This week's report lists 108 silver stocks. There are 31 silver stocks that list reserves, resources (and exploration potential.) which I calculate by using my "ounce in the ground" forumula. There are 50 explorers. There are about 27 additional "silver" stocks with incomplete information. Additions & Changes from last week are in bold.
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To read about my religious bias, see my other website, bibleprophesy.org There are two essays near the top of the page that explain why I believe the entire world will return to using gold and silver as money again before the end times. Hint, see Ezekiel 38. To read more about my religious bias when it comes to investing, see my essay, Biblical Guidelines for Managing your Money
Kitco reports silver at $5.56/oz. as of Friday, 7:00 PM West Coast US, which was used to calculate the following figures. The CAN $ / US $ conversion factor is .7232. I will use .72 for ease.
How to read the following table: Stock Symbol that works at Yahoo! Finance (Company name) / Silver oz. "in ground" for 1 oz. silver's worth of stock. / valuation price change since last week relative to silver price change (and stock dilution, and resource changes, if any) / additional comments (EXPT is "exploration potential")
ABX (BARRICK) 1 even --infamous hedger (18 mil oz. gold hedged, 3 yrs production) hedged?
IPOAF.PK (INDUSTL PENOLES) 1.6 down --current producer, mostly family owned, hedged?
CDE (COEUR D'ALENE) 1.4 up --current producer, (gold bonus) in debt.
SIL (APEX SILVER) 3.7 even --large zinc bonus, low grades, cash rich--$345 million! in debt
GRS GAM.TO (GAMMON LAKE) 3.6 up --current producer, owns 26% of Mexgold
* 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
GPR.V GPRLF.PK (GREAT PANTHER)
MMG.V MMEEF.PK (MCMILLAN GOLD)
SHSH.PK (SHOSHONE SILVER)
* KRE.V KREKF.PK (KENRICH ESKAY)
EGD.V EGDMF.PK (ENERGOLD MINING)
PCM.V PAOCF.PK (PAC COMOX RES)
LEG.V LEGCF.PK (LATEEGRA RSCS)
BGS.V BLDGF.PK (BALLAD GLD SLVR)
* AUN.V AUNFF.PK (AURCANA CORP)
SRY.V (STINGRAY RSCS)
TUO.V TEUTF.PK (TEUTON RES)
ASLM.PK (AMER SILVER MINI)
BBR.V BBRRF.PK (BRETT RES)
ROK.V ROCAF.PK (ROCA MINES INC)
CBP.V CPBMF.PK (CONS PAC BAY MIN)
* = I own shares Silver oz. "in ground" means and counts all "silver oz. in the ground" as the same, but they are NOT EQUAL. Some are more certain and others are more speculative. Some are higher grades, some are lower grades. They range from most certain to least certain such as: "proven & probable reserves," "measured, indicated, inferred resources." This single number next to each stock symbol above represents the approximate number of ounces of silver in the ground you are buying title to when you invest the equivalent of one ounce of silver into buying shares in the company at current prices. Here's the math on how to get it. 1. Get a market cap in U.S. dollars. Divide that by the silver price, so the market cap is denominated in terms of silver ounces. Then, divide the ounces in the ground by the market cap as denominated in silver. This tells you how many ounces of silver in the ground you are buying when you give up one ounce of silver in you hand for shares of stock, instead.
(It does not include zinc, or copper, or lead, but it does include gold at a 1:10 ratio of gold:silver.) At goldsheetlinks.com, they add 100% of proven & probable reserves, but only 70% of measured & indicated resources, and only 50% of inferred resources. I don't do that. I count them as all the same.
I believe that the two most important numbers that a silver mining company can report are the resources in the ground, and the number of their fully diluted shares. Of course, there is much more to a mining company than that, but without those numbers, it is extremely difficult to even start an evaluation. This report highlights those key numbers, where possible. If you think those numbers are also important, please email the executives of the mining companies you own, and ask them to make sure their numbers are clearly published at their websites.
To quickly "tab" down to the company you are interested in, note the symbol. Then hit "control-F" to "FIND" the symbol below. ___________ If I use a word you don't understand and is not listed in the dictionary at www.m-w.com you can look up the meaning at http://investorwords.com/
------------- WEEKLY COMMENTARY (All new in this section):
At the present time, there are quite a few mainstream commentators who are suggesting that if interest rates go up, it will be bad for gold and silver. I wonder if this story, repeated in the mainstream press, is responsible for the downturn in precious metals? It might, but if so, I strongly suspect this is the last time we will see these low prices for gold and silver. It's as if the full power of the press is now beginning to discredit gold and silver, so as to create an entry point for a very powerful and very wealthy buyer. Did you read in the last few weeks how the Rothschilds are quitting the gold fix? I believe this means they will no longer work to suppress the gold price, which I believe means they are likely ready to buy gold and silver for themselves.
I think the story about how rising interest rates will be bad for gold and silver is utterly ridiculous. In the last year, silver has moved up 50% to 100% from $4.20/oz. to $6 or $8.40. Gold has moved up from $250 to $400 over the last two years, a gain of 60%. Why would anyone who has enjoyed such gains move into bonds paying 5%? Any idiot can see that 5% is much less than 50% or 60% or 100%.
Can the "risk free" nature of bonds make up the difference? Absolutely not! Bonds have many more risks that gold and silver do not. First, there is currency risk, as inflation can wipe the value of bonds, and currencies, to zero. In contrast, it is impossible for the value of gold and silver to drop to zero. Second, there is default risk, as those who would repay bonds may be unable to do so.
For example, Ford Motor Company is $180 billion dollars in debt, and only has a market cap of $27 billion. If it were realistic for Ford Motor Company to repay that debt, by, for example, earning, say, 10% of their debt, which would be $18 billion each year, it would take 10 years to repay it all, (at zero interest), and the market cap of Ford would likely be about $180 to $360 billion, which it clearly is not. Therefore, it is more realistic to consider that Ford will eventually default on their bonds. Sure Ford can make payments on the interest at the present time, especially if they are allowed to float more bonds and refinance at low rates. But if rates climb significantly? Ford will probably default on their bonds. Ford motor company will not go away or lose the name, it will likely just be reorganized. After bankruptcy, the shareholders will typically get nothing, and the bondholders will be issued stock in the company. It's a lot like the bank re-possessing your house if you stop making payments. The house does not explode, the house still exists, it's just owned by someone else afterwards.
I'm not trying to pick on Ford Motor Company. General Motors is in the same situation, but even worse. GM has a market cap of $25 billion and has a debt of $280 billion. GM is actually selling for less than the cash they have on hand, as they have $28 billion in cash. But with that debt of $280 billion, who cares? GM's cash is 1/10th of the debt. But how can that debt be repaid unless there is massive inflation? And if GM is counting on massive inflation to save them, then GM should take that $28 billion and start buying silver and silver stocks!!! Of course, they won't be able to spend even $1 billion on silver without moving up the price tremendously, because there isn't that mush available on earth, but that's the point. The point is that by taking this course of action, GM could at least help to cause the inflation that may save them! As GM has tried to "transform" itself into a finance company, by issuing credit cards and doing mortgages, they should at least do the wisest thing in finance right now, which is to buy silver and silver stocks!
The important point to remember is that if the trend for interest rates is up, then the value of risky bonds will be going down, because bond values move inversely to the interest rate. If interest rates are headed up, and bond values are going down, then it must mean that people will be selling bonds. It is such selling pressure on bonds that moves bond interest rates up in the first place! Now, where will they put that money from the sale of their bonds, and how much money are we talking about? If you have been paying attention each week, I have a little chart below that lists such figures, and here are a few of them, that illustrate the relative size of the bond market compared to the precious metals markets:
$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 $2,572,160,000,000: Marcos/Phillipine "black/unofficial" gold: 200,000 (to 500,000) Tonnes @ $400/oz. (Book: "Gold Warriors") $1,860,000,000,000: World "official" gold, 145,000 T @ $400/oz. http://tinyurl.com/vrcc $100,000,000,000: all the world's gold stocks (estimated?) $75,000,000,000: Money flowed into Equity funds in the first quarter, 2004 $7,090,000,000: all the world's silver stocks (59 of them on this list, as of Dec. 5th, 2003) (Perhaps $10 billion by April?) $1,225,000,000: 49 mil oz. of registered COMEX silver @ $25.00/oz. http://tinyurl.com/vrcw
Thus, if interest rates are headed back up, due to inflation, and bond values are headed down because people will be selling bonds, what will they be doing with the proceeds? Hold cash during inflation? Not likely. They will buy gold and silver. And as you can see, the size of the gold and silver markets will not be able to withstand the buying power of even a paltry $1 trillion dollars, without prices of gold and silver heading up like crazy.... such as to $3000/oz gold and $300/silver just for starters, or perhaps even driving the value of paper money completely to zero!
Look in my chart above, about how much the money flowed into Equity funds, first quarter, 2004. It's $75 billion. At times in history, silver stocks were the most popular investment class. Look again at that money flow compared to the figure below it. One day, the most popular thing to buy will not be equities, but it will be silver stocks. Look again at the relevant comparable figures. Money flow: $75 billion. Silver stocks: $7 billion. Imagine $75 billion each quarter trying to buy $7 billion worth of silver stocks. That's where we are headed as interest rates go up, and bond values crash. Get the picture?
And of course, as interest rates go up, the value of shares in companies in debt like Ford and GM will also crash. With bonds and stocks ready to crash, where will people put their money? Silver and gold!
Metals prices will be heading up 100% or more each year from now. Bonds will not be an attractive alternative to precious metals until interest rates are in excess of 100%. And that would still not tempt me, because I will most likely continue to enjoy 300% to 1000% annual gains in silver stocks.
------------------- Real Estate!
My parents are heavily invested in real estate. So I have discussions with them from time to time about the merits of real estate verses silver bullion. Here are a few of the recent arguments.
I said that real estate is a bubble, propped up by excess government loans, coming primarily from Freddie Mac and Fannie May. I think this source of money for real estate is uneconomic, and unsustainable. Who, in their right mind, would loan money at 5% rates for 30 years, when inflation (as measured in gold and silver) is roaring along at 30% to 50% to 100% per year? They agreed that investing in bonds is a bad deal. They agreed that the dot-com bubble was based on "uneconomic and unsustainable" business plans. They did not see the connection.
They remembered the Savings and Loan Crisis in the early 1980's, which was the bust of the home lenders after gold prices had risen in the 70's. Again, they did not see the connection.
I said, look, one of the greatest market crashes of all time was the stock market of 1929, that started the Great Depression. The market crashed because the government was creating too much money, and too many people were using that artificially created money, and they borrowed that funny money to invest in stocks. Today, it's the same thing as so many people are using borrowed government funny money to buy homes!
There was nothing I could say that would convince them to sell real estate. One of their justifications was that, they said, "You know bullion, we know real estate. You invest in what you know." I said, no, you don't know real estate at all, because how is it economically justifiable to loan money at 5% when inflation is running at up to 50% or 100% in gold and silver? (Silver's rise from $4.20 to $8.40 is 100% annual inflation.) They had no answer.
Another of their justifications was that, "We know most people borrow money for homes, but we are planning on paying off all of our rental properties within 10 years." I countered, "Who cares if you own it outright? That does not mean the values are not still inflated due to the heavy borrowing of all others! Investing in stocks in 1929 with fully paid-for positions would not have been a great idea either. You just don't buy over valued assets, don't you get that?" Again, they had no answer.
Another of their justifications was that, "We will be receiving rent income from our rental properties that we will own outright, with no payments, and we can live off of, and retire on, the rental income." I said that's still no excuse to own overvalued assets.
Another of their justifications was that since real estate is so overvalued in more wealthy areas, those people are moving out of such an area, and moving into the more middle-class real estate area, thus helping to boost home values in the middle class area. This kind of thinking astounds me. Here is proof of a real estate bubble, because even the wealthy people, the "smart money" recognize the problems, and are now scaling down their holdings of real estate! This is proof of a market top, in my opinion, and is not a sustainable source of market demand.
One of my friends from college, who has done very well for himself in business, has been buying silver and silver stocks for about the last year or two, based on my recommendations. He's done very well, obviously. He bought his first real estate in about 1998. Finally, he decided to sell one of his properties, and invest the gains in silver, and silver stocks. To him, I say, "You'll be happy you sold!" His home was on the market as silver was up towards $8.40/oz., and he was feeling he almost missed his chance to get great prices. Today, his home was sold, he is cash rich, and extremely happy that silver moved back to about $6/oz., and he is buying in at such low prices.
-------------------- Now, let's think for a moment about an economy, and think what an economy needs for people to be most productive, and wealthy.
If housing costs are high, that's a problem, because everyone needs a place to live. It is not good for a "need" to be expensive. If housing costs are high, then a large portion of a family's budget will go toward paying for housing, which means they will have less money for other things. High housing costs are even worse when people are required to borrow money for a house, because typically a person will pay for a home three times over during the course of paying back a 30 year loan. Therefore, paying three times more than the purchase price for a house, that is expensive in the first place, is really, really, really bad for an economy.
In God's economy, when the nation of Israel went to the promised land, the land was distributed to each man, and each man had a portion of land, for free. The USA was founded the same way. The west was settled by the give-a-way of free land.
High land prices are also hurtful for businesses that provide services. If land costs too much then every commercial enterprise has to make a lot of money to pay the rent, or otherwise they go out of business. If businesses are squeezed with high rent costs, then the customers have to pay higher prices for goods and services, which, again, is bad for an economy, as high prices for things people need is not very economical.
Now, in contrast, if precious metals prices are high, who would be hurt? In theory, nobody, because nobody "needs" any specific set amount of precious metals, (except, of course, for a few industrial users). You can't eat gold, as the gold detractors have said, but this is precisely the reason that precious metals can be expensive, without hurting anyone. The ones who are primarily hurt if precious metals are high are those people who are in debt to pay back loans in precious metals. (And, of course, the government printing press and the banks.) For the average person in an economy, however, it does not matter whether an ounce of gold is $300 or $30,000. Either way, a person will receive a day's wage for a day's labor. Actually, the higher the prices for precious metals, there are many beneficial effects. First of all, there will be plenty of mining jobs, which are typically highly skilled well-paying jobs. Secondly, precious metals become much lighter, and thus easier to use in commerce. It is much easier to use silver in commerce when a day's wage is a piece of silver the size of a dime. Today, however, a day's wage is $100, which, divided by $6/oz., means 16.6 ounces of silver, which is rather inconvenient in terms of weight and size. (And proves that silver is cheap and undervalued.)
A friend wrote to me that in 1915 a friend of his worked for a dime a day. A Canadian dime of .925 silver is .06 of an ounce for a days pay. If a journeyman gets paid $200 dollars per day or .06 ounce/silver what should the silver price in ounces be? .06 x 16.7 = 1. 16.7 x 200 = $3,340 for an ounce of silver! Therefore, not only will housing prices come down, way down, and precious metals prices head up, way up, both movements will be much, much better for the economy overall.
Producers! It seems most investors who first understand the silver story will want to own a silver producer. They expect this will help them get the quick profits. Wrong! Most silver producers are way overvalued. They sell at up to 30 times earnings. This means you'd have to wait 30 years to get your money back, in terms of earnings. That's a long time. It's almost as bad as investing in a bond paying 5%! In fact, a company with a P/E ratio of 30 is the rough equivalent of a bond paying 3.3%!
The most popular silver producers, like Hecla (HL) have had a market cap of up to about a billion dollars recently, and they produce about 9 million ounces a year. I'd rather own an explorer, that has plans to become a producer rather in a year or two, that might produce, say, about 2-4 million ounces of silver, but be valued at only about $30-$100 million. (There are a few companies on this list that fit into that category. Please don't email me to ask me which, read this report!) -------------------- Here is an outstanding article published this week: What Gold and Silver Analysts Overlook - Dr Fekete
Dr Fekete's article is summarized at http://www.goldisfreedom.com as, "Professor Fekete says analysts are overlooking falling basis as a cause of coming backwardation in gold and silver markets."
Dr Fekete emphasizes that gold and silver are money, and do not behave as other commodities might behave in the market place. He says that gold and silver may get more expensive in the spot market or the current contract month than in future months, which is called "backwardation". This would mean that market participants are losing trust in the viability of the exchange, and would tend to realize there is a greater risk of default in the futures contracts. Eventually, it could wind up where the spot price for gold and silver in the cash markets trades very high relative to the futures markets, and this would likely happen right before a default in the futures market. Here are excerpts from his article, a few of what I consider his most important paragraphs. Dr. Fekete writes:
Backwardation is abnormal, yet it may occur. When it does, the regime of irredeemable currency will start to crumble. People in trying to save their financial future will take flight to the monetary metals. They will scramble to mop up the dwindling supply that is allowed to trickle down. Then all of a sudden all offers to sell the monetary metals are withdrawn. Supply goes to zero, facing an infinite demand. That such a development is not fanciful but a true description of economic reality as it unfolds is confirmed by history. Supply of the monetary metals went to zero and demand to infinity many times before, in France (the assignat and mandat inflations), in the United States (the continental inflation), in Germany (the Reichsmark inflation), to mention but a few of the notable cases. ...
Moreover, previous episodes of hyperinflation affected isolated countries which had embraced the regime of irredeemable currency out of desperation, while the rest of the world stayed the course of monetary rectitude. In the present situation the entire world has been inflicted with irredeemable currency. There are no gold standard countries around that could lend a helping hand to countries that want to stabilize their currency. My description of hyperinflation is not in terms of the quantity theory of money, but in terms of a model where the relentlessly declining gold basis leads to backwardation destroying the gold futures market. When all offers to sell cash gold are withdrawn, producers of essential commodities such as grains and crude oil refuse payments in dollars, and demand gold in exchange for their product. The dollar and other irredeemable currencies will go the way of the assignat.
Backwardation in gold should therefore be considered the self-destroying mechanism for the regime of irredeemable currency that “only one man in a million may identify and understand” (my thanks to Keynes for the felicitous phrase). This is where supply/demand analysis is utterly useless. The huge stocks of monetary gold are still in existence, yet zero supply confronts infinite demand.
Several people have written to me, saying they either do not understand what I mean (or they claim I have no credibility) when I say that gold and silver prices can go to infinity dollars per ounce. I'm saying the dollar will one day be utterly worthless. You would not be able to buy any gold, or any silver, no matter how many pieces of paper money you are holding in your hand, because eventually it will be too widely recognized that dollars are, well, worse than used scrap paper--because dollars even smell bad.
Dr Fekete is, indeed, suggesting that once the futures markets seize up due to defaults, we will have runaway prices for gold and silver in terms of any paper money anywhere in the world. Or, it might be the other way around, that we will have runaway prices for gold and silver in terms of paper money right before the futures markets default. The point, as I see it, is that gold prices could one day be trading higher and higher, up to about $600/oz, or even $1500/oz., and then the futures markets default just as the physical markets seize up with no trading. Described another way, gold could "gap up" from about $1000/oz. to infinity per ounce as the futures markets default.
Since the governments of the world stopped redeeming their currencies in terms of gold, the futures markets have assumed the role of the last place to go if you want to get real gold and silver for your paper money. Once that exit door closes, and that pricing mechanism is discredited and closes up shop, there will literally be no place on earth to go to in order to buy gold and silver in terms of paper money. And in that event, we may well see all paper money on earth become utterly worthless in a matter of days or weeks.
-------------------- At present, there is still not a single silver mining company that has announced that they will be stockpiling silver, or have stockpiled silver, to use it in place of a stockpile of paper money. Clearly, silver prices are thus at rock bottom, if not even the silver mining companies are using silver as money.
When this changes, when silver miners begin to use silver as money, it will be a clear signal of a major bull market move. -------------------- This was a very positive article on silver, despite the title.
You may have noticed a new link at goldismoney.com regarding asset protection. I figure some of my readers may be interested in learning how to legally protect your assets from lawsuits and creditors.
Obviously, the entire point of investing in physical precious metals is that they are the ultimate way to protect your assets. Gold and silver in your home safe are "off the books". And the value of gold and silver cannot go to zero. So precious metals investors are probably already interested in protecting their assets, which is a very good reason to own precious metals in the first place.
But what about your brokerage accounts of your silver stock holdings? How safe are they, legally, from seizure? We must understand how to keep the wealth we have, and keep it safe, and protected from lawyers, tax collectors, scam artists, sue-happy people, and other thieves… which is what asset protection is all about.
Let's look at some statistics. More than nine out of every ten lawsuits in the world are filed in the United States. It is estimated that 80,000,000 lawsuits are filed every year in this country. This means that if a person or business entity earns more than $50,000 per year, they will be named as a defendant in a lawsuit, on average, once in four years! And if that's average, some will be sued more often (and others less), of course, depending on the risk of the business or profession.
Although the USA has less than 5 percent of the world's population, America has more than 70 percent of the world's lawyers. And it's getting worse. According to recent statistics from the American Bar Association, there are currently more than 1,000,000 practicing lawyers in America. And there are nearly 150,000 students presently attending law school. When they get out of school, the only way some of them will ever make any money is to sue people.
Protect yourself with gold and silver. And protect your brokerage accounts by learning about asset protection. (IRA accounts are already very safe from seizure.) For more info, see: http://www.trustmakers.com/index3.html
Charles Savoie wrote a very compelling argument for getting involved in politics: to protect our property rights, specifically, the property rights of silver investors. He has convinced me that this is important. Therefore, I've decided to help. So, I'm asking for help from you, my readers.
HELP WANTED: Someone with experience who can run a Political Action Committee to advocate the use of gold and silver as money. If we start such an organization now, it will likely be a very big thing with gold and silver investors who will soon be growing increasingly rich and who will need a political voice. Help me with this project, and I'll help by providing exposure, guidance, and objectives. I need someone with the legal experience to help make this possible, and form the legal organization. Also wanted are people with good public speaking skills, good writing skills, and advertising experience. Email me at firstname.lastname@example.org
------------------ Considering the topic of political action... The sponsors of the Sound Money Bill in New Hampshire are now looking for donations so they can take this to other states!
Current status of the NH bill: The bill will live until the November elections. It'll have a different #, but we now have 6 months or so to get EVERYONE we need on board.
Now looking to raise $10,000 to $15,000 for "phase II" with $1300 of expenses left over from phase I. Phase III will be to take it to other states!
Send any donations you can, to: [These are not political campaign donations.]
SOUND MONEY FOR AMERICA, c/o Henry W. McElroy, 15 Iroquois Rd, Nashua, NH 03063 ANY AMOUNT, ANY LEGAL TENDER CURRENCY - U.S. OR FOREIGN !
Video copies of the sound money bill press conference are available for a $35 donation.
For more info, contact Rep. Henry W. McElroy, NH State Representative Sponsor of the bill 603-233-5892
Harvey Wharfield 978-635-9586 ------------------
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.
Price: $39.95/monthly, or $49.95 for a single month, or $295.00/year To order: Click here
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------------------------ General Commentary on Silver (slightly modified from last week):
As the New York Times, January 11, 1859, page 2 said--- "It is well known that the most colossal fortunes the world ever saw have been based on silver mines..." --quote found by Charles Savoie ----------------------------
WHERE and HOW to BUY SILVER 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.
---------------------------- 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.
Note, there is virtually no monetary nor investment demand. Note, the 2002 mine production (585 mil oz.) is greatly exceeded by industrial, photo, and jewelry demand. (838 mil oz.). Note the chart on page five, "Supply from above-ground stocks".
The difference between mine supply and industrial demand was met by a combination of three factors: 1. Government selling, 2. Private selling, 3. Recycling
U.S. government selling is ending, as their stocks have run out, or will run out. This factor will reverse, because the U.S. government will need silver to continue their coin program, and/or need silver when they wake up and decide they need to replenish their strategic stockpile for domestic security. Silver is a war material. China's selling of silver will also likely turn into buying, as China will need silver for continued industrial development, or when they also lose faith in the U.S. dollar.
Private selling has been rapidly shrinking and is now almost ended, and should turn into buying, and become monetary demand. Monetary demand is everything in the silver supply / demand situation. It's not now. Now, it's nothing. But it will become something incredible, because the dollar is dying.
Ted correctly points out that a lower price creates excessive demand from consumers. However, Ted Butler does not point out, and neglects to mention, that a perpetually low price also creates lack of demand from investors who are "trend investors".
I think most silver experts over-analyze all the supply and demand factors of the silver market. No factor is more important than monetary demand. The force of photographic demand is like a light breeze compared to the hurricane or tornado of monetary demand. Monetary demand is everything. ----------------------------
Consider the gold market for a moment: Even short selling at the COMEX is nothing compared to monetary demand. The short position most certainly helps to depress the price of gold as the short position is growing larger. However, it adds fuel to the fire if there is short covering, and thus, it can boost the gold price later. But the commercial short position on the COMEX is next to nothing compared to the non-reported "over the counter" trading that is done that does not appear on the COMEX.
(Numbers in metric tonnes, 32,152 oz. per tonne.)
870 tonnes -- the paper position at the COMEX, 280,000 contracts for 100 oz. each. 5,000 tonnes -- the official number admitted that the central banks have sold. 15,000 tonnes -- the number GATA research shows that central banks have sold / or leased. 30,000 tonnes -- the number of official central bank gold, minus either the 5000 or 15,000 tonnes. 145,000 tonnes -- all the gold mined in the history of the world. 2,600 tonnes -- annual mine supply 4,000 tonnes -- annual demand
And all of that is nothing compared to the amount of dollars out there that exist that could buy gold. $20 trillion bonds, $9 trillion M3 = $29 Trillion. A mere 1% is $290 Billion, which, at $500 /oz. is a massive demand of 18,039 tonnes. Do you understand what that means? That means that far, far less than 1% of dollars, in either bonds or M3 can buy gold, because there simply is not that much gold available.
Long before 1% of U.S. paper dollars tries to buy gold, gold will be going up well over $1000/oz., and silver will be headed up over $50/oz.
---------------------------- To scare away investors--that is the entire reason gold and silver are manipulated in the first place. Only the trend investors can be deceived. The problem is that nearly everyone is a trend investor. So few investors understand value. If people knew the facts and used their brains, the available above-ground refined silver would be gone by tomorrow, and the price would be well over $20-50/oz. But don't trust me, follow the urls and check the numbers:
1,000,000,000,000: 1 Trillion dollars 1,000,000,000: 1 Billion dollars 1,000,000: 1 Million dollars $33,000,000,000,000: World bond market, yr end, '01: http://tinyurl.com/vr7u
$26,400,000,000,000: World stock market, June 2002: http://www.nyse.com/press/1044027443845.html $20,200,000,000,000: U.S. bond market, yr end, '02: http://tinyurl.com/vr7g $11,300,000,000,000: NYSE U.S. stock market, April, '04 (363 bill/s x $31.14/s ave.) http://nyse.com (See: Market info: quick facts) $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 $2,572,160,000,000: Marcos/Phillipine "black/unofficial" gold: 200,000 (to 500,000) Tonnes @ $400/oz. (Book: "Gold Warriors") $1,860,000,000,000: World "official" gold, 145,000 T @ $400/oz. http://tinyurl.com/vrcc $700,000,000,000: U.S. budget deficit (current). $554 billion 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?) $75,000,000,000: Money flowed into Equity funds in the first quarter, 2004 $7,090,000,000: all the world's silver stocks (59 of them on this list, as of Dec. 5th, 2003) (Perhaps $10 billion by April?) $1,225,000,000: 49 mil oz. of registered COMEX silver @ $25.00/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 68 ounces of silver to buy 1 ounce of gold. Historically, this ratio was 15 or 16. Given the silver shortage, this ratio will hit 10:1 or 5:1, or even 1:1. Thus, gold is perhaps 68 times more overvalued than silver.
Silver is overvalued relative to certain select silver stocks, perhaps by a factor of 3 or 10 or 20 to one.
Thus, if you multiply all those numbers, 258 x 68 x 10, You will see that bonds and currency are overvalued relative to select silver stocks by a factor of 139,000 to one. In other words, if silver stocks reach their true value, and paper currency disappears as it always does, then you might expect certain silver stocks to go up in relative value by a factor of 139,000 times more than they are worth today. By that time, you should definitely sell the silver stocks, and buy gold.
Can silver stocks really appreciate so much? Is there historical evidence for such a crazy thing? Yes.
See http://www.sterlingmining.com/old.html Excerpt: "CDE rose from penny stock status (.02 in 1967) to an NYSE-listed, $60 per share stock in 1980. In fact, the average share on the Spokane Stock Exchange rose in value nearly 16000% (yes, sixteen THOUSAND percent), as America could not get enough of silver and silver stocks."
CDE rose by a factor of 3000, or 300,000%, and by 1980, the metals boom was stopped short, and paper money's death was postponed. If paper money dies a death that lasts a generation world-wide, then even greater gains should have been expected.
For this reason, a wise silver stock investor should NEVER sell silver stocks for paper cash. A wise silver stock investor who looks for value would never sell a fairly valued silver stock for an overvalued silver stock that traded for hundreds of thousands of times more value than it should be. Likewise, there is no excuse for a silver stock investor to have any cash or money market or bonds in his portfolio for any reasonable length of time, except for when selling one silver stock to raise the cash for another silver stock, or for when you need to raise the cash to buy silver, or a private placement in another silver stock.
So, if you want some fairly liquid alternatives to cash, in case you don't know what other silver stocks to buy at the time, here they are: 1. Buy silver. You can hold silver in an IRA. 2. Buy CEF. Central Fund of Canada, ticker symbol CEF. It's gold/silver bullion fund. It has 50 oz. of silver for every 1 oz. of gold. The fund is fairly liquid, you can buy it as easily as any other stock, and is a good cash substitute. Unfortunately, given the current ratio, about 55% or more of the value is in gold. 3. Buy a fairly large cap silver stock, with fairly large volume, that is still fairly cheap on the list. SSRI is probably the best candidate.
The sheer stupidity of big money not recognizing the value of the world's remaining silver is utterly shocking to the rational mind. Clearly, bond holders are utterly deceived, and totally unaware of the situation. All my readers should understand and know that bonds were originally invented to suck the capital and money (gold and silver) away from the people. Bonds today are a paper promise to repay paper. What a con game! Are bond holders conservative and safe? No, they are fools! There is nothing safe about holding a paper promise to receive more paper when we have been experiencing hyperinflation for the past two and a half years!
---------------------------- 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!
How bullish am I on silver? Here's an interesting way to put it: "68 times infinity" dollars per ounce.
I believe the dollar will eventually be destroyed, likely within my lifetime, hence the "infinity" part. I believe the ratio of silver to gold may be equal during a spike, when the market realizes that above-ground refined silver is more rare than gold. Thus, silver may outperform gold by a factor of 68 times better. Currently, the ratio is 68 ounces of silver can buy one ounce of gold or 68:1.
I may end up selling silver for gold, some at the 10:1 silver to gold ratio, some more at 5:1, and I would sell any silver remaining at a 1:1 ratio, that we may hit during a supply/demand crunch during a paper money collapse.
How we can tell if silver is leading gold, or if gold is leading silver? IE, which is going up more, faster than the other? The way you can tell is by looking at the ratio. If the silver:gold ratio is going up (say, from 60:1 to 80:1), then gold is moving up faster (because it takes 5 more silver oz. to buy an oz. of gold. If the ratio is going down (from 60:1 to 40:1), then silver is moving up faster. So, keep an eye on the ratio.
A good website that hosts posting boards for many of the smaller canadian stocks (that Yahoo! finance does not have boards for) is stockhouse.com Click on "Bullboards". ----------------------------
This is a list of primary silver stocks.
I count a company's ounces of gold as 10 oz of silver. Why? Because I have a very strong positive bias in favor of silver over gold.
Given my bias in favor of much, much higher silver prices, then, to me, the grades of silver are far less important than buying more oz. in the ground. More oz. in the ground at a lower cost is the most important consideration for me.
My method is simple. Cost per ounce in the ground. How much do you get (silver reserve totals), and how much does it cost (market cap)? The cost is the market cap divided by the silver reserve totals. Cheaper is better. Buy low, sell high.
Disclaimers, Warnings, and Advice: I have gathered the information below over the course of several months. I believe it is accurate to the best of my ability. I may have made mistakes. I probably did. I'm human. I have collected the information from public sources such as company web sites and public information found at yahoo.com to get the stock prices. This report in no way guarantees the accuracy of the information below, since the information may change at any time. The number of outstanding shares can change as a company engages in new share issues to raise more capital through private placements, or if outstanding warrants (and options) are exercised and converted into shares, or if shares are bought back. Shares can be consolidated, or split. The number of ounces of silver in the ground can also change, as these are often only estimates. The number can also change up or down, depending on drilling results.
This report is not investment advice. This report contains information that may or may not be up to date, and may be inaccurate. I urge you to contact the company and do your own research to verify the information contained in this report.
This report is not an offer to buy or sell any securities. I am not a broker. Only your broker can buy or sell securities for you.
I urge you to consult with your investment advisor to determine whether these kinds of investments are right for you.
I also caution you to be aware of your investment advisor's advice, they are sometimes paid to push things like mutual funds, bonds and other securities that may not be in your best interest to buy. Some investment houses are short physical metal, and thus, they may attempt to strongly discourage you from buying precious metal or precious metals investments. I believe that the propaganda machine in support of frauds such as bonds and the dollar is so strong, that they may even believe what they say when they give bad advice to avoid the safety and protection of precious metals. It is most likely that they simply do not understand the precious metals market as well as you do.
All total estimates of "ounces in the ground" can vary widely. There are "proven and probable reserves" which are the highest category of certainty which is obtained through many drill holes, and then at the least accurate, there are "inferred resources" which are hardest to estimate. Additionally, every miner always has "more silver properties that need to be explored, which probably contain more silver". For the purposes of this report, I have added all those numbers together. It is believed that all these "ounce in the ground" estimates can be profitably mined at $5-6 per ounce silver, or lower. Thus, I believe that when silver trades for $15/oz. or above, that all of these ounces can be mined at a substantial profit.
I may be wrong. (I probably make mistakes in every article, and there have been updates and corrections made each week, especially as prices change.)
Mining is a risky business. You need to be willing to sustain a total loss of your investment for various unforeseen accidents. Silver stock companies can do stupid things to shareholders such as take on debt, or issue more stock at too low prices which reduces the percentage of the company you may own (dilution). Yet, they need to issue shares to raise capital for drilling, and then an even bigger dilution to build a working mine. They may sell YOUR silver too cheaply, or worse, hedge the price of YOUR silver just as it begins to go up if they lock in a price which then proves to be too low if the dollar is destroyed. Mining is a risky business as estimates of assets in the ground can change. There is political risk and environmental risk. They can't franchise the business, are stuck in one location, are subject to government confiscation, or taxes, or union wage negotiations, and corporate looting.
Do your own research. Be responsible for your own investment decisions. Again, please, before investing in a mining company, call up the company, and speak either with the CEO or the Investor Relations contact person.
So, at the very least, check the company web site, read the annual reports, check my numbers, check my math, and email the company. That's what they are there for, to answer your questions, and to speak about the opportunity of the company. Don't trust everything you read over the internet. I am a biased source. I own silver mining stocks. And I'm not a broker, nor an investment advisor. I'm just a private investor trying to make sense of this crazy world, and sharing my information and thoughts on silver companies.
Surely, there are scammers in the mining industry in the past, and there will be scammers in the future. Remember the fraud of Bre-X. The new 43-101 compliance laws put in place after Bre-X will not prevent a "certified" geologist from lying if he feels lying will create a better payoff. The Bible warns, "trust no man", yet at the same time advises us to "cast our bread upon the waters", and to not issue "false allegations" against others. Physical gold and silver provide the "payment in full" as long as the coins or bars themselves are genuine and not fake.
This report may be copied, and transmitted by other people, and may become outdated by the time it reaches you.
I can't tell you how you should invest your money, of course. The reason is that I don't know how convinced you are of the silver bull market, nor do I know how soon you will be needing the money back, so I don't know how long you can wait to see results, nor do I know how much liquidity you need. Nor do I know the size of the money you have to invest. It is very hard to invest large quantities of money in a small market cap stock.
That being said, my investment strategy seems to be working for me, so far. And so, here is how I have valued the following silver companies to make my own investment decisions.
---------------------------- (Market cap is always converted to US dollars and denominated in US dollars because I divide by ounces of silver, which are also denominated in dollars)
The Market Cap is the usual tool to value a company. It is what the company "costs to buy" if you could buy the entire company, all the shares, at the latest share price. It is calculated by multiplying the share price, by the total number of shares that the company has issued. In reality, you could almost never buy an entire company at the price of the Market Cap, but only a small portion. Usually, even small buying pressure, such as trying to buy 1% of a company, can push up the price of a stock by up to 10-50% higher. In my reports, I list Market Cap in terms of millions of dollars as "$75 mil MC".
To calculate the Market Cap, I try to get and use the number of "fully diluted shares". A company creates shares when they sell them to investors in what are called "private placements", or "initial public offerings" (IPO). These usually consist of shares and warrants, sold for cash that the company will need to grow and expand.
The "outstanding shares" is the number of shares that exist out there if you count them all, and it does not count the warrants, which are like options. The investor can "exercise the warrants" which is a right, but not an obligation, to buy more shares from the company at the set price of the warrant.
If the company does well, and the stock price moves up, all the warrants will be, or should be, exercised and converted into shares, especially if they become "in the money", and the warrants are significantly cheaper than the stock price.
Now, "fully diluted shares" is the total number of shares, plus the warrants, counting warrants as if they were all exercised and became fully trading shares. I think "fully diluted shares" is a better number to use to calculate market cap than by using "outstanding shares" as most do.
Finally, I go beyond valuing a company based on Market Cap alone; instead, I value a company by dividing the Market Cap by the assets of the company, which are usually the silver reserves in the ground. Thus, I can get a sense of what you are getting for what you are paying. And then, I denominate the whole thing in terms of silver, and not dollars, to get a more constant measure.
---------------------------- (These first three companies, BHP, GMBXF.PK, and BVN produce a lot of silver, but are way to expensive to buy for the silver exposure for your portfolio.)
BHP Billiton Ltd (BHP) http://www.bhpbilliton.com/ --'produces 40 mil oz. silver annually from one mine' Additional comments: unfortunately, BHP has a 53 Billion market cap, so we can't buy BHP for the silver exposure. IE, $53 Billion / oh, say, 1000 million?????= $53/oz.
Dear BHP: By all means, keep mining the silver if you want the silver exposure, and want to be in the silver business. But don't sell the silver. Keep it. Let the profits of your entire company accrue as an increasing physical supply of physical silver. In fact, do as Buffett did, and buy more silver if you can. It would be infinitely easier for you to buy silver from yourself than it would be to buy 40 million ounces of silver from the COMEX, which, today, might be impossible.
Grupo Mexico SA de CV (GMBXF.PK) http://www.gmexico.com/indexi.html 651,646,640 shares (2002 annual report) @ $4.00/share $2606 mil MC "Grupo Mexico ranks as the world's third largest copper producer (copper at $1.24), fourth largest producer of silver and fifth largest producer of zinc." They produced 28.2 million oz. of silver, worth $129 million, in 2002. (P. 5, annual report.) Total value of produced metals: $2527 milllion. (but the company lost money in 2002). They mainly produce copper, 900,000 tons worth $1.5 billion in 2002. Thus, silver, at 2002 prices, is only 5% of their production value. Silver is a by-product for them, not a main product. I don't have silver reserve figures, nor do I see any need to find them or add them, since they are not a primary silver producer, and I don't think anybody would be buying them for the "silver exposure". If we assume 280 mil oz. of silver (ten years reserve for production), then we still don't have anything exciting for the silver alone. $2085 mil MC / 280 = $7.45/oz. cost.
KGHM Polska Miedz --KGHM is the world`s sixth-largest copper producer and second or third in silver. --Copper/Silver mine in Poland. --Market capitalisation is about $1.52 billion.
Compania de Minas Buenaventura SA (BVN) 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. -------------- -------------- --------------
ABX (Barrick) http://www.barrick.com/ 535 million shares @ $18.38/share $9,833 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." $9,833 million Market Cap / 1710 mil oz. = $5.75/oz. silver You get "approx" 1.03 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: Over the years, Barrick has hedged their production, which many claim has helped to depress the price of gold and silver, by artificially adding to supply. (Barrick's promises becoming the extra supply.) The declining price of the precious metals has put other miners out of business, which Barrick has acquired at low prices. If Barrick goes bankrupt due to their hedges, and rising gold and silver prices, then perhaps Barrick's many properties will, once again, be sold at distressed prices.
Barrick boasts a "cash cost" of $189/oz., for gold for 2003, yet their cash has dropped from $2 billion down to $1 billion. It could be due to the hedging, locking in precious metals prices at low prices, and/or hedge covering that explains the monetary loss in the light of their low cash costs.
About a year ago, perhaps spring 2003, ABX made an announcement about covering 30 million ounces of silver they sold short. Then, a large buyer showed up in the futures contracts for about that amount. I do not know whether, or how, that has yet been resolved.
I expect silver bullion to continue to outperform ABX stock at these prices. IPOAF.PK (INDUSTL PENOLES) http://www.penoles.com.mx 397.5 mil shares outstanding (2002 annual, unchanged since 2001) @ $3.75/share $1490 mil MC 419 proven and probable reserves of silver (from 2002 annual report on website) $1490 mil MC / 419 oz. silver = $3.56/oz. You get "approx" 1.56 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: Industrias Penoles is the world's top producer of refined silver. They actually derrive more revenue from silver than any other source. But they lost money in 2002.
The word late Feb. 2004 from ECU Mini, who reported to lemetropolecafe.com, is that Penoles has hedged several year's worth of silver, that is, they have locked in to sell mostly all their silver at low prices. Set when prices were lower. How much lower, and at what price, is anyone's guess. As reported at lemetropolecafe.com, "We know the market is so tight even the world’s largest silver producer, Mexico’s Penolas, wasn’t thrilled about supplying 1 million ounces for a special project with ECU Silver, led by their extremely able CEO Michel Roy."
78.5 million oz. silver refined by the metals division in 2002, and 1 mil oz. gold. They probably refine almost all the silver that comes out of Mexico. They probably produce about 34 mil oz. of silver from their mines annually, and they have expansion plans.
I've heard this stock is tightly held, most is family owned.
Their oz. numbers are "proven & probable reserves", which is much more certain than most of the others which are mostly "inferred and indicated resources." They undoubtedly have "inferred and indicated resources" in addition to the "proven & probable reserves," I just could not find any info on that at the website or in the annual report.
Given the report in March, 2004, that Penoles has hedged silver for two years, I expect silver bullion to continue to outperform IPOAF.PK stock at these prices.
CDE (COEUR D'ALENE) http://www.coeur.com firstname.lastname@example.org(208) 769-8155 or (800) 624-2824 213 mil shares (Issued 32 mil new shares late Oct. 2003) @ $4.13/share $880 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) $880 mil MC / 225 mil oz = $3.91/oz. You get "approx" 1.42 ounces in the ground for 1 oz. silver's worth of stock.
The first week of January, CDE announced a deal for $160 million in convertable bonds! Beware of debt!
CDE continued to lose money in third quarter 2003, a loss of 10 cents/share, and they realized low prices for silver sales, $4.77. I believe they have hedged their gold production at low prices.
CDE looks like they owe both gold and dollars. A double debt warning for CDE investors!
Again, their listing of ounces is in the "reserves" category (more certain) not the "resources" category, which is less certain. They may have "resources" but like HL and Industrias Penoles, they give no estimates.
I expect silver bullion to continue to outperform CDE stock at these prices.
SIL (APEX SILVER) http://www.apexsilver.com/ email@example.com (303) 839-5060 45,023,760 ordinary shares outstanding. (Jan 30th press release) @ $15.30/share $688 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 $688 mil MC / 454 mil oz = $1.52/oz. You get "approx" 3.66 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 wayis that there are position limits on paper longs, and thus, APEX could not probably not buy that much silver bullion even if they wanted to. Ironic, isn't it? It is the most natural and sensical thing for Apex to buy silver while they wait for higher silver prices, and doing so would push up the price, but they likely will not act, and almost cannot act due to the problem of scales of size. This, to me, is so bizzare, I cannnot fathom it. I think I understand a lot, but this.... it is simply mind boggling. It's the result of a system so out of balance, it's insane, and the rational mind has no answer for the bizzare things we see today.
Look, COMEX is the last place on earth to buy silver now, in any really big size. Reports are coming in from all over that there is no bullion in significant size for sale available anywhere.
My advice to Apex would be to buy every bit of silver they can get. Even hold out a sign, put up a website, hire people to take the orders, and start buying silver, in all forms, at 10% and even 15% above the spot price. Just make yourself become the "market maker" and start buying silver from all over like a sponge soaking up water. Let the silver find you! In the long run, a 10-15% commission is nothing when the trade is this good. There may be position limits at the COMEX, but it's not illegal to offer to pay what you are willing to pay to the free market. Forget the COMEX, and make your own market!
Apex silver primarily has institutional investors.
Apex has a lot of zinc. That's an added bonus that is not factored in to my method of valuation.Zinc prices have been heading up soon, so that's another bonus. Plenty of zinc is especially good if zinc is moving up in price. Zinc hit a recent high of $.51/lb., from a low of about $.35/lb., currently at $.47. For zinc prices, see http://www.metalprices.com
And, they are not mining now, but are waiting for higher silver prices. That's also a plus. The management also seems to understand that silver will move upwards a lot. Another plus. Finally, George Soros, Billionaire, owns a bit of this one, just under 10% I read recently. That's another plus, in general, for the silver market if Billionaires are paying attention to it. There are several other zinc / silver plays on this list that investors might also consider: Canadian Zinc, Expatriate, or Metalline (I own Metalline, but not SIL.)
I do not have an idea on whether or not SIL will out perform silver bullion or not. It's hard to say, because of that huge zinc bonus. I expect most of the other stocks on this list to outperform or significantly outperform silver bullion in the long run from today's prices. GRS GAM.TO (GAMMON LAKE) http://www.gammonlake.com/ firstname.lastname@example.org (902) 468-0614 62 mil shares Fully Diluted: (Feb 27th, 2004) @ $5.78/share $358 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. $358 mil MC / 231 mil oz.= $1.55/oz. You get "approx" 3.58 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.
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" $59 mil MC / 42 mil oz. = $1.40/oz. $59 mil MC / 1000 mil oz. = $.058/oz. You get "approx" 3.97 ounces in the ground for 1 oz. silver. Exploration Potential: 94
Additional comments: Note the "exploration potential" is very large.
For more info on what's going on with Clifton, see http://www.dumontnickel.com , JV partner. One man suggested buying both Clifton and Dumont to ease the difficulty in trying to figure out their JV agreement.
Clifton has 25% ownership of a biotech firm that makes a colloidal silver. The biotech firm has a patent on a "super" colloidal silver solution made with 10,000 volts that adds oxygen that gives it more powerful antibacterial properties, and is safer since it uses less silver, which would prevent "blue skin" argyria. Normal colloidal silver that you can make at home with 30 volts works to kill bacteria by disrupting the oxygen metabolism of the cell wall, killing bacteria with oxygen. The market for safe antibiotics is in the multi Billions of dollars.
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! FSR.TO FSLVF.PK (FIRST SILVER) http://www.firstsilver.com/ email@example.com (604) 602-9973 or (888) 377-6676 38.6 mil shares fully diluted (Jan 2004) @ $1.70/share Cdn x .72 US/Cdn = $1.22 US $47 mil MC From the Company's main page at their url: "As at December 31, 2001, First Silver's mineable reserves were 12 million ounces of silver and inferred resources totaled 30 million ounces of silver. The mine is developing a 1000 plus meter exploration drift to upgrade currently identified inferred resources to mineable ore reserves and to discover new reserves." 12 + 30 = 42 mil oz. $47 mil MC / 42 mil oz. = $1.12/oz. You get "approx" 4.94 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.
Additional Comments: Pan American of Canada buys Morococha silver mine in Peru for US$35 million This $35 million acquisition is a great deal for PAAS, and a minor help for PAAS shareholders. According to the press release above, the silver mine produced 3.5 million ounces of silver a year, at a cash cost of $3/oz., which is great! At $6.50/oz, that's $3.5 x 3.5 mil oz. = $12.25 million per year profit after cash costs! That gives the acquisition a P/E ratio for the mine's acquisiton cost of under 3! What a deal!
Unfortunately, PAAS shareholders are paying way above that when they buy the stock today. After this acquisition, PAAS should have a "2004 silver production forecast to 13 million ounces from 10.1 million ounces and will reduce forecast cash costs to below $ 3.50/oz, bringing anticipated total costs to less than $4/oz for the year." Now, at $6.50/oz, that's $2.5 x 13 mil oz. = $32.5 million per year profit, after cash costs. That gives a P/E ratio for PAAS of about $1000 / $32 = 31. Therefore, considering the two P/E ratios, 31 compared to under 3, PAAS stock is over ten times overvalued compared to other silver mining opportunities that exist in the market, such as the property they just purchased.
I believe PAAS is one of two silver companies on the list today that is significantly in debt (the other is CDE).
What if your silver company decides to lock in silver prices at $8, and hedge years of production to "protect the shareholders and provide exposure to the high $8/oz. price," only to watch silver prices head past $25 and past $50/oz? Your stock could get wiped out in bankruptcy, and your investment could go to zero value! This is the danger of stocks! Your investment is subject to the whims of management!
WARNING: PAAS says at their website that they will hedge silver, in order to finance mine construction. 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.
In Silver Stock Report #13, I had a discussion with Brenda Radies of PAAS regarding the topic that they should hold silver as cash instead of paper money.
On Wednesday, the following comments from Ross Beaty, CEO of PAAS, was published at lemetropolecafe.com, of which I'm a subscriber. GATA’s Ed Steer, had been emailing Ted Butler's weekly commentary to Ross Beaty, the CEO of Pan American Silver, who replied:
Please delete me from receiving your weekly commentary. I get too many unsolicited emails already. Butler's personal criticism of the silver CEOs is quite extraordinary and utterly misguided. But he has a thick skin he says, and so he should not complain when I suggest he is simply nuts. Anyway, I don't want to read any more of this conspiracy-theory drivel. Believe it if you want, it's a free world. I don't. Ross Beaty
I emailed Ross to see if it was true that he wrote that. It not good to rely on rumor, but to get the facts straight. So, I emailed the following to Ross Beaty: ------------------------ Dear Ross Beaty,
1. Did you write this?
Please delete me from receiving your weekly commentary. I get too many unsolicited emails already. Butler's personal criticism of the silver CEOs is quite extraordinary and utterly misguided. But he has a thick skin he says, and so he should not complain when I suggest he is simply nuts. Anyway, I don't want to read any more of this conspiracy-theory drivel. Believe it if you want, it's a free world. I don't. Ross Beaty
3. And were you aware of Brenda Radies, and how she disgraces PAAS with illogical and emotional discussion on this topic, which was posted in my silver stock report #13 here: http://news.goldseek.com/GoldIsMoney/1071411060.php, Sincerely, Jason Hommel ------------------------ Ross replied with the following:
Jason, I confess I did, without knowing Ed Speer would post the email on the web. It was a knee-jerk reaction to Butler's attacks on me and his, in my view, very inaccurate comments about the silver market. Here is a more detailed follow-up I sent yesterday, for your info.
I do know of the views you hold on our use of our cash and I comment again on it below. I know you disagree with it, but there it is.
I have been pilloried by some people (and strongly supported by others) for criticizing Ted Butler and his conspiracy theories on the silver market. Many people have misunderstood my position or have simply refused to look at the facts on the "other side" of the coin.
My position is simple. I do not NEED to rely on conspiracies to know there is a profoundly bullish outlook for silver. And I can explain the market long/short reality that Ted Butler uses to promote his theories, but without needing to invent manipulations by anyone.
For example, there exist now well over 300 million ounces of silver sold forward to bullion banks by base metal mining companies in long-term hedge contracts (going out five years max.). These ounces are the ones the bullion banks use to go short in futures positions against speculative long positions. Banks do this simply to offset their risk on the hedge contracts. But none of those ounces show up in any market statistics - for example, COT reports on COMEX - because they exist in private contracts and will only be delivered by the mining companies when they are mined over the next few years. But the silver certainly exists - it is in the ground until it is mined. In addition to those ounces, there are more than 500 million ounces of identifiable silver bullion inventories that you can touch and feel today, as detailed by GFMS in its annual silver survey. Silver inventories in COMEX, Tokyo, Zurich, other European exchanges and vaults, and in Chinese and Indian government hands. Butler conveniently disregards that because it runs contrary to his theory of conspiracy. He makes extremely selective use of facts to say the least.
Please also note that my silver views do NOT extend into the gold arena, where the opportunity for government manipulation is much much greater due to the large holdings of gold by governments and the obvious bias of central bankers to hold gold prices down. In fact, I think a very good case can be made for at least some market manipulation by central bankers in the gold market.
For the record, I must also defend our position not to use our cash resources to buy physical silver. We have no surplus cash, and if we did we would give it back to our owners to decide what to do with it (like buy silver!). Our cash is dedicated to build new mines and expand our silver production. Had we bought silver at $8 an ounce we would be looking at a current loss of 25% of the cash deployed to buy silver. Not too clever. We are in business to be a mining company delivering the best possible leverage to silver to our investors, not a seller of dreams - there are plenty of exploration companies that do that. Leverage comes in two ways: asset leverage and income leverage. Mining companies give both to their shareholders. Mining companies build mines and take world prices as they are. Pan American has grown from zero to nearly $1 billion in market value in 10 years, and our production has grown from zero to over 12 million ounces (forecast for 2004) from five mines, while silver prices have hardly risen. That is good wealth creation by any measure and I strongly resent Butler's gratuitous comments to the contrary. Unless you produce you have zero income exposure to rising silver prices in the medium term, due to the normal 3-5 year delay of getting projects into production. Exploration and "resource holders" MAY some day take their properties to production but there are many risks in doing so, and if the properties don't reach production during the bull phase of the market cycle they may never get the exposure to higher silver prices that existing producers now have.
I sadly note the tendency of some people to have blind faith in the kind of loose and dubious (but strongly presented) words of people like Ted Butler, and the tendency to rely on utterly specious conspiracy theories to explain facts that can quite easily be explained without resorting to such theories. Silver has been my life for the last 10 years. I have developed good knowledge about silver markets and don't need to invent things to explain what is going on. Here are the facts: there are seriously depleted above-ground silver inventories in the world, great demand fundamentals, and constrained supply. Whenever you get those fundamentals - in any commodity - you usually see dramatic price rises. I believe that will continue for silver in the near future, as we have enjoyed in the last year. Any buying of physical silver by investors will simply hasten this. In that, I am absolutely on the same page as Butler.
Pan American is in very good shape now. We are very close to achieving our mission of becoming the world's pre-eminent silver mining company, from a standing start just 10 years ago. We now have over 34,000 shareholders owning Pan American and who have benefited as we continue our misson of delivering the best possible leverage to silver prices - in every way. In 2003 we had a "beta" of 6.6 to 1 between our share price and the silver price. In other words, for every dollar the silver price rose, our share price rose $6.60. Those who suggest an investment in physical silver is a better way than buying PAAS to play a rising silver price ignore this fact. I am extremely proud of what we have done in this company, and we are going to continue to do it as aggressively as possible in the future.
I replied to Ross with the following:
Thank you very much for taking the time to explain further.
I especially appreciate your views on the silver market, as a silver investor myself. I especially appreciate your views now that you told me the history of PAAS--I did not know it was only a 10 year old company. Well done. You are certainly doing something very right that the silver market likes.
I know it is not the job of a CEO to write weekly market commentary on silver, like Ted does, and as I'm now trying to do. But I am sure that many of your shareholders would like to hear more of what you have to say, specifically, regarding the way the silver market works.
One of the things I have learned, especially as my email list has grown to 9000 people, is that you should never assume that what you know, others who are interested in the silver and gold markets also should already know. Educating others is a continual process, especially as new investors will be drawn to the silver market. You have to always "keep it simple", and go back to the basics, again, and again.
Now, if I am finding that many people need to be educated about silver, on my tiny list of 9000, surely, many of your shareholders of 34,000 must also be in need of education about the details of how the silver market works! Hey, even I, who am trying my best to be a leader, appreciate getting the opportunity to learn from you!
My point is that the silver market needs CEOs, like you, specifically you, because of your leadership position, to issue commentary and statements once in a while that help to dispell what you see to be misinformation. A quarterly report is probably not enough. If I were you, I would strive to issue your own "silver market commentary" at least once a month--it would also serve to promote PAAS in the process.
One way to do that is through your company reports, of course, and through press releases. You can also write up your statements, reports, press releases, and commentary, and send them to the following email addresses. These guys may, or may not, publish your reports on the web, and will give your reports or commentary great FREE exposure, and will be seen by many gold and silver investors. Here is my personal list of who I send out my commentary to. Please keep this list, and sent out your next press release to it, or write up a commentary and send it to these guys, and see the positive impact it will have for PAAS.
(I included 25 email addresses here in the email, but removed them so as to prevent too mush spam hitting the editors email.)
Now as to the specifics of Ted's commentary and some of your statements. Yes, if most of the short selling of silver is through mines locking in prices, then that should not at all be "manipulative". But if there are unbacked futures, those must, of necessity, be manipulative, in my opinion.
Next, yes, if you bought silver at $8.40, then looking at today's prices, it does not seem wise. However, I wrote my article in November, 2003, when silver prices were cheap, at $5 or so. And if you bought silver then, you would STILL have a gain, not a loss, even today.
Your statements also ignore the PR benefit of buying silver... and using silver in the place of paper cash as money.
Your statements also ignore the possibility that, had you taken that leadership step, to buy silver bullion, how many other people may have been encouraged, by your actions, to also buy silver? You have no idea whether your actions could have helped propell the silver price to $10 or $15 an ounce as other investors follow your lead!
I'm not suggesting that you hold on to your paper cash and not use it for further exploration or development. Likewise, I'm not suggesting that you hold physical silver in the place of using it for further exploration and development.
I'm suggesting that in between the time when you raise cash, and when the time comes for you spend it on development, that you hold your money in the form of silver bullion. This is what LEADERS do, they innovate, and show other people how things should be done.
Your claim that all your money is already allocated, shows that you just didn't understand my suggestion at all. I suggest you use silver as money, instead of paper. When it comes time to spend the money, then you sell the silver, and give paper money to your clients, if that is what they prefer. Again, it is not a case of "either/or" to invest in bullion or invest in development. You do one, then the other, in order.
I'm also not suggeting you try to "time" the market with regard to silver buying and selling. I'm suggesting that you buy silver as you get cash, and sell silver as you need cash. This is what I do. And doing this would not decrease your exposure to silver, it would increase it, and that is not opinion, it is irrefutable fact.
Ross Beaty replied with this note:
Hey, thanks Jason. Good comments. Good food for thought too. Let me digest your thoughts and try to respond later.
We have our AGM on Tuesday, and our quarterly results on Weds mornign, plus a conference call open to the public at 1130 est Weds. I will discuss silver then and maybe some of the issues dealt with this week. you might listen in. Toll free 1-877-825-5811. You can ask a question after, but please don't ask more than one or two as there will be many others wanting in.
I responded once again:
Several more comments, as food for thought.
First. When you go to buy silver, you will push up the price. When you go to sell, you will push it down. But the net should be neutral for PAAS overall. Do both in secret so as to get the best price for PAAS shareholders, do not announce it beforehand. So, before PAAS converts cash to silver (for the short term of several months or so), I would think that the appropriate response should be "no comment" on such a policy.
Second. After having bought silver is the time to promote and announce it widely and loudly. This is your boom time for both the share price and for raising new capital. And I, of course, will trumpet the wisdom and intelligence of PAAS management as widely and as loudly and as often as I can, even though I'm not currently a shareholder... because your actions would be great for the silver market, and you would be showing a leadership role, and you would be showcasing silver's best use... AS MONEY!!!
Third. When you go to sell silver for new mine construction or development, keep this in mind. If you have to sell $20 million worth of silver for a mine or construction, and if the silver market cannot handle the selling of so much silver, then reconsider the mine construction until later, when silver prices are higher or there is more demand and volume for silver. After all, you would only plan on selling $20 million worth of silver only if you could produce many multiples of that much in silver to sell to the market. So, if, in your view, the silver market cannot absorb $20 million worth of silver, then it would give you a good last minute indication as to reconsider the mine development project.
Finally, with your permission, I would like to publish your first response because I think it's a good explanation of the situation, and good commentary.
(I received his permision to publish.) Readers, now is the perfect time to contact silver mining company executives, and demand that they take the lead and use silver as money, to increase the shareholders' exposure to the rising silver price.
MFN MFL.TO (MINEFINDERS) http://www.minefinders.com/ 34.1 mil Shares Fully Diluted (Late 2003?) @ $6.03/share $206 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." $206 mil MC / 195 mil oz. = $1.05/oz. You get "approx" 5.27 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.
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.
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 .72 US/Cdn = $ .18 US Silver resources in cuba: 8.9 mil oz., according to final feasibility study. Short mine life. $8.6 mil MC / 8.9 mil oz. = $.97/oz. You get "approx" 5.72 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.
ORM.V OREXF.PK (OREMEX RES) http://www.oremex.com/s/Home.asp firstname.lastname@example.org 24.2 shares Fully Diluted (April 1, 2004) @ $.95/share x .72 US/Cdn = $.68 US $23 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) $23 mil MC / 24 mil oz. = $.96/oz. $23 mil MC / 100 mil oz. = $.23/oz. --exploration potential You get "approx" 5.79 ounces in the ground for 1 oz. silver's worth of stock. Exploration Potential: 24
MGR.V MGRSF.PK (MEXGOLD RSCS) http://www.mexgold.com/ 52.5 mil fully diluted (spring 2004) @ $4.45/share Cdn x .72 US/Cdn = $3.20 US $168 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" $168 mil MC / 185 mil oz. = $.91/oz. You have an "exploration potential target" of 6.12 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." * TM.V TUMIF.OB (TUMI RSCS) (TUY Frankfurt Exchange) (I own shares) http://www.tumiresources.com email@example.com Nick Nicolaas IR (604) 657 4058 23.7 fully diluted shares (Dec. 2003) @ $1.10/share Cdn x .72 US/Cdn = $.79 US $19 mil MC 20 mil oz resource up to 50 million oz. silver potential but needs to be explored and drilled. 500,000 gold resource x 10 = 5 mil oz. silver equiv. Debt free, 2 projects in Mexico. Raised $2.7 million Nov. 14, 2003 $19 mil MC / 25 mil oz. = $.75/oz. ***I'm using this number*** $19 mil MC / 50 mil oz. = $.38/oz. (exploration potential) You get "approx" 7.40 ounces in the ground for 1 oz. silver's worth of stock. Exploration Potential: 15 (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 firstname.lastname@example.org Jay Oness Toll Free: 1-888-456-1112 40.1 mil fully diluted (After Dec. 16th 2003 financing) @ $5.14/share $206 mil MC (not actively mining) $14 million Cdn in cash in the till (2 mil + 12 mil financing) no debt From the "SNC Lavalin Resource Calculation" March, 2003. Indicated 158.8 mil oz. silver Inferred 54.6 mil oz. silver Total 213.4 oz. silver. Total 1.94 oz. gold x 10 (at 10:1) = 19.4 silver equiv. The capital cost to get the mine going is estimated to be US $148 million Western Silver Completes Pre-Feasibility Study on Chile Colorado Zone at Penasquito New info: 267 mil oz. silver at a grade of just over 1 oz. per tonne. (an increase of 54 mil oz. over previous est.) Brechia zone will double the numbers, and infilling inferred to indicated: probably in Jan will have 500 mil oz. silver, 5 mil oz gold. Exploration potential: 500 mil oz. silver, 5 mil oz. gold, from http://www.mips1.net/mgn03.nsf/UNID/SBAY-5SUBN6 Plus, they have two other zones that could each duplicate the success of each of the other two. So up to a Billion... oz. of silver as "exploration potential"! Feasibility: 2006-7 production timeline. $206 mil MC / 287 oz. = $.72/oz. $206 mil MC / 1000 oz. = $.21/oz. --exploration potential You get "approx" 7.72 ounces in the ground for 1 oz. silver's worth of stock. Exploration Potential = 26
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
SSRI SSO.V (SILVER STD RSC) http://www.silver-standard.com/ email@example.com (604) 689-3856 or (888) 338-0046 51.7 mil shares fully diluted (May 1, 2004) @ $9.15/share $473 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.) $473 mil MC / 744 mil oz. = $.64/oz. You get "approx" 8.74 ounces in the ground for 1 oz. silver's worth of stock.
SSRI continues to add resources through drilling and acquisition. They expect to release new numbers soon.
SSRI really is the "silver standard". SSRI has the largest market cap this far down the list, which makes it a more attractive target for people with larger amounts of money to invest.
SSRI continues to add to reserves, either through exploring, or through acquisitions. This company seems to really understand the silver story, and helped to educate me as an investor.
I attended a two hour SSRI presentation after the Gold show in SF in late November. For the most part, their properties are very well drilled, and they have a fairly solid idea on how much silver oz. in the ground they have. They started their plan to acquire silver properties and become a "silver company" in about 1993, which explains why they have such a large market cap, and so many good properties with so many ounces of silver.
Some investors like SSRI because of the diversification --SSRI owns many silver properties. I say you can get a similar kind of diversification by owning stock in many silver companies.
CZN.TO CZICF.PK (CDN ZINC) http://www.canadianzinc.com/ firstname.lastname@example.org 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, 2004 @ $.62/share Cdn x .72 US/Cdn = $.45 US $36 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. $36 mil MC / 70 mil oz. = $.51/oz. You get "approx" 10.87 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: The additional cash from the recent private placements means that CZN will now be able to drill and explore more of their property. CZN likely has much more silver in the ground, and has good profit potential.
To get the mine up and running, they might be able to pay back such debt within 2 years, but I would hope they would avoid debt, and raise the capital in additional financings.
I note several very, very positive things about this company.
1. This was the mining operation set up by the Hunt brothers, the major silver investors in the silver spike to $50/oz. in 1980 who were bankrupted by their own debts and margin calls as a result of the COMEX rule changes and silver short sale manipulation. The Hunts spent $50 million building infrastructure to build the mine. They were 90% complete when bankruptcy hit. The value of those buildings is now $100 million, and the mine only needs about $20 million (CAN) ($15 mil US) to get the mine up and running. That's much cheaper than other cost estimates of other operations. 2. The 70 million oz. of silver estimate is for zone 3 only. But there are 12 zones on the property. The zone 3 estimate is for a 10 year mine plan that involves mining zone 3 at current metals prices. 3. High Grade ores: 12% zinc/ton; = 240 lbs. zinc/ton x 50 cents/lb. = $120/ton for the zinc. 10.1% lead/ton = 202 lbs. lead/ton x 40 cents/lb. = $80/ton for the lead. 6 oz. silver/ton x $6.95/oz. = $42/ton for the silver. 0.4% copper/ton = 8 lbs. copper/ton x 1.30 cents/lb. = $10/ton for the copper. Total: $249/ton! Prices accurate as of Mid Feb., 2004 4. My method of valuation: I'm really counting only the silver, not the base metals in my "oz in the ground" valuation. So consider a significant "zinc bonus", and "lead bonus". 5. Zinc and base metals prices are moving up, up to. 50 cents/lb. for zinc! Check http://www.metalprices.com/ for updates.
GGC.V GGCRF.PK (GENCO RESOURCES) http://www.gencoresources.com/ IR: Rob Blankstein: 604-682-2205, or email@example.com 11.9 mil shares (Dec. 2003) 20+ mil shares fully diluted (April, 2004) @ $1.15/share x .72 US/Cdn = $.83 $17 mil MC --Producer in Mexico. 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 $17 mil MC / 40 mil oz. silver = $.41/oz. You get "approx" 13.43 ounces in the ground for 1 oz. silver's worth of stock.
Additional Comments: As of April, 2004, Genco is producing 35,000 oz/month of silver, earning $100,000 Cdn/month, and expects to earn $1,000,000 Cdn/month by year's end by doubling both the tonnage and the grade. Genco is also aggressivly planning on making property acquisitions.
CHD.V CHDSF.PK (CHARIOT RSCS) http://www.chariotresources.com/ 45 mil shares fully diluted October 2003 @ $.405/share Cdn x .72 US/Cdn = $.29 US $13.1 mil MC Cello Ccasa (1 project of 4) Resource Estimate - August 2002 31.4 mil oz. silver, 134,000 oz. gold. (x 10 = 1.3) 32.7 mil oz. (Still much exploration work to do.) $13.1 mil MC / 32.7 mil oz. = $.40/oz. You get "approx" 13.86 ounces in the ground for 1 oz. silver's worth of stock.
SRLM.PK ( STERLING MINING) http://www.sterlingmining.com/ RDemotte@aol.com Ray DeMotte 208/676-0599 16.6 mil shares fully diluted (Apr 2004) @ $6.25/share $104 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 $104 mil MC / 185 mil oz. = $.56/oz. $104 mil MC / 500 mil oz. = $.21/oz. (exploration potential) You get "approx" 9.92 ounces in the ground for 1 oz. silver's worth of stock. (Exploration potential is 26.)
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."
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 77.5 mil shares fully diluted as of April 1, 2004 @ $.58/share Cdn x .72 US/Cdn = $.42 US $32 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) $32 mil MC / 107 mil oz. silver equiv. = $.30/oz. $32 mil MC / 181 mil oz. silver equiv. = $.18/oz. --exploration potential You get "approx" 18.38 ounces in the ground for 1 oz. silver's worth of stock. Exploration potential = 31
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.
ADB.V ADBRF.PK (ADMIRAL BAY RSCS) http://www.admiralbay.com/ firstname.lastname@example.org 604 628 5642 -- Curt Huber-- Business Development 33.3 mil shares fully dilluted. (March, 2004) @ $1.07/share Cdn x .72 US/Cdn = $.77 US $26 mil MC They have $6 million cash. --owns an option to earn 70% interest in "Miera San Jorge's Monte del Favor property in Mexico" "An historical resource estimate based on underground sampling at Monte Del Favor is reported at 17 million tonnes grading 0.85 g/t gold and 224 g/t silver for a contained 123 million ounces of silver and 460,000 ounces of gold." "While this resource estimate is not fully 43-101 compliant, the Company considers that it provides a conceptual indication of the potential of the property." 460,000 x 10 = 4.6 mil "silver equiv". 127.6 mil oz. x 70% interest = 89.3 mil oz. $26 mil MC / 89.3 mil oz. = $.29/oz. You get "approx" 19.35 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.
PLE.V (PLEXMAR RES INC) http://www.paradox-pr.ca/image/plexmarnov2003.pdf 62 mil fully diluted (March 2004) @ $.23/share Cdn x .72 US/Cdn = $.17 US $10 mil MC --just acquired 2 silver mines in Peru Total: 1.09 mil gold oz., 28.4 mil oz. silver Total silver equiv: 38.4 mil oz. $10 mil MC / 38.4 mil oz. = .27/oz. You get "approx" 20.80 ounces in the ground for 1 oz. silver's worth of stock.
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?) @ $.42/share x .72 US/Cdn = US $.30 $2 mil MC no debt HDA's proven and probable reserves stand at 161,000 tons of ore grading an average 25.6 ounces per ton silver, and 10 percent combined lead/zinc -- 4.12 mil oz silver, not including the zinc & lead. According to Magnus, the indicated and inferred reserves total about 180,000 tons at about the same grading -- in other words, a further 4 million ounces of silver. ~8 mil oz. silver $2 mil MC / 8 mil oz. silver = $.26/oz. You get "approx" 21.31 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/ email@example.com 1-877-682-5474 Dr. Harlan D. Meade, President and CEO 88 mil shares fully dulted March, 2004 @ $.21/share Cdn x .72 US/Cdn = $.15 $13 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". $13 mil MC / 67.4 oz. silver = $.20 You get "approx" 28.16 ounces in the ground for 1 oz. silver's worth of stock.
Significant zinc bonus, about 3 times the silver value. Smelter credits are estimated at about 60% zinc, 25% silver, 10% gold and copper, and the rest, other minerals. My method of valuation puts a value on the silver only, not the rest, so this is a significantly better value than my number shows.
Call Dr. Harlan D. Meade, President and CEO 1-877-682-5474, and ask him to send you an information packet on EXR.V. It contains a good report on why he is bullish on zinc.
* MGN (MINES MGMT) (I own shares) http://www.minesmanagement.com/ firstname.lastname@example.org (509) 838 6050 Doug Dobbs 11.7 mil shares fully diluted as of the March 4th 1.4 mil financing. @ $4.81/share $56 mil MC 261 mil oz. silver resources. Previous drilling spent over $100 million drilling the property. $56 mil MC / 261 mil = $.22/oz. You get "approx" 25.79 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.
* SVL.V STVZF.PK (SILVRCRST MINES) (I own shares) http://www.silvercrestmines.com/ email@example.com (604) 691-1730 25.9 million fully diluted March, 2004 @ $1.01/share Cdn x .72 US/Cdn = $.73 US $19 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. $19 mil MC / 89 = $.21/oz. $19 mil MC / 149 = $.13/oz. You get "approx" 26.48 ounces in the ground for 1 oz. silver's worth of stock. (Exploration potential = 44++ 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.
The project in El Salvador is only 20 km from the property in Honduras, and the property in Guatemala is 15km away, so only one mill will be needed for the three when a production decision is made.
Silvercrest has been and will be acquiring more silver properties with the money raised in the late November 2003 private placement, which I think is an outstanding way to spend the money.
I own shaers of SVL.V
ABI.V ABMBF.PK (Abcourt Mines Inc.) no website Jeff Tremblay (IR) (418) 575-1169 26,000,000 shares fully diluted (May, 2004) @ $.19 share Cdn x .72 US/Cdn = $.14 $3.6 mil MC no debt., North of Montreal., 8 mil shares family owned. proven reserves... not ready to be opened, re-opened perhaps in mid 2005? --Past producer, so there's existing infrastructure. --Resource: 18.1M oz silver, 120,000 oz. gold, 303,000 tons zinc, 2,308 tons copper $273 million worth of zinc at .45/lb, $108 million worth of silver at $6/oz, $45.6 mil worth of gold at $380 $3.6 mil MC / 19 mil oz. = $.19/oz. You get "approx" 29.26 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: looking to raise $5 mil to reopen the gold mine. $5 mil to reopen the silver mine. (drilling the silver mine planned for summer, 2004) $5 mil for the zinc project.
ASM.V ASGMF.PK (AVINO SILV GOLD) http://www.avino.com/ firstname.lastname@example.org 604 682-3701 -- David Wolfin 10.9 mil shares fully diluted, Nov. 2003 (with the 4 mil new shares from PP) (proposed PP in late Oct 2 mil units at $1.27 (unit = 1 share + 1 warrant at 1.58) @ $1.12/share Cdn x .72 US/Cdn = $.81 US $9 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" $9 mil MC / 51.5 mil oz. = $.17/oz. You get "approx" 32.58 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 @ $.07/share $5 mil MC Three main properties: Bromide-- 372,000 ounces of gold? Silver Bell--15 mil oz silver? Deer Trail --287,000 ounces of gold and 27 million ounces of silver... but the lease on the Deer Trail will expire June 1 2004, so they need to raise significant money in about 3 months. 49 mil oz. total. $5 mil MC / 49 mil oz. = $.10/oz. You have an expiring lease on "approx" 55.6 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: They need $4 million to exercise their option to buy the "Deer Trail" property. They are considering various options on how to do that. Ray Brown has been in this business a long time, and is excited that he's got a bunch of younger guys working on the property now, and he's encouraged by the upward direction of the price of precious metals.
Explorers deserve their own category, since they cannot be valued by my method of looking at reserves and resources of ounces of silver in the ground. We do not know how many oz. they might have. They are exploring for that. A few explorers may also be producers.
This list, although at the bottom, in no way indicates that these companies are more highly valued than companies listed above. It is also difficult to categorize a company as an explorer, since all silver companies always hold more silver properties that need to be explored.
(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/ email@example.com (208) 769-4100 115 mil shares @ $5.30/share $609 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. $609 mil MC / 36 mil "oz." = $16.93/oz. You get "approx" .33 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 has a net income of $6.2 million for the first quarter of this year. Annualized, that's $24.8 million for the year, which gives a P/E ratio of 26.6, which indicates to me that HL is still too expensive of a stock to buy.
Hecla is the most expensive company on the list in terms of cost per oz. of silver in the ground.
I expect silver bullion to continue to outperform HL stock at these prices. SPM.V SMNPF.PK (SCORPIO MINING) http://www.scorpiomining.com 52.2 mil shares fully diluted April 2004 (after recent $16 million Cdn private placement) @ $2.47/share Cdn x .72 US/Cdn = $1.78 US $93 mil MC
*IMR.V IMXPF.OB (IMA EXPL) (I own shares) http://www.imaexploration.com 43.4 mil Fully Diluted shares (May 1, 2003) @ $2.45/share Cdn x .72 US/Cdn = $1.76 U.S $77 mil MC Exploring in Argentina. $4.5 million cash
Additional comments: As of late April, 2004, IMA expects to release a resource calculation, based on their latest drilling results, within about 3 weeks.
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 @ $2.43/share Cdn x .72 US/Cdn = $1.75 US $56 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: $56 mil MC / 500 mil oz exploration potential = $.11/oz. $56 mil MC / 850 mil oz exploration potential = $.065/oz. Exploration potential: you might get about 50 - 84 oz. silver for one oz. silver worth of stock.
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) @ $.30/share Cdn x .72 US/Cdn = .22 $8.6 mil MC (US) ---- Additional comments: They own 5.82 million shares and 388,000 warrants of Cardero at $.35, which usually is a greater asset value than their market cap. Ascot's share price is typically around 80% of the value of their Cardero Stock.)
(I'm listing this one out of order, not by market cap, and next to Cardero, because of their position in Cardero.)
MCAJF.PK (MACMIN LTD) http://www.macmin.com.au/ 450 mil shares and options (Feb., 04) @ $.135/share $61 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.
* FCO.TO FCACF.PK (FORMATION CAPTL) (I own shares) http://www.formcap.com/frhome.htm firstname.lastname@example.org 604-682-6229 165 mil fully diluted, March 2004 @ $.40/share x .72 US/Cdn = $.29 $48 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.
Metalline's Sierra Mojada Project Status Report Wednesday May 5 Zinc & Silver in Mexico: Sierra Mojada. Sierra Mojada is a Silver District! Silver: Historic production was 10 mil tons of high grade ore... historic silver production went right "direct shiped" to the smelter, non-milled. It contained 500-1000 grams silver/ton, or 17.65 to 35 oz. ton. This means 170-353 million ounces of historic "high grading," non-milled, production. (Who knows how much silver is left?) That's the question with an explorer.
Zinc: Very high grades: 11.8% zinc. Potentially the lowest production cost in the entire zinc industry due to new "oxide deposit" chemical extraction process as revolutionary as "heap leaching". Exploring for up to 4 Billion pounds zinc.
I believe this is very good for MMGG, since the Penoles agreement made it more difficult to quantify the value the company. Now, it is easier to value the company, and the existing shareholders will own more of the project and profits. It is important to note thatMMGG took the initiative to terminate the agreement. Penoles did not issue a statement indicating any intent to walk away. Penoles' delay or indecision caused them to lose the rights to their buy-in option agreement. Just like if you have an "in the money" option, it's a mistake to let it expire.
(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 378 mil shares fully diluted (April 2004) @ $.185/share Cdn x .72 US/Cdn = $.13 US $50 mil MC "The company has a policy of not hedging or entering into forward sales contracts." Cash flow positive. !!! --> + 2.5 % royalty on "Rapu Rapu" that should be worth about $1 million per year starting within 9-12 months. (a cash source for an explorer is a big plus) 14 projects in the Philippines. Producing a dore bar of 96% silver and 4% gold from Canatuan project with the following: Total silver = 7.1 mil oz silver Total gold = 182,000 oz. gold x 10 (@10:1) = 1.8 mil oz silver equiv. Total silver equiv (Canatuan) = 8.9 mil oz. + they own a drilling company with 20 rigs. + they have a "foot in the door" in China. + many other promising exploration properties in the Asian Pacific.
Additional comments: This company exploded in price from 16 cents to 23.5 cents when they announced that they would be mining in China: "TVI Pacific Inc. Receives Landmark Approval for Wholly Foreign-Owned Enterprise (WFOE) Status From Chinese Government". see http://tinyurl.com/vwbw
They are primarily a silver explorer. The bonus is they are a producer, and are cash flow positive, which are both extremely rare for an explorer. In fact, the other producers mostly all lose money!
* OTMN.PK (O.T. MINING) (I own shares) http://www.otmining.com/ email@example.com Jim Hess Tel: 514-935-2445 about 12.5 mil fully diluted. after recent PP (still not fully counted yet) @ $3.95/share $49 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.
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/ firstname.lastname@example.org (604) 646-0188 David Hottman 47.4 mil shares fully diluted (April 2004) @ $1.03/share Cdn x .72 US/Cdn = $.74 US $35 mil MC $2.8 million cash (April 2004) Amador Canyon Silver Project: 50-250 mil tonnes silver grades average 4 oz. sil/ ton in the deposit = 200 to 1000 mil oz. silver????? --very speculative at this point. Drilling needs to be done. $35 mil MC / 200 mil oz. = $.175/oz. $35 mil MC / 1000 mil oz. = $.035/oz. The inverse: you "might" get 32 - 158 ounces in the ground for 1 oz. silver.
Additional comments April 2: Nevada Pacific Gold to Initiate 25,000 Feet of Drilling on Keystone, Amador Canyon and Limousine Butte The 200 to 1000 mil oz. of silver exploration potential estimate for the Amador Canyon project is based on the size of the area, which may provide between 50 and 250 million tonnes of ore, times a low grade of 4-6 ounce per ton. 50 mil tonnes x 4 oz/tonne = 200 mil oz., the low end of the target range. 250 million tonnes x 4 oz/tonne = 1000 mil oz., the high end of the range. That target range is the expectation that the geologists are hoping the drilling will prove up. It will likely take several rounds of drilling and analysis of drill results to get a proper resource calculation, and plenty of time.
NPG.V has 10 gold projects, and one silver-but it may be big. The Chariman, David Hottman, says that 90% of the value of the company is in gold, NOT silver, and yet, I'm buying this company for the silver project of Amador Canyon only, and as if the gold componant was worth nothing. (The gold projects are a free bonus, in my book, and help to alleviate the risk of this explorer.)
Explorer in Nevada. They do not really know how much silver they might they have in the Amador Canyon project. They just did a $2.5 million private placement, and another $10 million private placement in late November. On the website, for David Hottman's bio, it says he was a founding member of Eldorado gold. "During his tenure, Eldorado's market capitalization grew from Cdn $7 million in 1992 to a peak of Cdn $781 million in 1996." Please note, exploration is risky, and costly.
Now that they are well-capitalized with over $10 million dollars, this company will likely do very well as they drill and prove up the deposits across all their properties.
I own shares of NPG.V
MAG.V MSLRF.PK (MAG SILVER) http://www.magsilver.com 28 mil fully diluted shares (Nov. 19, 2003) @ $1.31/share Cdn x .72 US/Cdn = US $.94 $26 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/ email@example.com Stephen Coates, Investor Relations (416) 368-4525 51 mil fully diluted (April, 2004) @ $.85/share Cdn x .72 US/Cdn = .61 US $31 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)
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.
MAI.V MNEAF.OB (MINERA ANDES) http://minandes.com/ firstname.lastname@example.org (604) 689-7017 Art Johnson 90 mil shares fully diluted (April, 2004) @ $.48/share Cdn x .72 US/Cdn = $.35 US $31 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: 16.7 mil oz "silver equiv" 15 mil oz. silver + 1.7 mil oz. "silver equiv" of 170,000 oz. of gold. They will be exploring for more: (The resources may be only 10% of the property.) 2.2 km stretch, open another 2.7, plus 3 other vein systems. significant high grade silver exploration potential. 7000 meters of diamond drilling. Plus a copper project, billion ton ore deposit. $31 mil MC
Additional comments: Minera Andes plans to "fast track" to production. Expecting $.17-$.18/share Cdn earnings/year, as of April, 2004
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.
QTA.V QURAF.PK (QUATERRA RES) http://www.quaterraresources.com/ Jay Oness Toll Free: 1-888-456-1112 60.6 mil shares fully diluted three main properties in North America. The main exploration project is the Nieves, near the massive Fresnillo silver mine, owned by Penoles. @ $.425/share Cdn x .72 US/Cdn = $.306 US $19 mil MC
Additional Comments: QTA.V is a Sister Company to Western Silver, WTZ above. See also Bravo Venture, BVG.V, another sister company, with 34.5 mil fully diluted shares (April, 2004)
* EDR.V EDRGF.PK (ENDEAVOUR GOLD) (I own shares) http://www.edrgold.com/ Hugh Clarke, Investor Relations 1-877-685-9775 23.7 mil shares fully diluted (April, 2004) @ $1.29/share Cdn x .72 US/Cdn = $.93 $22 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
DNI.V DMNKF.PK (DUMONT NICKEL) http://www.dumontnickel.com email@example.com (416) 595-1195 60 mil shares outstanding (April 15, 2004) does not include options and warrants. @ $.255/share x .72 US/Cdn = $.18 $11 mil MC Dumont still needs to raise and pay several million to clifton for 50%-60% of each property, and there are many properties. (See Clifton for more specifics on the JV agreement.)
Additional comments: Clifton's JV partner, doing active drilling work right now. And recent property acquisitions. I 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) @ $.17/share Cdn x .72 US/Cdn = $.12 US $11 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%) $11 mil MC
Additional comments: "Excellon ...is exploring and developing".... "a Bonanza grade Silver deposit in Mexico." The geologist, Peter K.M Megaw, is also working with MAG.V. From J. Taylor's write up on 2002: "After subtracting capital cost of US $1.8 million, custom milling charges and operating costs, management believes this underground development mine can, over the next two years, generate US $15.8 million or nearly $8 million for EXN's 51% share." That was when silver prices were under $5/oz.! The company plans to use these proceeds to further drill and explore the property. They believe the property may contain significantly more silver, as if what's known is only the "tail of the tiger"; furthermore, they believe they can fund exploration by mining the high-grade silver deposit that has been partly drilled.
BCM.V BCEKF.PK (BEAR CRK MINING) http://www.bearcreekmining.com/s/Home.asp 39.2 million shares fully diluted @ $.45/share Cdn x .72 US/Cdn = $.32 US $13 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 firstname.lastname@example.org 23.9 fully diluted Apr, '04 @ $.74/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) @ $.35/share x .76 Cdn/US = $.26 US $9 mil MC from: http://www.langmining.com/cream-mx/companyProjects_Summary.html Project B: Potential Target: 400m x 500m x 150m x 2.5 t/m3 = 75,000,000 tonnes Say at: Au 0.480 g/t Ag 149.33 g/t Silver only, that's (1 gram = .03215 troy oz.) 4.8 oz./t x 75 million tonnes = 360 million oz. "exploration potential" in a low-grade deposit. $9 mil MC / 360 mil oz. = $.025/oz. (exploration potential) --not a "resource"!!! You may get 222 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) @ $.165/share Cdn x .72 US/Cdn = $.12 US 5 year high .30 $8 mil MC
This company has many silver and gold properties. Dennis Fong is also involved with GNG.V, Golden Goliath.
Klondike has one silver property that could be producing within weeks.
(I own shares of KG.V)
* CBE.V CBEFF.PK (CABO MINING)(I own shares) http://www.cabo.ca/ email@example.com (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)
In the article, I highlight what I feel is Cabo's most imporant asset: control of 60% of the mining camp of Cobalt, Ontario. The "silver capital of Canada" produced historically, over 500 million ounces of silver.
Cabo has exposure to silver, cobolt, nickel, gold, diamonds, and drilling companies.
Regarding the contracts to acquire two drilling companies in Canada: With all the money raised lately by so many companies to do exploration work now that precious metals prices have increased, drilling companies are now in extremely high demand. Many explorers are saying they are havnig difficulty finding any drillers available!
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) @ $.42/share Cdn x .72 US/Cdn = $.30 $15 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 @ $.28/share Cdn x .72 US/Cdn = $.20 US $10 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. $10 mil MC / 75 mil oz. = .13 oz. $10 mil MC / 210 mil oz. = .05 oz. Exploration potential = 41 - 116 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 firstname.lastname@example.org Mr. George E. Coburn, President Tel: 416-362-4126 87.4 mil fully diluted shares (April, 2004) @ $.15/share Cdn x .72 US/Cdn = .11 $9 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. $9 mil MC / 45 mil oz. = $9 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 " @ $2.00/share US $4.6 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.
EPZ.V ESPZF.PK (ESPERANZA SILVR) http://www.esperanzasilver.com/s/Home.asp 20 million shares fully diluted @ $.52/share Cdn x .72 US/Cdn = US $.37 $7.5 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 @ $.34/share Cdn x .72 US/Cdn = $.24 $8 mil MC
Additional comments: Silver Explorer in Mexico in the the Sierra Madre mountains: Uruachic. Doing active drilling on their silver property, Las Bolas, "in a month" (as of Oct. 7th). They hope to take a collection of old silver mines and make them open pittable. They have some very high grades from chip samples from the tunnels, ranging from 100g to 500g all the way up to around and over 1000g/ton of silver.
GPR.V GPRLF.PK (GREAT PANTHER RES) http://www.greatpanther.com Robert Archer, President, & Kaare Foy CFO: 604 608 1766 25.4 mil shares fully diluted April 23, 2004 @ $.60/share Cdn x .72 US/Cdn = $.43 $11 mil MC
MMG.V MMEEF.PK (MCMILLAN GOLD) http://www.macmillangold.com/ 25.6 mil shares outstanding (3q 2003 report June, 2003) @ $.36/share Cdn x .72 US/Cdn = $.26 $7 mil MC
SHSH.PK (SHOSHONE SILVER) http://www.shoshone-mining.com Bill Hoyt, 785-383-9246 12 mil shares @ $.50 US $6 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 or (604) 682-0557 16 mil shares outstanding. Use "fully diluted" to be safe. @ $.51/share Cdn x .72 US/Cdn = .36 $6 mil MC Adjacent to Barrick's silver property, Eskay Creek, which is "the fifth largest silver producer in the world". 70% of the rights to The Property was once almost bought by Homestake (which was acquired by Barrick) for $35 million in 1996, and Homestake was going to fund all exploration and development. The buy out ended when metals prices collapsed, and Bre-X hit, and when the majors cut back on exploration budgets to stay alive. This means the market cap of KRE.V may be worth 100% / 70% x $35 million, or $50 million, plus exploration and development costs, to a major mining company, and likely worth much more today, due to inflation of the dollar, and the rise in the price of silver!
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) @ $.075/share Cdn x .72 US/Cdn = $.054 $4 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) @ $.14/share Cdn x .72 US/Cdn = $.10 US $4 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?) @ $.27/share Cdn x .72 US/Cdn = $.19 US $3.2 mil MC Bonanza grade "grab samples" in southern Argentina near IMA. 32 oz./T gold and 22 oz./T silver grab samples.
* AUN.V AUNFF.PK (Aurcana Corp) (I own shares) http://www.aurcana.com/ CEO Ken Booth 604-331-9333 email@example.com 45 million shares (fully diluted) (March 2004) @ $.115/share Cdn x .72 US/Cdn = $.08 US $4 mil MC Drilling to commence on high-grade, gold-silver targets. (in Mexico)
ASLM.PK (AMER SILVER MINI) 2.75 million shares issued @ $1.05/share $2.8 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 @ $.23/share Cdn x .72 US/Cdn = $.16 $3 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) @ $.295/share Cdn x .72 US/Cdn = $.21 $3 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 @ $.12/share Cdn x .72 US/Cdn = $.09 $.8 mil MC
--CBP.V is the smallest market cap silver stock that I know of. It is truly a "penny stock".
----------------------------------------------------------------- ----------------------------------------------------------------- Final Category: Silver stocks FOR YOU and I TO RESEARCH further:
I strongly recommend you try to "get ahead of me," and research these stocks to see if I left out any great values. I probably did. I simply did not have time, or could not yet find information (without using the telephone) on all the two key figures needed to get the "price per oz." in the ground. You need: 1. The number of shares fully diluted x share price to get the market cap. Then, 2., you need an estimate of the oz. in the ground. Usually, I've been finding the oz. in the ground resource estimates right off the company webpages, and I get the number of shares by looking for it burried in the financial statements like the quarterlies or annual reports, which are also usually right on the company webpages. Have fun researching for silver companies, and let me know if you find any good ones, and I'll add them to this list. TBLC.PK (TIMBERLINE RES)
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."
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."
Mascot Silver Lead Mines MSLM.PK http://www.mascotsilver.com/ Coeur d' Alene, Idaho "Though we have reserves and could conceivably mine them, it frankly makes no sense to do so at current prices. ... The end of the silver bear will bring a number of the now-dormant small companies back to life..."
Silver Buckle Mines Inc (SBUM.PK) Coeur d' Alene, Idaho
Merger Mines Corp (MERG.PK) Coeur d' Alene, Idaho
Mineral Mountain Coeur d' Alene, Idaho
Metropolitan Coeur d' Alene, Idaho
Independence Lead Coeur d' Alene, Idaho
Silver Bowl http://www.silver-bowl.com/ Coeur d' Alene, Idaho --working to get a new stock transfer 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.
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.
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
Final Disclaimer: I have not received any compensation from any public silver stock company for writing up my weekly report on "Silver Stocks--Comparative Valuations". I own shares of the following 17 silver stocks: CMA.V, PLE.V, PDO.V,AUN.V, EDR.V, IMR.V, KG.V, MGN, CBE.V, NPG.V, SVL.V, MMGG.OB, TM.V, OTMN.PK, FCO.TO, KRE.V, FR.V. These are required disclaimers by the SEC: whether I've been paid, and what I own. I believe the SEC intended this to be a cautionary note that I own these shares, not as a recommendation or endorsement. I reserve the right to buy or sell any stock at any time. I believe the SEC does not require a disclosure regarding finder's fees. Nevertheless, I have begun to receive "finder's fees" from a few companies.
-- Posted 8 May, 2004 | |
Last Three Articles by Jason Hommel, Gold Is Money
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