-- Posted 25 July, 2011 | | Discuss This Article - Comments:
Pennaluna Prospector™ -- Month-of-Sundays Update II Edition
Northwest Mining Stock News -- Coeur d’ Alene, Idaho – July 22, 2011
See Part I here.
[ Note to Readers: Well, our plan flopped. We hoped to bring you up to speed on the Silver Valley mining resurgence in just two Update issues…. with plenty of background info to give you context. But we’re short of space this issue – thanks to news of the Sunshine Silver Mines IPO, the abrupt Crescent Mine work halt and Dennis Wheeler’s resignation from Coeur d’Alene Mines. So we’ll wait until next time to talk about Hecla’s Lucky Friday Mine, the Golden Chest, the Bunker Hill and the New Jersey Mill. ]
In this issue:
1. New Sunshine Silver Mines IPO (Silver Opportunity Partners and Thomas Kaplan)
2. Galena/Coeur Mine Complex (U.S. Silver)
3. “Time Out” Called At Crescent Mine (United Silver)
4. Wheeler Leaves Coeur (Coeur d’Alene Mines)
5. The Last Full Measure of Devotion
1. Sunshine Silver Mines -- New $250 Million IPO
Last time, we gave you some history on the Sunshine Mine at Big Creek and the 360 million ounces of silver it’s yielded since the 1880’s – almost double the entire production of all the mines in the Comstock Lode.
We filled you in on the ‘Shine’s heavy hitting new owners and the $24 million they spent last year to buy the giant producer out of bankruptcy.
Now they’re making an important new move – an initial public offering.
In an S-1 filed with the SEC two weeks ago, firms related to Thomas Kaplan disclosed that they’ve merged into a new Denver-based company called Sunshine Silver Mines Corporation. (Kaplan is the Forbe’s List billionaire, Oxford grad, and mining mogul who engineered the mine purchase.)
In the S-1, the new company outlined plans to go public by selling up to $250 million of stock. Big names will underwrite the offering: UBS Investment Bank, Morgan Stanley, and RBC Capital Market.
Where will the money go? Mainly toward two projects:
1. to refurbish, explore, and complete a prefeasability study for the Sunshine; and
2. to explore and complete a prefeasability study for the Los Gatos Project in Chihuahua, Mexico, where it has two silver discoveries.
Besides the Sunshine, the company has 17 other exploration properties in the U.S. and Mexico. And it’s lined up some notable directors – including Marc Faber and Robert Quartermain, who headed Silver Standard for 25 years. Plans are to list on the Big Board with the symbol AGS.
In its filing, the firm says it believes past producton at the Sunshine cuts the risk of mining there compared to other silver development projects – a twist on the ancient mining saw that the best place to look for a new mine is next door to an old one. Maybe inside the old mine is better still.
The company also declared, “Despite being a prolific silver producing region, Sunshine Silver believes that the Coeur d’Alene Mining District is still highly underexplored.” This view echoes sentiments of a number of observers.
Sunshine says it aims to become a premier silver producer. With the money, brains and expertise it’s rounded up, nobody in our shop is betting against it.
In any event, the new firm’s activity should boost the Silver Valley’s come back from near depression… raise investor awareness of the region … and help create opportunities for other area miners.
You can see the S-1 here:
2. USA’s Galena/Coeur Mine -- number two U.S. silver producer
US Silver (TSX: USA) last month reported record revenue, profit and cash flow for the first quarter.
In 2006, the outfit bought the Galena Mine and Mill, Coeur Mine and Mill, and Caladay Project from Coeur d'Alene Mines (NYSE:CDE). It shelled out $15 million for the whole package, which lies in the mountains near Silverton.
The Galena/Coeur complex ranks number two behind the Sunshine as all-time U.S. silver producer.
USA got a lot for its money: 11,000 acres of claims; surface facilities and equipment; a $32 million exploration project with a 5,100 foot shaft; and two side-by-side mines that since the 1950’s have produced a total of about 200 million ounces of silver… 150 million pounds of copper… and 22 million pounds of lead.
The Galena dates back to 1887. It was mined sporadically until the late 1940’s, when a rich new discovery went into steady production.
So far the mine has yielded around 160 million ounces of silver, with last year’s production topping 2.2 million ounces. It’s a strong lead producer too… and at a buck twenty a pound, lead dollars add up fast these days. Over 250 people work there presently.
The nearby Coeur’s historic production totals almost 40 million ounces of silver at average ore grades of 16.6 opt. Closed in 1998 while precious metals were in the tank, the company plans to redevelop it.
US Silver continues to expand its Valley holdings. It’s added the historic Dayrock Mine and Mill and several thousand acres of unpatented claims. It now controls around 14,000 acres, including four operating shafts, two operating flotation mills and one non-operating mill – plus surface and underground mining equipment.
Shares have a 52-week high/low of .18 and .63. It trades lately around .63 (Canadian).
[ Ed. Note: Your editor and John Worrell -- heads of Pennaluna’s trading and market-making efforts -- recently spent three hours underground touring the Galena. Don Knoll showed us around. He’s worked at the mine for over three decades, knows all the ins and outs, and seems rarely at a loss for words. Don Beehner arranged our stroll through the dark and damp, and joined us for the long walk. It was fun and informative. Big tip of our hat to USA and the two Dons for a great visit. ]
3. United Silver Calls “Time Out” at the Crescent
Last issue we told you that next door to the Sunshine the Crescent Mine was being revived also.
About a year and a half ago, United Silver Corporation (TSX:USC) -- then called United Mining Group -- inked an earn-in joint venture agreement with Crescent owner Gold Finder Explorations (TSX:GFN). Recently it reported earning the entire 80% interest offered in the deal.
Although USC’s president stepped down in June, everything seemed to be going gangbusters with the Crescent redevelopment -- until the Fourth of July, when fireworks exploded.
USC announced it would temporarily halt mine operations while the Board reviewed the firm’s financial situation and potential alternatives “including bridge equity and non-equity financing options, from a select group of interested parties.”
The freeze idled about 90 miners and development crew at the Crescent.
The Vancouver-based outfit said it still believes “the fundamentals of the silver market remain supportive for near-term development opportunities such as the Crescent Silver Mine.”
At the same time, it reported a planned private placement for up to $1 million, saying management, directors and certain others would participate. The firm also declared it would give no more news about the Board review until a course of action is approved. (Later Canadian reports indicate a possible CDN$ 2 million secured term loan agreement and private placement for up to CDN$ 4 million.)
Meanwhile United Mine Services, the company’s Kellogg-based subsidiary, is operating as usual. Last year its contract mining, construction, fabrication and machine services brought in revenues topping $10 million, with gross profit above $ 1.6 million.
During the past 52 weeks, USC has bounced between .48 and .85. Presently it’s about .65 (Canadian).
4. Long-Time CEO Dennis Wheeler Leaves Coeur
Coeur d’Alene Mines Corporation (NYSE:CDE), our neighbor down 5th Street, said last week that CEO Dennis Wheeler has stepped down. A director for over 30 years, he had been CEO since 1986.
Mitchell Krebs, company CFO, was named to replace Wheeler. A graduate of Penn and Harvard, Krebs joined Coeur in 1995.
Wheeler, an Idaho native, grew up in the Valley and graduated from the University of Idaho College of Law. Besides his day job, he’s been active in the National Mining Association, World Gold Council and Silver Institute.
CDE has a 52-week low near $14 and a high above $37. It’s traded lately near $28.
5. The Last Full Measure of Devotion
Recent days have taken a particularly heavy toll on area soldiers and their families:
Specialist Nathan Byers, 24, and Specialist Nicholas Newby, 20, both of Coeur d'Alene and serving in the Idaho National Guard’s 116th Cavalry Brigade Combat Team, were killed by IED’s during an attack on their convoy in Iraq.
Staff Sgt. Jason Rzepa, also from the Coeur d'Alene area, sustained serious injuries in the action and required amputation of both his legs below the knee.
Seperately, Army Staff Sgt. Wyatt Goldsmith, 28, of Colville, Wash., a Special Forces Medic, died of wounds suffered in an attack on his unit in Helmand Province, Afganistan.
* * *
“Suppose you were an idiot. And suppose you were a member of Congress.
But I repeat myself.”
Mark Twain/Samuel Clemens (1835-1910)
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-- Posted 25 July, 2011 | | Discuss This Article - Comments: