once almost bought by Homestake (which was acquired by Barrick) for $35 million in 1996, and Homestake was going to fund all exploration and development. The buy out ended when metals prices collapsed, and Bre-X hit, and when the majors cut back on exploration budgets to stay alive. This means the market cap of KRE.V may be worth 100%/70% x $35 million, or $50 million, plus exploration and development costs, to a major mining company, and likely worth much more today, due to inflation of the dollar, and the rise in the price of silver!
I'm not exactly sure about the market cap at the moment, not quite sure how many fully diluted shares. So don't bid the price up too much without calling the company, and doing your own calculations of what you think this company might be worth.
I own shares of KRE.V
EGD.V EGDMF.PK (ENERGOLD MINING)
http://www.energold.com/s/Default.asp
Fred Davidson President (604) 681-9501 info@energold.com
16.8 million Fully Diluted (June 30, 2002)
@ $.60/share Cdn x .74 US/Cdn = $.444
$7 mil MC
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)
@ $.11/share Cdn x .74 US/Cdn = .08
$5 mil MC
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)
@ $.19/share Cdn x .74 US/Cdn = $.14 US
$6 mil MC
see also Teuton Resources Corp (TUO.V)
Additional Comments: --Bonanza grades. Newmont called them, noticed the property. Flew out a guy. El Tigre in Mexico: gold/silver bonanza style mineralization. Top grades: 62g/T gold 15,500g/T silver historic production, from trenching and surface sampling in late 90's. Cash on hand: $500,000 CAN
BGS.V BLDGF.PK (BALLAD GLD SLVR)
http://www.balladnet.com
16.3 mil shares outstanding
(fully diluted?)
@ $.31/share Cdn x .74 US/Cdn = $.22 US
$3.6 mil MC
Bonanza grade "grab samples" in southern Argentina near IMA
* AUN.V AUNFF.PK (Aurcana Corp) (I own shares)
http://www.aurcana.com/
CEO Ken Booth 604-331-9333 kbooth@aurcana.com
45 million shares (fully diluted) (March 2004)
@ $.17/share Cdn x .74 US/Cdn = $.13 US
$5.6 mil MC
Drilling to commence on high-grade, gold-silver targets. (in Mexico)
(I own shares of AUN.V)
SRY.V (STINGRAY RSCS)
http://www.stingrayresources.com/
info@stingrayresources.com (416) 368 6240
5.9 mil fully diluted
@ $.81/share Cdn x .74 US/Cdn = $.60
$3.5 mil MC
- Current projects centered in the Sierra Madre Belt of Mexico
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)
@ $.29/share Cdn x .74 US/Cdn = $.21
$4.4 mil MC
"Management of Teuton and Lateegra are highly encouraged by the prospective results from the Del Norte exploration to date
located in the Eskay Creek region"
ASLM.PK (AMER SILVER MINI)
2.75 million shares issued
@ $1.70/share
$4.7 mil MC
Claim between CDE and the old Sunshine mine.
JV with CDE subsidiary until 2017. ASLM to receive 20% net royalty, & if silver prices reach $16.50 an ounce or above, the profit sharing goes to 40%.
Coeur d' Alene, Idaho
BBR.V BBRRF.PK (BRETT RES)
http://www.bmts.bc.ca/bbr/
17.2 fully diluted
@ $.28/share Cdn x .74 US/Cdn = $.21
$3.6 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)
@ $.29/share Cdn x .74 US/Cdn = .21
$3.1 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
@ $.15/share Cdn x .74 US/Cdn = .11
$1 mil MC
--CBP.V is the smallest market cap silver stock that I know of. It is truly a "penny stock".
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Final Category: Silver stocks FOR YOU and I TO RESEARCH further:
I strongly recommend you try to "get ahead of me," and research these stocks to see if I left out any great values. I probably did. I simply did not have time, or could not yet find information (without using the telephone) on all the two key figures needed to get the "price per oz." in the ground. You need: 1. The number of shares fully diluted x share price to get the market cap. Then, 2., you need an estimate of the oz. in the ground. Usually, I've been finding the oz. in the ground resource estimates right off the company webpages, and I get the number of shares by looking for it burried in the financial statements like the quarterlies or annual reports, which are also usually right on the company webpages. Have fun researching for silver companies, and let me know if you find any good ones, and I'll add them to this list.
* TBLC.PK (TIMBERLINE RES) (I own shares)
* PDO.V (PORTAL DE ORO RS) (I own shares)
Portal Resources Enlarges Arroyo Verde Project, Argentina - CCNMatthews
QTA.V QURAF.PK (QUATERRA RES)
http://www.quaterraresources.com/
Jay Oness Toll Free: 1-888-456-1112
# shares uncertain.
three main properties in North America
@ $.???/share Cdn x .74 US/Cdn = $.53 US
QTA.V is a Sister Company to Western Silver, WTZ above.
PXI.V, PNXPF.PK
Planet Exploration Inc.
http://www.planetexploration.info/mexico.asp
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."
http://www.celticresources.com/
Grand Central Silver Mines Inc (GSLM.PK)
ATN.TO/ATNAF.PK (Atna Resources Ltd.)
37.1 mil shares fully diluted ???
http://www.atna.com/s/Home.asp
The company holds a diverse portfolio of gold, silver, zinc and copper properties in the United States, Canada, Mexico, and Chile.
From http://www.capitalstool.com/forums/index.php?showtopic=4996
37 M shares (fully diluted)
(Wolverine) 40% of 2300 Mg Ag = 30 Moz Ag
+ (Marg) 67% of 340 Mg Ag = 7,5 Moz Ag
+ (Wolf) 67% of 340 Mg Ag = 7,5 Moz Ag
+ (Nevada explorations) 40% of ?
+ (Ecstall) 140 Mg Ag = 4,7 Moz Ag
The Wolverine Project is a joint venture between Atna (40%) and Expatriate Resources Ltd. (60%).
Legend Mining LEG.AX LGDMF.PK
http://www.legmin.com.au/
specialising in exploration and production of silver.
Silver at the Munni Munni Joint Venture in the West Pilbara region of Western Australia
Email to me said: "Legend Mining just bought a 70,000 ounces per
year gold mine in Western Australia."
Malachite Resources MAR.AX
http://www.malachite.com.au/
Mountain Boy Minerals Ltd (MTB.V)
http://www.mountainboyminerals.ca/
TEL: (250) 636-9283
http://www.stockhouse.ca/news/news.asp?newsid=1933880
high grade samples: 3640 g/T Ag to 45.5 g/T Ag
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
Silver Bowl
http://www.silver-bowl.com/
Coeur d' Alene, Idaho
--working to get a new stock transfer company
http://www.oxusgold.co.uk/ 216,559,942 Fully Diluted shares
oxus will spin off: Khandiza is a high-grade zinc, silver, copper and lead deposit located in the Sariasia region of southeast Uzbekistan.
Silver Mountain Lead Mines Inc (SMLM.PK)
Silver Verde May Mining Co (SIVE.PK)
Metropolitain Mines Ltd (MEMLA.PK)
Silver Surprize Inc (SLSR.PK)
Standard Silver Corp (SDSI.PK)
Horn Silver Mines Co (HRNS.PK)
(801)-281-5656
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.
Langis Silver & Cobalt Mining Co Ltd LSM.V
Phone: (416) 628-5936
Silver Butte Mining SIBM.OB
http://www.umpqua-watersheds.org/local/mine.html
(mine abandoned in 1996, copper/zinc waste water?)
Articles like this one, that present opportunities like these, can tend to move the markets in these stocks. So, be careful when buying. If you place any market orders at the open for any of these small stocks, you might end up buying at prices that are significantly higher than you intended. Limit orders might be better, but then, you run the risk of your order not being filled if the stock price exceeds your limit. And bid / ask spreads such as 15% on small cap silver stocks are not unusual. Markets can especially be moved given the wide readership on the internet. I've seen markets moved even by small private newsletters such as lemetropolecafe.com and silver-investor.com (I subscribe to both). Some of these stocks can move up 15%, 30%, 50% or even over 100% in a single day. Thus, valuations can change very, very quickly. So, be careful, and re-check the numbers if the prices move up. Do your own math.
Also note, the majority of these companies have an emphasis on silver. Most silver is produced as a by product of other mining, like lead or zinc or copper mining. Those companies that primarily produce other minerals are not featured in this report. This also helps to explain and prove, that silver is undervalued. If silver miners cannot mine silver profitably, and this report shows that to be true, then something is wrong with the silver price. It must go higher.
This report, and my method of valuing silver companies, depends on a much higher price for silver than exists today to be most accurate and most successful. If silver prices go up significantly, my picks will do well. If silver prices remain flat, then many of my picks should not do well.
To learn more about the silver market:
http://www.bibleprophesy.org/SilverStockExtra.html
http://silverminers.com/
http://www.silverseek.com/
http://www.gold-eagle.com/silver_section.html
http://www.gold-eagle.com/silver_section/reports.html
For information from the SEC on how to protect yourself from a "pump & dump" scam, see
http://www.bibleprophesy.org/SilverStockExtra.html
And finally, again, BULLION DEALERS:
http://www.goldismoney.com/buy-gold.php
Several people have told me that they don't get information this good even when they sign up for annual newsletter subscriptions from others that cost from $100 - $300.
There is a free daily newsletter that you may like. http://www.dailyreckoning.com/
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.
You can help to make sure you can keep getting this weekly report for free if you sign up at GoldIsMoney.com
Jason Hommel
GoldIsMoney.com
Final Disclaimer: I have not received any compensation from any public silver stock company for writing up my weekly report on "Silver Stocks--Comparative Valuations". I own shares of the following 18 silver stocks: CMA.V, PLE.V, TBLC.PK, PDO.V, AUN.V, EDR.V, IMR.V, KG.V, MGN, CBE.V, NPG.V, SVL.V, MMGG.OB, TM.V, OTMN.PK, FCO.TO, KRE.V, FR.V. These are required disclaimers by the SEC: whether I've been paid, and what I own. I believe the SEC intended this to be a cautionary note that I own these shares, not as a recommendation or endorsement. I reserve the right to buy or sell any stock at any time. I believe the SEC does not requrie a disclosure regarding finder's fees. Nevertheless, I have begun to receive "finder's fees" from a few companies.
-- Posted 20 April, 2004 | |
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Last Three Articles by Jason Hommel, Gold Is Money
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