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-- Posted 31 May, 2004 | Digg This Article
FRIDAY, May 28th, 2004
This week's report lists 114 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 53 explorers. There are about 30 additional "silver" stocks with incomplete information. Additions & Changes from last week are in bold.
If this is the first time you have seen this report, please try to read the entire report before sending me an email. This report goes out now to over 8900 investors each week in email. You can signup, or unsubscribe, to this report at GoldIsMoney.com
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Because I have a market reach, I also receive a lot of tips about silver stocks. And thus, I believe I may have invested in some of the best ones that came my way. If you believe I may have an edge based on my work and position... then the best way for me to share this with you is to is tell you where I put my money. It's not investment advice. I offer a monthly "look at my portfolio". 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.
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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 $6.09/oz. as of Friday, 5:30 PM West Coast US, which was used to calculate the following figures. The CAN $ / US $ conversion factor is .7342. I will use .73 for ease.
How to read the following table:
Stock Symbol that works at Yahoo! Finance (Company name) / Silver oz. "in ground" for 1 oz. silver's worth of stock. / valuation price change since last week relative to silver price change (and stock dilution, and resource changes, if any) / additional comments (EXPT is "exploration potential")
- ABX (BARRICK) 0.94 even --infamous hedger (18 mil oz. gold hedged, 3 yrs production) hedged?
- CDE (COEUR D'ALENE) 1.4 down --current producer, (gold bonus) in debt.
- IPOAF.PK (INDUSTL PENOLES) 1.6 up --current producer, mostly family owned, hedged?
- SIL (APEX SILVER) 3.2 up --large zinc bonus, low grades, cash rich--$345 million! in debt
- GRS GAM.TO (GAMMON LAKE) 3.4 up --current producer, owns 26% of Mexgold
- FSR.TO FSLVF.PK (FIRST SILVER) 4.2 down --current producer, (not profitable '03 3rd q.) unhedged
- CFTN.PK (CLIFTON MINING) 4.6 up -- (111 EXPT) (colloidal silver patent bonus)
- MFN MFL.TO (MINEFINDERS) 4.7 up --significant gold bonus, $35 mil cash on hand.
- PAAS (PAN AMERICAN SILVER) 4.8 down --current producer debt free
- KBR.V KBRRF.PK (KIMBER RSCS) 5.4 down One property, high grades, with exploration potential.
- WTZ WTC.TO (WESTERN SILVER) 5.5 even -- (19 EXPT) large mine development cost. copper & zinc bonus
- MGR.V MGRSF.PK (MEXGOLD RSCS) 6.9## down (##exploration target) -- bonanza grade discovery on Jan 13th
- * TM.V TUMIF.OB (TUMI RSCS) 7.6 down -- (15 EXPT) recent bonanza grade silver discovery
- ORM.V OREXF.PK (OREMEX RES) 7.7 up (32 EXPT)
- SSRI SSO.V (SILVER STD RSC) 7.9 up --multi-property company, understands silver story
- CZN.TO CZICF.PK (CDN ZINC) 9.2 down --large zinc bonus, high grades, low start up costs, great EXPT
- SRLM.PK (STERLING MINING) 11 up --(27 EXPT) acquired the Sunshine in Cour d'Alene
- IMR.V IMXPF.OB (IMA EXPL) 14.8 NEW! --Explorer in Argentina
- GGC.V GGCRF.PK (GENCO RESOURCES) 15.2 down
- RDV.TO RDFVF.PK (REDCORP VENTURE) 15.6 up --60% gold bonus
- CHD.V CHDSF.PK (CHARIOT RSCS) 16.4 down (explorer, with inferred resources)
- FAN.TO FRLLF.PK (FARALLON RSCS) 17.6 down --(30 EXPT) low grades, silver 1/3; also gold & zinc bonus.
- ADB.V ADBRF.PK (ADMIRAL BAY RSCS) 20 down --actively expanding resources. (Huge gas bonus)
- * PLE.V (PLEXMAR RES INC) 25.2 down
- HDA.V (HUSIF?) (HULDRA SILVER) 23.6 down --very tiny, zinc bonus, low start up costs.
- * MGN (MINES MGMT) 26.4 up --60% copper bonus (low grades), start up cost ~ $250 mil
- * SVL.V STVZF.PK (SILVRCRST MINES) 27.6 up --(45+ EXPT) --(Silver in Honduras) +
- EXR.V EXPTF.PK (EXPATRIATE RECS) 27.8 even --significant zinc bonus 60% zinc, 25% silver
- ASM.V ASGMF.PK (AVINO SILV GOLD) 29.20 down --owns 49% of the Avino +4 other silver props. (silver bonus)
- ABI.V ABMBF.PK (ABCOURT MINES) 32 up --large zinc & small gold bonus
- UNCN.OB (UNICO INC) 57 up --lease expiring on largest property, June 1 2004??
* = I own shares
Explorers (by market cap, in millions):
- HL (HECLA MINING CO) .33 down --current producer (gold bonus) cash rich.
- SPM.V SMNPF.PK (SCORPIO MINING)
- EZM.V EZMCF.PK (EUROZINC MINING)
- CDU.V CUEAF.PK (CARDERO RSCS) 46-78 "exploration potential"
- AOT.V ASOLF.PK (ASCOT RSCS) -- owns percentage of Cardero, CDU.V
- * OTMN.PK (O.T. MINING) very large exploration potential
- MCAJF.PK (MACMIN LTD)
- * FCO.TO FCACF.PK (FORMATION CAPTL) Cobolt (and Sunshine silver refinery)
- * MMGG.OB (METALLINE MINE) --zinc/silver (historic high grade silver) (low cost revolutionary oxide zinc process)
- TVI.TO TVIPF.PK (TVI PACIFIC) --current producer of a dore silver bar 96% silver, 4% gold
- * FR.V FMJRF.PK (FIRST MAJESTIC) -- Bought a former silver producer. Acquiring silver properties.
- * NPG.V NVPGF.PK (NEVADA PAC GOLD) 31-156 "exploration potential" (owns 1 silver property, 10 gold properties)
- MAG.V MSLRF.PK (MAG SILVER)
- IAU.V ITDXF.PK (INTREPID MINRLS) 7 "exploration potential"
- ECU.V ECUXF.PK (ECU SILVER MINI) 4.1 down --(11 EXPT) --50% gold bonus
- CAUCF.PK (CALEDON RES)
- MMM.TO MMAXF.PK (MINCO MINING)
- MAI.V MNEAF.OB (MINERA ANDES) (gold bonus)
- * EDR.V EDRGF.PK (ENDEAVOUR GOLD) A PRODUCER (I could not yet find a listing of resources or reserves)
- PXI.V PNXPF.PK (Planet Exploration Inc.) 18
- * CBE.V CBEFF.PK (CABO MINING) --Historic Silver and Cobalt district
- QTA.V QURAF.PK (QUATERRA RES)
- BZA.V ABZGF.PK (AMER BONANZA)
- DNI.V DMNKF.PK (DUMONT NICKEL) exploring Clifton's property
- EXN.V EXLLF.PK (EXCELLON RSCS)
- BCM.V BCEKF.PK (BEAR CRK MINING)
- NJMC.OB (NEW JERSEY MIN)
- * CMA.V CRMXF.OB (CREAM MINERALS) 194 "exploration potential"
- * KG.V KDKGF.PK (KLONDIKE GOLD)
- SML.V SMLZF.PK (STEALTH MNRLS)
- NBG.V NBULF.PK (NEW BULLET GP) 45 - 127 "exploration potential"
- SDR.V SDURF.PK (STROUD RSCS)
- ATN.TO ATNAF.PK (ATNA RES. LTD) partners with Expatriate Res.
- CHMN.PK (CHESTER MINING)
- EPZ.V ESPZF.PK (ESPERANZA SILVR)
- GNG.V GGTHF.PK (GOLDEN GOLIATH) --Historic silver district in Mexico
- GPR.V GPRLF.PK (GREAT PANTHER)
- MMG.V MMEEF.PK (MCMILLAN GOLD)
- SHSH.PK (SHOSHONE SILVER)
- * KRE.V KREKF.PK (KENRICH ESKAY)
- EGD.V EGDMF.PK (ENERGOLD MINING)
- PCM.V PAOCF.PK (PAC COMOX RES)
- LEG.V LEGCF.PK (LATEEGRA RSCS)
- BGS.V BLDGF.PK (BALLAD GLD SLVR)
- * AUN.V AUNFF.PK (AURCANA CORP)
- SRY.V (STINGRAY RSCS)
- TUO.V TEUTF.PK (TEUTON RES)
- ASLM.PK (AMER SILVER MINI)
- BBR.V BBRRF.PK (BRETT RES)
- ROK.V ROCAF.PK (ROCA MINES INC)
- MTB.V (Mountain Boy Minerals Ltd)
- LSM.V LASCF.PK (Langis Silver & Cobalt Mining Co Ltd)
- CBP.V CPBMF.PK (CONS PAC BAY MIN)
* = I own shares
Silver oz. "in ground" means and counts all "silver oz. in the ground" as the same, but they are NOT EQUAL. Some are more certain and others are more speculative. Some are higher grades, some are lower grades. They range from most certain to least certain such as: "proven & probable reserves," "measured, indicated, inferred resources." This single number next to each stock symbol above represents the approximate number of ounces of silver in the ground you are buying title to when you invest the equivalent of one ounce of silver into buying shares in the company at current prices. Here's the math on how to get it. 1. Get a market cap in U.S. dollars. Divide that by the silver price, so the market cap is denominated in terms of silver ounces. Then, divide the ounces in the ground by the market cap as denominated in silver. This tells you how many ounces of silver in the ground you are buying when you give up one ounce of silver in you hand for shares of stock, instead.
(It does not include zinc, or copper, or lead, but it does include gold at a 1:10 ratio of gold:silver.) At goldsheetlinks.com, they add 100% of proven & probable reserves, but only 70% of measured & indicated resources, and only 50% of inferred resources. I don't do that. I count them as all the same.
I believe that the two most important numbers that a silver mining company can report are the resources in the ground, and the number of their fully diluted shares. Of course, there is much more to a mining company than that, but without those numbers, it is extremely difficult to even start an evaluation. This report highlights those key numbers, where possible. If you think those numbers are also important, please email the executives of the mining companies you own, and ask them to make sure their numbers are clearly published at their websites.
To quickly "tab" down to the company you are interested in, note the symbol. Then hit "control-F" to "FIND" the symbol below.
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If I use a word you don't understand and is not listed in the dictionary at www.m-w.com you can look up the meaning at http://investorwords.com/
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WEEKLY COMMENTARY (All new in this section):
This last week showed mixed results for silver stock investors over silver bullion. In relation to silver bullion, 13 silver stocks were up, of the 31 stocks on my first list.
According to several indicators, retail investor sentiment for silver remains subdued since the decline from $8.40/oz.
For example, open interest continues to decline. This means there are fewer silver futures contracts. Fewer people are interested in becoming "paper longs". And the silver price is rising off the recent bottom of $5.50/oz. Thus, dealers are covering their shorts at these "lower" prices. True, prices are lower than they just were at over $8/oz., but I suspect that a lot of these contracts are being covered at a loss from the high $4 to low $5 range.
I would like to believe that a lot of silver investors have realized the immorality and futility of gambling in silver futures contracts, and have decided to become real strong longs who would buy physical silver instead. But, more likely, they have simply given up on silver for now; as they are more likely confused, running scared, or simply disgusted at their own losses.
The reality is that we live in a world that is awash with people who are gambling with their finances. The currency markets, derivatives, and hedge funds, are a huge gamble. If futures contracts for gold are immoral (and I believe I have presented a strong case that they are), then how much worse are futures contracts for unbacked paper currencies?
Please note: a person who bought real silver at whatever price, and continues to hold, has not lost a single ounce of silver. And if you realize that silver is money, then such an investor has lost no money, even though the price for the greatest money in the world is now cheaper, temporarily.
I believe that buying silver is not a gamble, since silver is real wealth, and not fraud, as is paper money. The one who buys silver, or gold, is simply refusing to participate in the larger game of fraud that has deceived nearly everyone else.
Further, investor interest is low right now because I see that my readership is down. Fewer people are reading my reports, and fewer people are signing up to the "look at my portfolio". Fewer people are emailing me their questions about silver.
Therefore, we are running a special offer! If you buy the annual subscription to the look at my portfolio, you will get access to all the articles we have been selling at goldismoney.com! These 9 articles were selling for up to $29 each (recently reduced to $9.95!
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A reader sent me the following bit of excellent information. The subject title on his email was an understatement:
"Good Info--I hope"
Originally sent to Mr. Butler, I told him I'd send this to my 2 other
favorite silver writers: Jason Hommel and David Morgan.
Dear Mr. Butler,
I've been reading your comments and signed the petition last year and
thought I'd send you more ammunition as you battle market treachery and
thievery by the CFTC and others.
In 1940 there were 97,500 metric tons of silver or 3,134,693,250 ounces
of silver in U.S. stocks. In 2003 there were 220 metric tons of silver
or 7,073,154 in U.S. silver stocks. Lets get to the numbers: we have 442
times less silver than we had 63 years ago, and we have 1/5 of 1 percent
from what we had 63 years ago.
At today's current spot price ($5.98 x 97,500 metric tons in
1940)-$18,745,465,635 dollars worth of silver to ($5.98 x 220 metric
tons in 2003)-$42,297,460.92. From almost $19 Billion to $42 million we
went from wealth to poverty in no time flat as the central bank sold off
most of U.S. gold and silver to make certain there would be no return to
gold or silver standards in the present or future.
I've noticed when it comes to gold and silver history posted on
USGS....most of the data is hard to read and misleading. Included are
two attachments that I know you'll enjoy; the first one shows data from
August 30, 2002 (silver) that included data from 1939 to 1998 and the
second spreadsheet dated February 5th, 2004 (silver 1) with changed and
manipulated data minus U.S. Stocks prior to 1967.
Good thing I had already cut and pasted the material before it was
changed and saved it to a disk.
Sincerely,
Silver Citizen
Both reports were produced by the following two government employees, who should explain why data for silver stocks was removed and changed.
Henry E. Hilliard
USGS Silver Commodity Specialist
(703) 648-4970
hhilliar@usgs.gov
Kenneth E. Porter
Minerals and Materials Analysis Section, USGS
(303) 236-8747 x 232
porter@usgs.gov
The data is provided in Microsoft Excel Spreadsheet format
Report #1
http://www.goldismoney.com/ssr/USsilver.xls
Report #2
http://www.goldismoney.com/ssr/USsilver2.xls
(All the data is listed in metric tonnes (spelled tonnes, not tons), whereas the two reports by private industry today use millions of ounces. To convert metric tonnes to ounces, multiply the tonnes by 32152 oz./tonne.)
Here are a few of my observations of the data, and the change in data.
1. Most notably, the second report deletes historic data of silver stocks (above ground refined supplies by government and industry) going back before 1967, with the simple excuse that data before that date is "unavailable".
2. The data in the first report for silver stocks, lists a high of 97,500 tonnes in 1940. By 1945, the end of World War II, this number had dropped down to 62,400 tonnes, a number that remained fairly steady until 1960. Apparently, an enormous amount of silver, 35,100 tonnes, was either spent or consumed during the war years.
3. The next big change in silver stocks took place from 1960 to 1967. These were the last years that silver coins were produced by the U.S. Government. They stopped making 90% silver coins in 1964, and made 40% silver half dollars a few years after that. The silver stocks drop from 62,600 tonnes in 1960 to 13,500 tonnes in 1967.
4. Again, in the first report, the numbers of silver stocks do not change much after 1967. The numbers remain fairly constant until 1994, at which time the stocks were 13,900 tonnes. After that, the numbers rapidly drop until the last year in the first chart, 1998, at which time the stocks were down to 4370 tonnes. Remember, the high was over 97,000 tonnes, and we used up over 30,000 tonnes during World War II! I do not know why this change took place after 1994. However, interestingly enough, GATA alleges that their research indicates that gold began to really be manipulated around 1996. Perhaps they begun to dump silver a few years earlier to keep silver prices low?
5. The second silver report has revised data for silver stocks. The numbers are perhaps about 1/10th the size, and only go back to 1967, not back to 1939 as in the first report. They are counting an entirely different set of data for silver stocks. Here are the two different descriptions for the heading of "stocks" from each report:
Report #1: Stocks
Stock data for the years 1939–98 were recorded from the MYB. Stock data for the years 1939–98 represent the silver content of various silver materials that were stockpiled in industrial, COMEX (Commodity Exchange Inc., New York), CBT (Chicago Board of Trade), Treasury Department, Department of Defense, and National Defense stockpiles.
Report #2: Stocks
Stock data for the years 1967–2002 were recorded from the MYB. Stock data for the years 1967–2002 represent the silver content of various silver materials that were stockpiled at industrial facilities consisting of producers, consumers, and dealers. Industry stock data were not available prior to 1967. Blank fields indicate data were not reported in the MYB or MCS.
Apparently, Report #2 no longer includes stocks of the "Treasury Department, Department of Defense, and National Defense stockpiles".
Bottom Line regarding the historical stocks and the change in the numbers: The U.S. Government now refuses to report historic supplies of silver that it once owned. Why not?
It's as if our current government is trying to change history by deleting it. This is similar to George Orwell's description of a totalitarian government in his book, "1984".
Officially, the current U.S. Treasury position is that they are out of silver, and must now buy silver on the open market for their Silver Eagle coin program.
But what of the Department of Defense, and National Defense stockpiles? Are these classified now for national security reasons? I don't know.
Let's move on to discuss another topic in the data: the year 1980, and it's effects. In 1980, we saw a spike in the silver price to $50/oz. People were in a near panic about paper money, and the price ratio of silver to gold returned to the historic norm of about 15:1, as gold was over $850/oz.
With this price increase, you may think that silver would have been mined left and right in huge quantities. This did not happen. Mine supply actually decreased in 1980 from 1180 tonnes in 1979 down to 1010 tonnes in 1980. In fact, U.S. silver mine production has remained remarkably constant from 1900 down to today. It ranges from about 1000 tonnes to about 2000 tonnes.
There was a significant increase in scrap production in 1980, as 1650 tonnes were produced from scap, up from 1240 a year earlier, and way up from 221 tonnes in 1965. It seems as if there was a lot of scrap production right after we abandoned using silver as coins. But we actually had more scrap production in 1994, with 1700 tonnes, which was a huge increase from the preceding years, listing a mere 162 tonnes for 1993. And this is an interesting year, since 1994 saw a significant decline in silver stocks in the first report!
World silver production also did not significantly increase in 1980. In 1979, world production was 10,800 tonnes, and in 1980 there were 10,700 tonnes. 100 tonnes less! World production was 10,300 in 1977, and 12,100 by 1983. Again, there was not a significant spike in silver production. This should encourage silver bullion investors, and scare silver stock investors. There will not likely be a flood of silver bullion being produced if the silver price spikes up. It will take years of higher prices, and years of work and planning to bring new silver mining production to market.
The next item in the charts that I find very interesting is U.S. "apparent consumption". Our consumption of silver is significantly higher in the modern age than in the early 1900's. Before 1939, the U.S. never consumed over 1000 tonnes, yet today, we consume from 5000 to 6000 tonnes per year. Consumption really took off during World War II, as by 1942, the U.S. consumed over 3000 tonnes per year, never to dip again below that number. Even more interesting is that world production now stands at about 20,000 tonnes. So the U.S. consumes over 25% of world silver production! In 2000, the U.S. consumed 34% of world production!
Furthermore, given our silver consumption, realize that we don't even have any significant monetary demand for silver, as the U.S. general population is still engaged in more "investor dishoarding", than buying, as far as I can tell from reports from silver coin shops.
Finally, what have non-government supplies of silver stocks been doing lately? (The numbers from the second report)? In the last ten years, the numbers have declined dramatically from 912 tonnes in 1993, down to 280 tonnes in 2003. What is 280 tonnes? Times 32152oz./tonne it's a mere 9 million ounces. This is far less than what is reported at the COMEX.
All indications are that we are running out of silver. This is why the price must continue to go up.
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Because I have a market reach, I also receive a lot of tips about silver stocks. And thus, I believe I may have invested in some of the best ones that came my way. If you believe I may have an edge based on my work and position... then the best way for me to share this with you is to is tell you where I put my money. It's not investment advice. I offer a monthly "look at my portfolio". 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
If you have any questions about billing or order fulfillment, you need to contact my support staff at support@goldismoney.com and not me. I manage a large portfolio, and I don't have time to process billing requests. I don't bill any cards, my support staff handles all of that. The toll free telephone customer support line is: 877-895-6824.
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Now, I think it's time that the silver community started a letter writing campaign to the editors of newspapers around the world, to tell them about silver. The following links contain email addresses for hundreds of different newspaper's "letters to the editor"
http://www.awolbush.com/papers.html
http://www.results.org/website/article.asp?id=428
http://www.waronfreedom.org/activists/emleted.html
The first two links above have lists of emails, but the third one is awesome because the emails are all in one neat list, so I have copied it to my site, too.
http://www.goldismoney.com/editorsemails.html
This final link lists the email addresses for about 200 world newspapers, and about 100 U.S. newspapers, so you can email them all at once. You have to copy the list, and paste it into your email, and there are direct instructions on tips for submission of letters to the editor. Most editors, most papers, want letters of 250 words or less, and many also want your full name, address and telephone number. So the task is easy. But if 500 people write letters on the silver market to about 300 newspapers around the world, I believe wonderful things will happen.
Here is a sample letter:
May 21, 2004
Dear Editor,
I'm a silver investor. I believe paper money is fraudulent. There is over 30 trillion dollars, U.S., worth of bonds in the world, but less than 2 trillion dollars worth of gold, according to gold.org.
As of April, 2004, the size of M3, the money in U.S. banks, has reached 9.1 trillion dollars, yet due to fractional reserve banking, the total of U.S. currency and coin in circulation is only 724 billion dollars as reported by treas.gov.
At silverinstitute.org and cpmgroup.com, they each report that silver has been in a deficit for about 15 years, where world mine supply has been about 500 million ounces, scrap supply about 200 million ounces, and industrial and jewelry demand about 800 million ounces. The difference, about 100 million ounces, has come from investor and government selling, drawing down reserves of silver. Known supplies of refined silver are down to about 250 to 600 million ounces. At the COMEX, they are down to 48 million ounces of silver left that is registered for delivery, which you can see at nymex.com.
The governments of the world are printing up too much paper money, and the world is running out of real money, silver. I believe this will lead to the price of silver rising dramatically in value, around the world.
I urge your readers to verify the statistics I have provided, and to make their own decisions.
Sincerely,
Jason Hommel
Grass Valley, USA
Goldismoney.com
(530) 274 3450
When I sent out my letter above to that list, I received about 70 "undeliverable/delivery has failed" messages. I sent it BCC, or "blind carbon copy", which means it may be interpreted as spam. It may have had more of an impact if I sent out my letter to each address individually, but I just didn't have the time to do that this week. Maybe next month.
I also did not include my full address, which some editors require. But I'd rather keep a bit of privacy in that regard.
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I will be attending the following two mining/gold shows in the next month:
1. World's Largest Natural Resource Investment Conference...
June 02-03, 2004 - New York Marriott Marquis
http://www.iiconf.com/ny04/default.aspx
2. World Gold, PGM & Diamond Investment Conference,
June 13-14, 2004 - Vancouver, BC
http://www.goldshow.ca/
I will be speaking in Vancouver.
In case you can attend one of the shows, and if you want to know what I look like, there's a picture of me here:
http://www.goldismoney.com/about.php
General Commentary on Silver (slightly modified from last week):
The sponsors of the Sound Money Bill in New Hampshire are now looking for donations so they can take this to other states!
For news on the New Hampshire Sound Money Bill, that proposes to use U.S. Treasury minted Silver Eagles and Gold Eagles as money see:
http://www.nh-inews.org/
http://veritasradio.com/ -- site temporarily disabled.
Current status of the NH bill:
The bill will live until the November elections. It'll have a different #,
but we now have 6 months or so to get EVERYONE we need on board.
Now looking to raise $25,000 to $35,000 for "phase II", to get set up with an office and staff training..
Looking to raise $500,000 for "phase III", to take this to about 5 other states.
Send any donations you can, to:
[These are not political campaign donations.]
SOUND MONEY FOR AMERICA,
c/o Henry W. McElroy,
15 Iroquois Rd, Nashua, NH 03063
ANY AMOUNT, ANY LEGAL TENDER CURRENCY - U.S. OR FOREIGN !
Video copies of the sound money bill press conference are available for a $35 donation.
For more info, contact
Rep. Henry W. McElroy, NH State Representative
Sponsor of the bill
603-233-5892
Harvey Wharfield
978-635-9586
We also need assistance with the following.
1. Please contact your local representative to your state government. Find out whether they might support a similar "sound money bill" in your own state.
To contact your state rep to the federal goverment, see http://www.house.gov/writerep/
To contact your state rep to your local state government, you will have to find that on your own. Try searching for "contact state representative california" and replace the name of your state in the search.
2. If you know of any local representaives to your state government, who may be GOOD, LIKE MINDED REPRESENTATIVES, SENATORS, and GOVERNORS, who may like to support, or sponsor, a sound money bill in your state, please tell them about the NH initative. Copy the above, and send it along to them. And call Henry W. McElroy or Harvey Wharfield, and let them know of the other reps who may assist the cause.
3. If you have an email list to people who may be interested in gold and silver as money, or who may be good conservatives, please send out this notice to the list, so the project can move forward!
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There are two excellent annual silver surveys that are sponsored by industry.
The survey by silverinstitute.org costs $195, 87 pages.
http://www.silverinstitute.org/wssum03.pdf -- 8 page free summary of last year's report.
The survey by cpmgroup.com costs $150, 162 pages.
http://www.cpmgroup.com/SSpress2004.pdf --3 page press release.
The two reports present the case that about 500 million oz. of silver are mined each year, about 200 million oz. of silver comes from scrap, and about 100 million oz. of silver comes from investor dis-hoarding, either by individuals or government sources, in order to meet the annual demand of about 800 million oz. of silver by industry & jewelry. This is wildly bullish, because investors are net selling more than buying, and I think the potential of investor demand is huge, and can be measured by seeing how much paper money there is in the world.
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See my article: Biblical Guidelines for Managing your Money
As the New York Times, January 11, 1859, page 2 said---
"It is well known that the most colossal fortunes the world ever saw have been based on silver mines..."
--quote found by Charles Savoie
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WHERE and HOW to BUY SILVER BULLION
http://www.goldismoney.com/buy-gold.php
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My 2004-2009 price predictions for gold and silver:
2004: $595/oz. gold, 50:1 ratio = $12/oz. silver
2005: $1011/oz. gold, 30:1 ratio = $34/oz. silver
2006: $1719/oz. gold, 10:1 ratio = $172/oz. silver
2007: $2923/oz. gold, 5:1 ratio = $ 585/oz. silver
2008: $4,969/oz. gold, 1:1 ratio = $4969/oz. silver
2009: $8448/oz. gold, 5:1 ratio = $1698/oz. silver
2010+: infinity dollars/oz. gold, infinity dollars/oz. silver.
I calculate the gold price rise by guessing that by 2009, M3 will have a "gold-value" like it did in 1980, which is to say, M3 was worth 2 Billion oz. of gold or less. It also assumes M3 will about triple in that time. These figures are conservative, because I see no reason that M3 should be valued more than the gold the U.S. actually holds, which is a mere 261 million oz., not billion. Today, the M3 value is $8870 billion / $425/oz. = 19 billion oz. of gold M3 could buy in theory. The silver:gold ratio is also a very, very vague guess, reflective of monetary demand chasing silver, which is more scarce than gold in above ground, refined form. I have no idea when the ratio of 15:1 will be exceeded, I'm just totally guessing. I suppose it could happen this year or next month for all I know. Of course my real price targets are infinity dollars per oz. for both gold and silver when all is said and done, I just don't know how long that will take, nor what year it will be. But my point in producing the price predictions is to show my bullishness for silver and gold.
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I wrote an article predicting that Silver Companies will buy silver, and urging Silver Companies to buy silver with their cash, to use silver as money, and sell silver as needed for expenses. See http://news.goldseek.com/GoldIsMoney/1069879327.php
That article is now having an effect! It is being discussed by several large "cash rich" silver companies, who are seriously considering the idea of holding their cash in the form of silver.
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A great overview on silver: Douglas Kanarowski's 78 Approaching Forces For Higher Silver Prices
See also Douglas Kanarowski's article: What Impact Will Digital Photography Have on Silver?
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See the 600 year silver chart to see how undervalued silver really is:
http://goldinfo.net/silver600.html
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Look at the summary of the world silver survey by GFMS Limited on behalf of The Silver Institute :
http://www.gfms.co.uk/Publications%20Samples/WSS03-summary.pdf
Note, there is virtually no monetary nor investment demand. Note, the 2002 mine production (585 mil oz.) is greatly exceeded by industrial, photo, and jewelry demand. (838 mil oz.). Note the chart on page five, "Supply from above-ground stocks".
The difference between mine supply and industrial demand was met by a combination of three factors: 1. Government selling, 2. Private selling, 3. Recycling
U.S. government selling is ending, as their stocks have run out, or will run out. This factor will reverse, because the U.S. government will need silver to continue their coin program, and/or need silver when they wake up and decide they need to replenish their strategic stockpile for domestic security. Silver is a war material. China's selling of silver will also likely turn into buying, as China will need silver for continued industrial development, or when they also lose faith in the U.S. dollar.
Private selling has been rapidly shrinking and is now almost ended, and should turn into buying, and become monetary demand. Monetary demand is everything in the silver supply / demand situation. It's not now. Now, it's nothing. But it will become something incredible, because the dollar is dying.
----------------------------
The following is a "must read": Ted Butler's best ever explanation of how silver is manipulated lower than it should be.
http://www.investmentrarities.com/11-04-03.html
Over 3400 people have signed the silver petition to stop the manipulation at the COMEX:
http://www.PetitionOnline.com/comex/
Ted correctly points out that a lower price creates excessive demand from consumers. However, Ted Butler does not point out, and neglects to mention, that a perpetually low price also creates lack of demand from investors who are "trend investors".
I think most silver experts over-analyze all the supply and demand factors of the silver market. No factor is more important than monetary demand. The force of photographic demand is like a light breeze compared to the hurricane or tornado of monetary demand. Monetary demand is everything.
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Consider the gold market for a moment: Even short selling at the COMEX is nothing compared to monetary demand. The short position most certainly helps to depress the price of gold as the short position is growing larger. However, it adds fuel to the fire if there is short covering, and thus, it can boost the gold price later. But the commercial short position on the COMEX is next to nothing compared to the non-reported "over the counter" trading that is done that does not appear on the COMEX.
(Numbers in metric tonnes, 32,152 oz. per tonne.)
870 tonnes -- the paper position at the COMEX, 280,000 contracts for 100 oz. each.
5,000 tonnes -- the official number admitted that the central banks have sold.
15,000 tonnes -- the number GATA research shows that central banks have sold / or leased.
30,000 tonnes -- the number of official central bank gold, minus either the 5000 or 15,000 tonnes.
145,000 tonnes -- all the gold mined in the history of the world.
2,600 tonnes -- annual mine supply
4,000 tonnes -- annual demand
And all of that is nothing compared to the amount of dollars out there that exist that could buy gold. $20 trillion bonds, $9 trillion M3 = $29 Trillion. A mere 1% is $290 Billion, which, at $500 /oz. is a massive demand of 18,039 tonnes. Do you understand what that means? That means that far, far less than 1% of dollars, in either bonds or M3 can buy gold, because there simply is not that much gold available.
Long before 1% of U.S. paper dollars tries to buy gold, gold will be going up well over $1000/oz., and silver will be headed up over $50/oz.
----------------------------
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, check the numbers and follow the links:
1,000,000,000,000: 1 Trillion dollars
1,000,000,000: 1 Billion dollars
1,000,000: 1 Million dollars
$33,000,000,000,000: World bond market, yr end, '01: http://tinyurl.com/vr7u
$26,400,000,000,000: World stock market, June 2002: http://www.nyse.com/press/1044027443845.html$20,200,000,000,000: U.S. bond market, yr end, '02: http://tinyurl.com/vr7g $11,447,800,000,000: U.S. GDP, 2004 q1 http://www.bea.doc.gov/bea/dn/home/gdp.htm$11,300,000,000,000: NYSE U.S. stock market, April, '04 (363 bill/s x $31.14/s ave.) http://nyse.com (See: Market info: quick facts) $9,101,000,000,000: M3 (money in U.S. banks) April, '04 http://tinyurl.com/vra0 $7,183,392,668,476: US debt, 5-18-04 http://www.publicdebt.treas.gov/opd/opdpenny.htm $2,360,000,000,000: U.S. annual budget 2005 http://tinyurl.com/3xbd2 $2,572,160,000,000: Marcos/Phillipine "black/unofficial" gold: 200,000 (to 500,000) Tonnes @ $400/oz. (Book: "Gold Warriors") $1,860,000,000,000: World "official" gold, 145,000 T @ $400/oz. http://tinyurl.com/vrcc $724,174,342,365: Total U.S. paper currency & coin in circulation, Dec. 31, '03 http://www.fms.treas.gov/bulletin/index.html $700,000,000,000: U.S. budget deficit (current). $272,000,000,000: Market Cap of Microsoft (03-2004) http://tinyurl.com/vrcn $222,000,000,000: M3 increase (money in U.S. banks) from Jan 2004 to April 2004 (in three months). $180,000,000,000: Debt of Ford Motor Co. (03-2004) http://tinyurl.com/vrd1 $104,400,000,000: US gold, 261 mil oz., @ $400/oz. http://tinyurl.com/vsr9 $100,000,000,000: all the world's gold stocks (estimated?) $75,000,000,000: Money flowed into Equity funds in the first quarter, 2004 $7,090,000,000: all the world's silver stocks (59 of them on this list, as of Dec. 5th, 2003) (Perhaps $10 billion by April?) $6,710,000,000: 671 mil oz. of "identifiable" silver bullion in the entire world, according to GFMS @ $10/oz. $480,000,000: 48 mil oz. of "registered" COMEX silver bullion @ $10/oz. http://tinyurl.com/vrcw
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.
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The sheer stupidity of big money not recognizing the value of the world's remaining silver is utterly shocking to the rational mind. Clearly, bond holders are utterly deceived, and totally unaware of the situation. All my readers should understand and know that bonds were originally invented to suck the capital and money (gold and silver) away from the people. Bonds today are a paper promise to repay paper. What a con game! Are bond holders conservative and safe? No, they are fools! There is nothing safe about holding a paper promise to receive more paper when we have been experiencing hyperinflation for the past two and a half years!
See my prior essay, " Inflation & Deflation During Hyperinflation "
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And the fund investors who buy paper silver futures contracts instead of real silver are a very odd bunch of fools, for they should realize that nobody can deliver 800+ million ounces of silver promised in the paper contracts and options that does not exist. It's like the paper longs are betting on the bank run happening, but they all are making sure they get at the end of the long line. Instead, they could go front and center, where there is an open window available where you can go and get physical silver, and nobody is there. Idiots! If you know a bank run is going to happen, and you are actually willing to bet on it, then go and withdraw your money before it is too late! Don't bet on it happening, which, if it does happen, your contracts will be defaulted on! Amazingly blind idiots. Wake up!
See also my prior essay, "The Moral Failures of the Paper Longs"
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How bullish am I on silver? Here's an interesting way to put it: "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.
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For a list of bullion dealers:
http://www.goldismoney.com/buy-gold.php
For a list of Brokers that handle Canadian issues and/or pink sheets:
http://www.bibleprophesy.org/SilverStockExtra.html
To track the 163 ticker symbols of the 100+ stocks on this list at yahoo: (Updated on April 2)
http://www.bibleprophesy.org/SilverStockExtra.html
To learn All about Canadian law, 43-101, about reserves and resources:
http://www.bcsc.bc.ca/Publications/mineral_projects_sept03.pdf
A good website that hosts posting boards for many of the smaller canadian stocks (that Yahoo! finance does not have boards for) is stockhouse.com
Click on "Bullboards".
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This is a list of primary silver stocks.
I count a company's ounces of gold as 10 oz of silver. Why? Because I have a very strong positive bias in favor of silver over gold.
Given my bias in favor of much, much higher silver prices, then, to me, the grades of silver are far less important than buying more oz. in the ground. More oz. in the ground at a lower cost is the most important consideration for me.
My method is simple. Cost per ounce in the ground. How much do you get (silver reserve totals), and how much does it cost (market cap)? The cost is the market cap divided by the silver reserve totals. Cheaper is better. Buy low, sell high.
Disclaimers, Warnings, and Advice: I have gathered the information below over the course of several months. I believe it is accurate to the best of my ability. I have made mistakes in the data from time to time. I'm human. I have collected the information from public sources such as company web sites and public information found at yahoo.com to get the stock prices. This report in no way guarantees the accuracy of the information below, since the information may change at any time. The number of outstanding shares can change as a company engages in new share issues to raise more capital through private placements, or if outstanding warrants (and options) are exercised and converted into shares, or if shares are bought back. Shares can be consolidated, or split. The number of ounces of silver in the ground can also change, as these are often only estimates. The number can also change up or down, depending on drilling results.
This report is not investment advice. This report contains information that may or may not be up to date, and may be inaccurate. I urge you to contact the company and do your own research to verify the information contained in this report.
This report is not an offer to buy or sell any securities. I am not a broker. Only your broker can buy or sell securities for you.
I urge you to consult with your investment advisor to determine whether these kinds of investments are right for you.
I also caution you to be aware of your investment advisor's advice, they are sometimes paid to push things like mutual funds, bonds and other securities that may not be in your best interest to buy. Some investment houses are short physical metal, and thus, they may attempt to strongly discourage you from buying precious metal or precious metals investments. I believe that the propaganda machine in support of frauds such as bonds and the dollar is so strong, that they may even believe what they say when they give bad advice to avoid the safety and protection of precious metals. It is most likely that they simply do not understand the precious metals market as well as you do.
All total estimates of "ounces in the ground" can vary widely. There are "proven and probable reserves" which are the highest category of certainty which is obtained through many drill holes, and then at the least accurate, there are "inferred resources" which are hardest to estimate. Additionally, every miner always has "more silver properties that need to be explored, which probably contain more silver". For the purposes of this report, I have added all those numbers together. It is believed that all these "ounce in the ground" estimates can be profitably mined at $5-6 per ounce silver, or lower. Thus, I believe that when silver trades for $15/oz. or above, that all of these ounces can be mined at a substantial profit.
I may be wrong. (I probably make mistakes in every article, and there have been updates and corrections made each week, especially as prices change.)
Mining is a risky business. You need to be willing to sustain a total loss of your investment for various unforeseen accidents. Silver stock companies can do stupid things to shareholders such as take on debt, or issue more stock at too low prices which reduces the percentage of the company you may own (dilution). Yet, they need to issue shares to raise capital for drilling, and then an even bigger dilution to build a working mine. They may sell YOUR silver too cheaply, or worse, hedge the price of YOUR silver just as it begins to go up if they lock in a price which then proves to be too low if the dollar is destroyed. Mining is a risky business as estimates of assets in the ground can change. There is political risk and environmental risk. They can't franchise the business, are stuck in one location, are subject to government confiscation, or taxes, or union wage negotiations, and corporate looting.
Do your own research. Be responsible for your own investment decisions. Again, please, before investing in a mining company, call up the company, and speak either with the CEO or the Investor Relations contact person.
So, at the very least, check the company web site, read the annual reports, check my numbers, check my math, and email the company. That's what they are there for, to answer your questions, and to speak about the opportunity of the company. Don't trust everything you read over the internet. I am a biased source. I own silver mining stocks. And I'm not a broker, nor an investment advisor. I'm just a private investor trying to make sense of this crazy world, and sharing my information and thoughts on silver companies.
Surely, there are scammers in the mining industry in the past, and there will be scammers in the future. Remember the fraud of Bre-X. The new 43-101 compliance laws put in place after Bre-X will not prevent a "certified" geologist from lying if he feels lying will create a better payoff. The Bible warns, "trust no man", yet at the same time advises us to "cast our bread upon the waters", and to not issue "false allegations" against others. Physical gold and silver provide the "payment in full" as long as the coins or bars themselves are genuine and not fake.
This report may be copied, and transmitted by other people, and may become outdated by the time it reaches you.
I can't tell you how you should invest your money, of course. The reason is that I don't know how convinced you are of the silver bull market, nor do I know how soon you will be needing the money back, so I don't know how long you can wait to see results, nor do I know how much liquidity you need. Nor do I know the size of the money you have to invest. It is very hard to invest large quantities of money in a small market cap stock.
That being said, my investment strategy seems to be working for me, so far. And so, here is how I have valued the following silver companies to make my own investment decisions.
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(Market cap is always converted to US dollars and denominated in US dollars because I divide by ounces of silver, which are also denominated in dollars)
The Market Cap is the usual tool to value a company. It is what the company "costs to buy" if you could buy the entire company, all the shares, at the latest share price. It is calculated by multiplying the share price, by the total number of shares that the company has issued. In reality, you could almost never buy an entire company at the price of the Market Cap, but only a small portion. Usually, even small buying pressure, such as trying to buy 1% of a company, can push up the price of a stock by up to 10-50% higher. In my reports, I list Market Cap in terms of millions of dollars as "$75 mil MC".
To calculate the Market Cap, I try to get and use the number of "fully diluted shares". A company creates shares when they sell them to investors in what are called "private placements", or "initial public offerings" (IPO). These usually consist of shares and warrants, sold for cash that the company will need to grow and expand.
The "outstanding shares" is the number of shares that exist out there if you count them all, and it does not count the warrants, which are like options. The investor can "exercise the warrants" which is a right, but not an obligation, to buy more shares from the company at the set price of the warrant.
If the company does well, and the stock price moves up, all the warrants will be, or should be, exercised and converted into shares, especially if they become "in the money", and the warrants are significantly cheaper than the stock price.
Now, "fully diluted shares" is the total number of shares, plus the warrants, counting warrants as if they were all exercised and became fully trading shares. I think "fully diluted shares" is a better number to use to calculate market cap than by using "outstanding shares" as most do.
Finally, I go beyond valuing a company based on Market Cap alone; instead, I value a company by dividing the Market Cap by the assets of the company, which are usually the silver reserves in the ground. Thus, I can get a sense of what you are getting for what you are paying. And then, I denominate the whole thing in terms of silver, and not dollars, to get a more constant measure.
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(These first three companies, BHP, GMBXF.PK, and BVN produce a lot of silver, but are way to expensive to buy for the silver exposure for your portfolio.)
BHP Billiton Ltd (BHP)
http://www.bhpbilliton.com/
--'produces 40 mil oz. silver annually from one mine'
Additional comments: unfortunately, BHP has a 53 Billion market cap, so we can't buy BHP for the silver exposure. IE, $53 Billion / oh, say, 1000 million?????= $53/oz.
Dear BHP: By all means, keep mining the silver if you want the silver exposure, and want to be in the silver business. But don't sell the silver. Keep it. Let the profits of your entire company accrue as an increasing physical supply of physical silver. In fact, do as Buffett did, and buy more silver if you can. It would be infinitely easier for you to buy silver from yourself than it would be to buy 40 million ounces of silver from the COMEX, which, today, might be impossible.
Grupo Mexico SA de CV (GMBXF.PK)
http://www.gmexico.com/indexi.html
651,646,640 shares (2002 annual report)
@ $4.00/share
$2606 mil MC
"Grupo Mexico ranks as the world's third largest copper producer (copper at $1.24), fourth largest producer of silver and fifth largest producer of zinc."
They produced 28.2 million oz. of silver, worth $129 million, in 2002. (P. 5, annual report.)
Total value of produced metals: $2527 milllion. (but the company lost money in 2002). They mainly produce copper, 900,000 tons worth $1.5 billion in 2002. Thus, silver, at 2002 prices, is only 5% of their production value. Silver is a by-product for them, not a main product.
I don't have silver reserve figures, nor do I see any need to find them or add them, since they are not a primary silver producer, and I don't think anybody would be buying them for the "silver exposure".
If we assume 280 mil oz. of silver (ten years reserve for production), then we still don't have anything exciting for the silver alone.
$2085 mil MC / 280 = $7.45/oz. cost.
KGHM Polska Miedz
http://www.kghm.pl/en/index.php
--KGHM is the world`s sixth-largest copper producer and second or third in silver.
1163 tonnes of silver produced in 2001.
1163 x 32152oz.tonne = 37.4 million ounces of silver produced in 2001
--Copper/Silver mine in Poland.
--Market capitalisation is about $1.52 billion.
Compania de Minas Buenaventura SA (BVN)
http://www.buenaventura.com/
NYSE:BVN
- Peru´s largest publicly traded precious metals company
--produces over 10 mil oz of silver per year
--looks way too expensive for the silver alone: 3.6 Billion market cap.
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ABX (Barrick)
http://www.barrick.com/
535 million shares
@ $20.67/share
$11,058 million Market Cap
5.5 million oz. / year gold production.
--production hedged out for 3 years, or about 18 million oz. (most notorious hedger of the industry, the "leader")
--price of hedges locked in near the market lows, perhaps $340/oz. on average, nobody knows for sure, because Barrick will not say
--reportedly, Barrick is trying to "unhedge".
--reportedly, they plan to deliver 1/3 of production to hedges, which means they will be hedge free in about 10 years.
--the size of the hedge, 18 mil oz. gold, at $400/oz., would be valued at $7.2 billion dollars. At $500/oz, it's $9 billion.
--but they claim to be "debt free", if you ignore the gold they owe for delivery, at locked in, low prices. (only true if gold is not money)
--cash "rich" of about $1 billion dollars.
Silver Reserves reported to be 850 million ounces!
Gold Reserves reported to be 86 million oz. (x 10 = 860 mil oz. + 850 silver = 1710 mil oz. "silver equiv."
$11,058 million Market Cap / 1710 mil oz. = $6.47/oz. silver
You get "approx" .94 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: Over the years, Barrick has hedged their production, which many claim has helped to depress the price of gold and silver, by artificially adding to supply. (Barrick's promises becoming the extra supply.) The declining price of the precious metals has put other miners out of business, which Barrick has acquired at low prices. If Barrick goes bankrupt due to their hedges, and rising gold and silver prices, then perhaps Barrick's many properties will, once again, be sold at distressed prices.
Barrick boasts a "cash cost" of $189/oz., for gold for 2003, yet their cash has dropped from $2 billion down to $1 billion. It could be due to the hedging, locking in precious metals prices at low prices, and/or hedge covering that explains the monetary loss in the light of their low cash costs.
About a year ago, perhaps spring 2003, ABX made an announcement about covering 30 million ounces of silver they sold short. Then, a large buyer showed up in the futures contracts for about that amount. I do not know whether, or how, that has yet been resolved.
I expect silver bullion to continue to outperform ABX stock at these prices.
CDE (COEUR D'ALENE)
http://www.coeur.com
coeurir@coeur.com (208) 769-8155 or (800) 624-2824
214 mil shares (Issued 32 mil new shares late Oct. 2003)
@ $4.69/share
$1005 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)
$1005 mil MC / 225 mil oz = $4.47/oz.
You get "approx" 1.36 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: A few months ago, CDE announded their intention to try and raise $150 million in the capital markets by issuing shares. I do not believe they were successful in raising any such funds, even in the exceptionally hot silver market for private placements of shares. Therefore, CDE may have realized their shares were overvalued. Interestingly, this week, CDE made a cash and share offer worth $1.7 billion for Wheaton River.
I don't know exactly how CDE could offer $1.7 billion to Wheaton River, given that CDE's market cap is significantly less than that. But I'm also not privy to the details of the deal. Perhaps CDE shareholders have authorized the issuance of a lot more stock? I heard a few weeks ago that CDE shareholders were being asked to approve such a massive increase of issuing new shares.
If you can't sell your overvalued shares to the market for cash, then offer them up in exchange for an acquisition! Smart move for CDE!
Wheaton River says receives Coeur d'Alene offer
http://biz.yahoo.com/rc/040528/minerals_wheaton_offer_1.html
Even more interesting, Wheaton River was once advertised as a "silver stock". However, after my own very limited and quick analysis, I determined that the silver exposure in Wheaton River was too small to be significant, perhaps only around 10% of the value of the company's metals production, and so, I removed the listing of Wheaton River from my silver reports. After all, this is a silver stock report, not a gold stock report.
My own feelings are that I'd rather own Wheaton than CDE, but I don't own either. I think they are both overvalued. But if I was a large Wheaton River shareholder, thinking to own Wheaton for the silver, I might be happy with the CDE offer. After all, a larger company should offer more liquidity, and make it easier to sell the shares, and get into a better silver stock. And if I was a very large CDE shareholder, I would be happy with the acquisition, since I'd at least get something for my overvalued shares, in addition to the increased liquidity, which, again would make it easier to sell.
A final thought is that CDE may have hedged gold production. They may have hedged more than they would like. Thus, acquiring a producer, like Wheaton River, may be able to help them to eliminate their hedges.
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.
CDE looks like they owe both gold and dollars. A double debt warning for CDE investors!
Again, their listing of ounces is in the "reserves" category (more certain) not the "resources" category, which is less certain. They may have "resources" but like HL and Industrias Penoles, they give no estimates.
I expect silver bullion to continue to outperform CDE stock at these prices.
IPOAF.PK (INDUSTL PENOLES)
http://www.penoles.com.mx
397.5 mil shares outstanding (2002 annual, unchanged since 2001)
@ $4.00/share
$1590 mil MC
419 proven and probable reserves of silver (from 2002 annual report on website)
$1590 mil MC / 419 oz. silver = $3.79/oz.
You get "approx" 1.61 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: Industrias Penoles is the world's top producer of refined silver. They actually derrive more revenue from silver than any other source. But they lost money in 2002.
The word late Feb. 2004 from ECU Mini, who reported to lemetropolecafe.com, is that Penoles has hedged several year's worth of silver, that is, they have locked in to sell mostly all their silver at low prices. Set when prices were lower. How much lower, and at what price, is anyone's guess. As reported at lemetropolecafe.com, "We know the market is so tight even the world’s largest silver producer, Mexico’s Penolas, wasn’t thrilled about supplying 1 million ounces for a special project with ECU Silver, led by their extremely able CEO Michel Roy."
78.5 million oz. silver refined by the metals division in 2002, and 1 mil oz. gold.
They probably refine almost all the silver that comes out of Mexico.
They probably produce about 34 mil oz. of silver from their mines annually, and they have expansion plans.
I've heard this stock is tightly held, most is family owned.
Their oz. numbers are "proven & probable reserves", which is much more certain than most of the others which are mostly "inferred and indicated resources." They undoubtedly have "inferred and indicated resources" in addition to the "proven & probable reserves," I just could not find any info on that at the website or in the annual report.
Given the report in March, 2004, that Penoles has hedged silver for two years, I expect silver bullion to continue to outperform IPOAF.PK stock at these prices.
SIL (APEX SILVER)
http://www.apexsilver.com/
information@apexsilver.com (303) 839-5060
47.4 million shares outstanding (late May, 2004) (not fully diluted)
(derrived from share price & market cap, late May, 2004)
@ $18.45/share
$874.6 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
$874.6 mil MC / 454 mil oz = $1.93/oz.
You get "approx" 3.16 ounces in the ground for 1 oz. silver's worth of stock.
Additional comments: Apex may also have up to 35-50 exploration properties.
March 16th, Apex raises $144 million in a convertable debenture deal to help finance the development of San Cristobal. They now have 350/435, or 80.4% of the capital costs needed for construction. Raising the last bit should now be very easy to do. If, while raising money, they held their cash in the form of silver bullion, they would probably not need to raise any more cash at this point, since silver has moved up over 50%.
Apex is now the most cash rich silver stock on the list. About $350 million! Amazing. Their plan, as they have stated all along, is to wait until higher silver and zinc prices to develop their deposit. I wonder if they will be smart, and hold their "cash" in the form of silver bullion while they wait for silver bullion to go up in price? Seems so basic even a child could understand it. One key problem standing in the way is that there are position limits on paper longs, and thus, APEX could not probably not buy that much silver bullion even if they wanted to. Ironic, isn't it? It is the most natural and sensical thing for Apex to buy silver while they wait for higher silver prices, and doing so would push up the price, but they likely will not act, and almost cannot act due to the problem of scales of size. This, to me, is so bizzare, I cannnot fathom it. I think I understand a lot, but this.... it is simply mind boggling. It's the result of a system so out of balance, it's insane, and the rational mind has no answer for the bizzare things we see today.
Look, COMEX is the last place on earth to buy silver now, in any really big size. Reports are coming in from all over that there is no bullion in significant size for sale available anywhere.
My advice to Apex would be to buy every bit of silver they can get. Even hold out a sign, put up a website, hire people to take the orders, and start buying silver, in all forms, at 10% and even 15% above the spot price. Just make yourself become the "market maker" and start buying silver from all over like a sponge soaking up water. Let the silver find you! In the long run, a 10-15% commission is nothing when the trade is this good. There may be position limits at the COMEX, but it's not illegal to offer to pay what you are willing to pay to the free market. Forget the COMEX, and make your own market!
Apex silver primarily has institutional investors.
Apex has a lot of zinc. That's an added bonus that is not factored in to my method of valuation. Zinc prices have been heading up soon, so that's another bonus. Plenty of zinc is especially good if zinc is moving up in price. Zinc hit a recent high of $.51/lb., from a low of about $.35/lb., currently at $.47. For zinc prices, see http://www.metalprices.com
And, they are not mining now, but are waiting for higher silver prices. That's also a plus. The management also seems to understand that silver will move upwards a lot. Another plus. Finally, George Soros, Billionaire, owns a bit of this one, just under 10% I read recently. That's another plus, in general, for the silver market if Billionaires are paying attention to it. There are several other zinc / silver plays on this list that investors might also consider: Canadian Zinc, Expatriate, or Metalline (I own Metalline, but not SIL.)
I do not have an idea on whether or not SIL will out perform silver bullion or not. It's hard to say, because of that huge zinc bonus. I expect most of the other stocks on this list to outperform or significantly outperform silver bullion in the long run from today's prices.
GRS GAM.TO (GAMMON LAKE)
http://www.gammonlake.com/
gammonl@sprint.ca (902) 468-0614
62 mil shares Fully Diluted: (Feb 27th, 2004)
@ $6.73/share
$417 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.
$417 mil MC / 231 mil oz.= $1.81/oz.
You get "approx" 3.37 ounces in the ground for 1 oz. silver's worth of stock.
**Note** most of Mexgold's oz. that are added in are an "exploration target" not yet "inferred resources".
Additional comments: Drill results released Jan 7th: http://biz.yahoo.com/cnw/040107/gammon_lk_drill_rslts_1.html
At current prices of a 64:1 silver:gold ratio at $425/oz gold and $6.60/oz silver, the resources are worth $1048 million of silver, and $1411 million worth of gold. Cash cost is $85/oz. Life of mine is 7 years.
FSR.TO FSLVF.PK (FIRST SILVER)
http://www.firstsilver.com/
info@firstsilver.com (604) 602-9973 or (888) 377-6676
38.6 mil shares fully diluted (Jan 2004)
@ $2.15/share Cdn x .73 US/Cdn = $1.57 US
$61 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.
$61 mil MC / 42 mil oz. = $1.44/oz.
You get "approx" 4.23 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.
CFTN.PK (CLIFTON MINING)
http://www.cliftonmining.com/
clifton@cliftonmining.com 801-756-1414 (303) 642-0659 Ken Friedman
47 mil shares fully diluted (May 2004)
@ $1.18/share US
$55 mil MC
http://www.cliftonmining.com/wsreview.htm --source of 100 mil oz. resources est.
http://www.cliftonmining.com/resource.htm
From: http://www.siliconinvestor.com/stocktalk/subject.gsp?subjectid=13531
"A previous geologist has talked about a possible resource of 1 billion oz. of silver, and 5 million oz. of gold."
100 mil oz. silver
+500,000 oz. gold x 10 = 5 mil oz. silver equiv.
= 105 mil oz. silver.
up to 1000 mil oz. silver "exploration potential".
Clifton has a complex JV agreement with Dumont Nickel. In sum, here is what Keith Moeller VP, Clifton Mining Company wrote to me: "If Dumont produces a positive feasibility study on an individual property piece, then they gain a 50% interest in that piece alone, not in the rest of the property. If they spend more than 5 million dollars (US) on any one piece and they produce a positive feasibility study on that piece, then they will gain a 60% interest in that one piece of property, not in the rest. If they stop at any time or fail to produce a positive feasibility, then they will gain no interest in any of our property. Right now we have around 7 different pieces of the property that have "Stand Alone" mine potential. If Dumont stakes or purchases any property within five miles of the joint venture property, then we automatically receive a 50% interest in that property."
My problem is how to quantify that. First, there is the range of potential silver resources. Second, there is the range of potential ownership, which is highly variable, and not subject to the entire property, nor necessarily subject to spending by Dumont, but subject mostly to Dumont doing a positive feasibility study on each of many properties . At the extreme ranges, the values are:
40% to 100% of 105 = 42 - 105 million oz.
40% to 100% of 1000 = 400 - 1000 mil oz. "exploration potential"
$55 mil MC / 42 mil oz. = $1.32/oz.
$55 mil MC / 1000 mil oz. = $.055/oz.
You get "approx" 4.61 ounces in the ground for 1 oz. silver.
Exploration Potential: 111
Additional comments: Note the "exploration potential" is very large.
For more info on what's going on with Clifton, see http://www.dumontnickel.com , JV partner. One man suggested buying both Clifton and Dumont to ease the difficulty in trying to figure out their JV agreement.
Clifton has 25% ownership of a biotech firm that makes a colloidal silver. The biotech firm has a patent on a "super" colloidal silver solution made with 10,000 volts that adds oxygen that gives it more powerful antibacterial properties, and is safer since it uses less silver, which would prevent "blue skin" argyria. Normal colloidal silver that you can make at home with 30 volts works to kill bacteria by disrupting the oxygen metabolism of the cell wall, killing bacteria with oxygen. The market for safe antibiotics is in the multi Billions of dollars.
See the human study data released on their colloidal silver product:
Clifton Mining Company - New Human Study Data Released
ABL signs a contract with GNC. (April) Clifton's biofirm's colloidal silver product will be on the shelves of this mass market health food and fitness stores, GNC. Congradulations to Clifton!
MFN MFL.TO (MINEFINDERS)
http://www.minefinders.com/
34.1 mil Shares Fully Diluted (Late 2003?)
@ $7.40/share
$252 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."
$252 mil MC / 195 mil oz. = $1.29/oz.
You get "approx" 4.71 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.
PAAS (PAN AMERICAN SILVER)
http://panamericansilver.com/
info@panamericansilver.com (604) 684 -1175
70 mil shares fully diluted (April, 2004)
http://panamericansilver.com/s/CorporateInformation.asp?ReportID=26039
@ $13.49/share
$944 mil MC
10 silver properties (3 in production)
produced 7 mil oz. silver in 2001:
Reserves & Resources through Dec. 11th, 2003 from
http://panamericansilver.com/s/ReservesAndResources.asp?ReportID=25303
743.2 million total
$944 mil MC / 743 mil oz. = $1.27/oz.
You get "approx" 4.79 ounces in the ground for 1 oz. silver's worth of stock.
Additional Comments: Pan American of Canada buys Morococha silver mine in Peru for US$35 million This $35 million acquisition is a great deal for PAAS, and a minor help for PAAS shareholders. According to the press release above, the silver mine produced 3.5 million ounces of silver a year, at a cash cost of $3/oz., which is great! At $6.50/oz, that's $3.5 x 3.5 mil oz. = $12.25 million per year profit after cash costs! That gives the acquisition a P/E ratio for the mine's acquisiton cost of under 3! What a deal!
Unfortunately, PAAS shareholders are paying way above that when they buy the stock today. After this acquisition, PAAS should have a "2004 silver production forecast to 13 million ounces from 10.1 million ounces and will reduce forecast cash costs to below $ 3.50/oz, bringing anticipated total costs to less than $4/oz for the year." Now, at $6.50/oz, that's $2.5 x 13 mil oz. = $32.5 million per year profit, after cash costs. That gives a P/E ratio for PAAS of about $1000 / $32 = 31. Therefore, considering the two P/E ratios, 31 compared to under 3, PAAS stock is over ten times overvalued compared to other silver mining opportunities that exist in the market, such as the property they just purchased.
After I have been harranging PAAS in these reports for being in debt for months, they finally rid themselves of their debt by converting their debentures.
Pan American completes successful debenture conversion and repays all its bank debt Tuesday May 25
PAAS "proudly" reports having $120 million in paper cash, most of which it has had now for over 6 months--ever since they went into debt by $90 million. They still refuse to recognize that silver is money, and they refuse to hold their money in the form of silver.
What if your silver company decides to lock in silver prices at $8, and hedge years of production to "protect the shareholders and provide exposure to the high $8/oz. price," only to watch silver prices head past $25 and past $50/oz? Your stock could get wiped out in bankruptcy, and your investment could go to zero value!&nb
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