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.
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 over8900 investors each week in email.
If you are an Accredited or Sophisticated investor and want information
I may find out about private placement opportunities in some of the very
best silver stocks in my opinion, (This is not a solicitation for any stock,
and I'm not brokering any securities) email me with PP in the subject field:
jasonhommel@yahoo.com
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the bullish case for gold and especially silver. If you have studied
the silver market at all, then the time has come that you ought to be a
teacher, and you ought to explain the silver story to all who will listen.
goldismoney.com
is designed to help spread the word. I suggest you email the link to
your address book.
To read about my religious bias, see my other website,
bibleprophesy.org
There are two essays near the top of the page that explain why I
believe the entire world will return to using gold and silver as money
again before the end times. Hint, see Ezekiel 38. To read
more about my religious bias when it comes to investing, see my essay, Biblical Guidelines for Managing your Money
Kitco
reports silver at $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):
Interest rates!
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 jasonhommel@yahoo.com
------------------
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.
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.
------------------------ 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.
----------------------------
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
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 coeurir@coeur.com (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/ information@apexsilver.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/ gammonl@sprint.ca
(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/ info@firstsilver.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
2. And
while I'm asking, did you see my article at gold-eagle.com, Miners to
Use Silver as Cash - 27 November 2003
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.
Ross
Dear Ed,
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.
Ross Beaty
I replied to Ross with the following:
Ross Beaty,
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.
Sincerely,
Jason Hommel
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.
Ross
I responded once again:
Ross,
Thank you.
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.
Sincerely,
Jason
Hommel
(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 info@oremex.com 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 nicolaas@attglobal.net
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 info@westernsilvercorp.com
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/ paull@silverstandard.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/ czn@canadianzinc.com
1-866-688-2001
67.3 mil shares fully diluted as of Dec., 2003 (as stated in the proxy,
p.8)
80.2 fully diluted shares as of Feb
2, 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 info@gencoresources.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.
RDV.TO RDFVF.PK (REDCORP VENTURE) http://www.redcorp-ventures.com/ http://www.redfern.bc.ca/index.html
52.7 mil shares fully diluted (March 2004)
@ $.34/share Cdn x .72 US/Cdn = $.24
$13 mil MC
http://www.redfern.bc.ca/projects/tulsequah/exploration_resources.html#results
9 mil tonnes indicated and inferred at 107.5 g/t x .03215
= 31 mil ounces silver (3.4 oz/ton low grade silver, with other minerals)
(also have significant gold ($30/ton at $400/oz.) and zinc $60/ton at
$.46/lb.)
728,000 oz of Gold x 10 = 7.3 mil "silver equiv"
= 38.3 mil oz. silver equiv.
$13 mil MC / 38.3 mil oz = .34/oz.
You get "approx" 16.51 ounces
in the ground for 1 oz. silver's worth of stock.
Additional comments: RDV has a "gold bonus". At $409/ gold, and $6.50/oz. silver, it's
about $300 million worth of gold, and $200 million worth of silver, or
about 60% of the value is in the gold. Since my method really
undercounts the gold, this means there is a significant "gold bonus"
here.
Redcorp Ventures Ltd.: Brokered Private Placement Financing Closed ($3 million)
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/ info@admiralbay.com
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/ info@expatriateresources.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/
info@minesmanagement.com
(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/ info@silvercrestmines.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/ shares@avino.com
604 682-3701 -- David Wolfin
10.9 mil shares fully diluted, Nov. 2003 (with the 4 mil new shares
from PP)
(proposed PP in late Oct 2 mil units at $1.27 (unit = 1 share + 1
warrant at 1.58)
@ $1.12/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/ hmc-info@hecla-mining.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 inform@formcap.com
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.
I own shares of FCO.TO
* MMGG.OB (METALLINE MINE) (I own
shares) http://www.metalin.com/site_map.html metalin@attglobal.net
Merlin Bingham 208-665-2002 21.6 mil shares fully diluted (April, 2004) (only 2 mil options and warrants)
@ $2.30/share US
$50 mil MC
$8 million cash in the til.
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.
Project ownership: MMGG terminated the buy-in agreement with
Penoles, who went into default, so MMGG now owns 100% of the project!
See http://biz.yahoo.com/bw/031203/35526_1.html
I believe this is very good for MMGG, since the Penoles agreement made
it more difficult to quantify the value the company. Now, it is easier
to value the company, and the existing shareholders will own more of the
project and profits. It is important to note 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/ info@otmining.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/ dhottman@nevadapacificgold.com
(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/ scoates@intrepidminerals.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.
ECU.V ECUXF.PK (ECU SILVER MINI) http://www.ecu.qc.ca/indexen.html ecu@ecu.qc.ca
(819) 797-1210
fully diluted shares = 103.3 million (6 January 2003)
@ $.30/share Cdn x .72 US/Cdn = $.22
$22 mil MC
The shares of ECU.V recently stopped
trading recently. The exchange wanted them to update their website,
particularly their listing of resources and reserves. See ECU Silver Mining Inc. Clarifies and Retracts Previous Disclosure A new resource calculation is expected soon.
ECU.V is also exploring other gold properties.
MMM.TO MMAXF.PK (MINCO MINING) http://www.mincomining.com/ investor-info@mincomining.ca
1-888-288-8288
23 mil
Fully Diluted
@ $1.42/share x .72 US/Cdn = $1.02
$23.5 mil MC
Located in China
2 gold projects and 1 silver (42% owned). Explorer
MAI.V MNEAF.OB (MINERA ANDES) http://minandes.com/ ircanada@minandes.com
(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 info@dumontnickel.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
minesystems@usamedia.tv 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/ jav@cabo.ca
(604) 681-8899 John Versfelt, President
Fully diluted subtotal, including shares needed to acquire two drilling
companies, which is contingent upon a financing.
= 18,880,436 as of February 9th, 2004 (Post-Consolidated)
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!
To learn more about the mining
camp town of Cobalt, there is a fascinating article detailing the
history of the silver camp at http://www.cobalt.ca/cobalt/history.htm
I own shares of CBE.V
SML.V SMLZF.PK (STEALTH MNRLS) http://www.stealthminerals.com
Email-Bill@McWilliam.com 604-306-0391 Bill McWilliam, Chief Executive
Officer
48 mil shares (August 31-
02)
@ $.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 gcoburn@stroudresourcesltd.com
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!
I own shares of KRE.V
EGD.V EGDMF.PK (ENERGOLD MINING) http://www.energold.com/s/Default.asp
Fred Davidson President (604) 681-9501 info@energold.com
16.8 million Fully Diluted (June 30, 2002)
@ $.55/share Cdn x .72 US/Cdn = $.40
$6.6 mil MC
PCM.V PAOCF.PK (PAC COMOX RES) http://www.pacificcomox.com/
66 mil fully diluted Jan, 2004 (From Dec 11, 2003 press release and
2002 report)
@ $.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 kbooth@aurcana.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".
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Final Category: Silver stocks FOR YOU and I TO RESEARCH further:
I strongly recommend you try to "get ahead of me," and research these
stocks to see if I left out any great values. I probably did.
I simply did not have time, or could not yet find information (without using
the telephone) on all the two key figures needed to get the "price per oz."
in the ground. You need: 1. The number of shares fully diluted
x share price to get the market cap. Then, 2., you need an estimate
of the oz. in the ground. Usually, I've been finding the oz.
in the ground resource estimates right off the company webpages, and I
get the number of shares by looking for it burried in the financial statements
like the quarterlies or annual reports, which are also usually right on
the company webpages. Have fun researching for silver
companies, and let me know if you find any good ones, and I'll add them
to this list.
TBLC.PK (TIMBERLINE RES)
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.
Several people have told me that they don't get information this good
even when they sign up for annual newsletter subscriptions from others that
cost from $100 - $300.
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.
