Silver Stocks--Comparative Valuations 
Weekly Report # 43

by Jason Hommel
goldismoney.com

FRIDAY, July 23rd, 2004 (I skipped last week.)

This week's report lists 111 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 51 explorers.  There are about 30 additional "silver" stocks with incomplete information. Additions & Changes from last week are in bold. 

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To read about my religious bias, see my other website, bibleprophesy.org There are two essays near the top of the page that explain why I believe the entire world will return to using gold and silver as money again before the end times.  Hint, see Ezekiel 38.  To read more about my religious bias when it comes to investing, see my essay, Biblical Guidelines for Managing your Money

Kitco reports silver at $6.32/oz. as of Friday, 3:00 PM West Coast US, which was used to calculate the following figures. The CAN $ / US $ conversion factor is .7569.  I will use .76 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 two weeks ago relative to silver price change (and stock dilution, and resource changes, if any) /  additional comments (EXPT is "exploration potential")

Company names in bold have summaries below with updated information.  Click on the name to see the summary below.

Companies with information about reserves/resources/exploration potential.  The list is ordered based on the resource picture.  The most expensive (with the fewest silver resources given their market cap) are listed first. 
  1. ABX (BARRICK)                                   1 even  --infamous hedger (15? mil oz. gold hedged, 3 yrs production)
  2. IPOAF.PK (INDUSTL PENOLES)            1.7 even --current producer, mostly family owned, hedged?
  3. CDE (COEUR D'ALENE)                        2.5 down --(also gold) in debt, produces at a loss.
  4. SIL (APEX SILVER)                                3.4 down  --zinc bonus, low grades, cash rich--$345 million! in debt
  5. GRS GAM.TO (GAMMON LAKE)            3.8 even --current producer, owns 26% of Mexgold
  6. FSR.TO FSLVF.PK (FIRST SILVER)        4.8 down  --current producer, (not profitable '03 3rd q.) unhedged
  7. PAAS (PAN AMERICAN SILVER)             5 down  --current producer, debt free, may hedge to develop
  8. MFN MFL.TO (MINEFINDERS)               4.8 down  --significant gold bonus, $35 mil cash on hand.
  9. CFTN.PK (CLIFTON MINING)                 6.3 down -- (150 EXPT) (colloidal silver patent bonus)
  10. KBR.TO KBRRF.PK (KIMBER RSCS)        5.3 down  One property, high grades, with exploration potential.
  11. WTZ WTC.TO (WESTERN SILVER)         7 down  -- (24 EXPT) large mine development cost. copper & zinc bonus
  12. SSRI SSO.V (SILVER STD RSC)               8.2 even --large company, many properties, owns silver bullion
  13. * TM.V TUMIF.OB (TUMI RSCS)              8.6 up -- (17 EXPT) recent bonanza grade silver discovery
  14. CZN.TO CZICF.PK (CDN ZINC)                12.2 down  --large zinc bonus, high grades, low start up costs, great EXPT
  15. ORM.V OREXF.PK (OREMEX RES)            9.1 up  (38 EXPT)
  16. SHSH.PK (SHOSHONE SILVER)                  10.6 down   leased properties needing payments, near SRLM.PK, CDE, HL.
  17. SRLM.PK (STERLING MINING)                  14.8 down --(35 EXPT) acquired the Sunshine in Cour d'Alene
  18. FAN.TO FRLLF.PK (FARALLON RSCS)       13.7 up  --(23 EXPT) low grades, silver 1/3; also gold & zinc bonus.
  19. IMR.V IMXPF.OB (IMA EXPL)                    17.2 down --(69 EXPT) explorer in Argentina
  20. GRG.V (GOLDEN ARROW RESC)          (none)      IMR.V spin-off. $3.6  mil MC, 35 properties
  21. CHD.V CHDSF.PK (CHARIOT RSCS)           20.8 down   (explorer, with inferred resources)
  22. GGC.V GGCRF.PK (GENCO RECS)              21.6 down --producer in Mex.  Plans to expand and acquire
  23. RDV.TO RDFVF.PK (REDCORP VEN)         18.6 down --60% gold bonus
  24. * SVL.V STVZF.PK (SILVERCREST)          23.8 down  --(68+ EXPT) --(Silver in Honduras, Latin America)
  25. ADB.V ADBRF.PK (ADMIRAL BAY)            25.6 down --exploring a silver property in Mex. (Huge gas bonus)
  26. * PLE.V (PLEXMAR RES INC)                     28.6 down  (just acquired 2 new projects)
  27. * MGN (MINES MGMT)                              30.2 down  --60% copper bonus (low grades), start up cost ~ $250 mil
  28. EXR.V EXPTF.PK (EXPATRIATE)               32.3 down  --significant zinc bonus 60% zinc, 25% silver (got out Atna)
  29. ABI.V ABMBF.PK  (ABCOURT MINES)        26 up --large zinc & small gold bonus
  30. HDA.V (HUSIF.PK) (HULDRA SILVER)           25 up   --very tiny, zinc bonus, low start up costs.
  31. * ASM.V ASGMF.PK (AVINO SILVER)       41 up --will own 49%-100% of the Avino +4 other silver props.
  32. UNCN.OB (UNICO INC)                              62 down --lease on largest property, needs $1 mil by Sept 1 2004.
* = I own shares

Exploration companies or producers with limited information on resources.  This list is in order (roughly) by market cap, the highest market cap companies are listed first.
  1. HL (HECLA MINING CO)             --A PRODUCER (gold bonus) cash rich.
  2. MGR.V MGRSF.PK (MEXGOLD RSCS)       -- bonanza grade discovery on Jan 13th, 2004
  3. CDU.V  CUEAF.PK (CARDERO RSCS)
  4. AOT.V ASOLF.PK (ASCOT RSCS) -- owns percentage of Cardero, CDU.V
  5. SPM.V SMNPF.PK (SCORPIO MINING)
  6. * FCO.TO FCACF.PK (FORMATION CAPTL)  Cobolt (and Sunshine silver refinery)
  7. * OTMN.PK (O.T. MINING)  very large exploration potential
  8. MCAJF.PK (MACMIN LTD)
  9. TVI.TO TVIPF.PK (TVI PACIFIC) --current producer of a dore silver bar 96% silver, 4% gold
  10. * NPG.V NVPGF.PK (NEVADA PAC GOLD)   Large "exploration potential"  (owns 1 silver property, 10 gold properties)
  11. * MMGG.OB (METALLINE MINE) --zinc/silver (historic high grade silver) (low cost revolutionary oxide zinc process)
  12. * FR.V FMJRF.PK (FIRST MAJESTIC)  -- Bought a former silver producer. Acquiring silver properties.
  13. BZA.V ABZGF.PK (AMER BONANZA)
  14. ECU.V ECUXF.PK (ECU SILVER MINI)      --50% gold bonus
  15. IAU.V ITDXF.PK (INTREPID MINRLS)  "exploration potential"
  16. CAUCF.PK (CALEDON RES)
  17. MAI.V MNEAF.OB (MINERA ANDES)      (gold bonus)
  18. * EDR.V EDRGF.PK (ENDEAVOUR GOLD)  A PRODUCER (I could not yet find a listing of resources or reserves)
  19. MAG.V MSLRF.PK (MAG SILVER)
  20. * CBE.V CBEFF.PK (CABO MINING) --Historic Silver and Cobalt district
  21. QTA.V QURAF.PK (QUATERRA RES)
  22. EPZ.V ESPZF.PK (ESPERANZA SILVR)
  23. PXI.V  PNXPF.PK (Planet Exploration Inc.)
  24. SDR.V SDURF.PK (STROUD RSCS)
  25. APM.V  (Amerix Precious Metals Corp) (NEW BULLET GP)
  26. NJMC.OB (NEW JERSEY MIN)
  27. EXN.V EXLLF.PK (EXCELLON RSCS)
  28. * KG.V KDKGF.PK (KLONDIKE GOLD)
  29. SML.V SMLZF.PK (STEALTH MNRLS)
  30. SRY.V (STINGRAY RSCS)
  31. DNI.V DMNKF.PK (DUMONT NICKEL)            exploring Clifton's property
  32. * KRE.V KREKF.PK (KENRICH ESKAY)
  33. BCM.V BCEKF.PK (BEAR CRK MINING)
  34. * CMA.V CRMXF.OB (CREAM MINERALS) Low grade, large "exploration potential"
  35. MMG.V MMEEF.PK (MCMILLAN GOLD)
  36. CHMN.PK (CHESTER MINING)
  37. GPR.V GPRLF.PK (GREAT PANTHER)
  38. EGD.V EGDMF.PK (ENERGOLD MINING)
  39. GNG.V  GGTHF.PK (GOLDEN GOLIATH)  --Historic silver district in Mexico
  40. LEG.V LEGCF.PK (LATEEGRA RSCS)
  41. TBLC.PK (TIMBERLINE RES)
  42. * AUN.V AUNFF.PK (AURCANA CORP)
  43. TUO.V TEUTF.PK (TEUTON RES)
  44. PCM.V PAOCF.PK (PAC COMOX RES)
  45. BGS.V BLDGF.PK (BALLAD GLD SLVR)
  46. ASLM.PK (AMER SILVER MINI)
  47. BBR.V BBRRF.PK (BRETT RES)
  48. ROK.V ROCAF.PK (ROCA MINES INC)
  49. MTB.V (Mountain Boy Minerals Ltd)
  50. LSM.V LASCF.PK (Langis Silver & Cobalt Mining Co Ltd)
  51. CBP.V CPBMF.PK (CONS PAC BAY MIN)
* = I own shares. 
There are expanded profiles on each company, way below.  But before I get to that, let me discuss my methodology, and the problems with it.

See the one number above listed after each company in the first list?  That number represents the number of silver ounces in the ground that you get when you buy an ounce of silver's worth of stock.  The number treats all reported ounces in the ground as equal, however, they are NOT EQUAL.  Some ounces in the ground are more certain and others are more speculative.  Some are higher grades, some are lower grades.  Some have been well drilled, others have less drill results.  They range from most certain to least certain such as: "proven & probable reserves," and then, "measured, indicated, or inferred resources."   A reserve has a feasibility study produced for it.  A resource, does not.

Here's the math on how I calculate that one number.  First, I get a market cap by multiplying the fully diluted shares (which bullishly assumes all options and warrants will be exercised and converted into outstanding shares) by the share price in U.S. dollars.  Next, I divide that by the silver price, so the market cap is denominated in terms of silver ounces.  Then, I divide the ounces in the ground by the market cap as denominated in silver.  This produces the single number of how many ounces of silver in the ground you are buying when you give up one ounce of silver in your hand, for shares of stock, instead.  This way, you can not only compare silver stocks to each other, you can compare them to silver directly.  This also helps people in other nations, using other currencies, to value these companies.

This valuation 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.

Problems with my methodology:  My methodology assumes that the more ounces in the ground, is, in theory, best, given that I expect much higher silver prices.  However, unless the price of silver really moves much higher, my methodology may not be the best one.  If silver does really move up very high in value as compared to today, then I expect my methodology to be one of the best predictors of rising stock values, because more ounces in the ground mean more leverage to rising silver prices.  However, the companies with greater leverage to the upside usually also tend to have greater leverage to the downside, and thus, tend to be more volitile.  

Other factors to consider that the single number produced by my methodology does not:  A resource calculation number does not tell you the entire picture about a company.  It is only designed as a starting place for further research.  Other very important considerations are as follows:  How much existing mining infrastructure is in place?  The more the better, so think of it as a "bonus".  How much cash does the comapany have on hand, and what is their burn rate?  What is the management's attitude towards money, silver, hedging, debt, and dilution?  This is why I list "additional comments" in the company profiles, below.

I don't consider grade to be too important (although I list it when I can), because I consider the cost to mine to be the more important consideration.  The "cost to mine" is determined in a feasibility study, which is the last thing produced before trying to raise money for final construction of a mine.  And usually, they cannot even count silver as a resource unless it is at least somewhat feasable to mine at today's prices for silver.  And this is why I count all the ounces as the same.  If a low grade ore can be mined more cheaply, and if a higher grade ore costs more to extract, and if it has to be somewhat economically feasible even at these low silver prices to be counted, it balances out quite nicely.

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/

See my June 18, 2004 article:
I'm insanely bullish on silver.

WEEKLY COMMENTARY (All new in this section):  

Patents, copyrights, and trademarks are evil.
by Jason Hommel

I want to tell you a story that illustrates the nature of precious metals, and how they reflect the truth about economic laws.

The reason why I want to focus on such economic fundamentals is that many of you are in business, or one day, you may start up a business, and the better you understand the fundamentals of how things are and should be, the more successful your business can be.  Furthermore, I believe that those of us who invest in precious metals today will be in a position to re-write the laws of tomorrow.  After all, he who has the gold, makes the rules.  What rules do you plan to make?  Have you thought about it?  I have.

I'll tell you the moral of this story up front.  There is no such thing as "intellectual property."  The only real property is something tangible, or something you can protect.  (The only kind of intellectual property you can really protect is proprietary information that you can hide, such as a secret recipe or process of production.)  Therefore, the laws are wrong that try to protect "intellectual property," that create artificial monopolies.  There should be no such thing as patents, copyrights, and trademarks, and that's my well-researched opinion, as I will show.

Before I get to the story, let me digress.  The first time I really thought hard about this notion of whether there should be such a thing as copyright, was way back in about 1985 or so, when I was about 15, because of computers.  Computers make copies very easily.  Every time you download anything off the internet, you are taking a free copy for yourself. 

One man expressed it this way, "All digital information is just a string of ones and zeros.  Why can another person tell me I can't string together a certain series of ones and zeros in a certain way, and store them however I want?"  This was his justification for copying software, or documents, or pictures, for himself.  But making copies of software was "illegal," and so I wondered why doing so should be wrong, or whether it really was wrong.

Today, the topic of "copyright infringement" is heating up, and is often in the news, mostly, again, due to computers.  We have Microsoft in the courts, what with their monopoly on software...  We have seen Napster and other music sharing software being challenged by the music industry.  Now, with the ability to copy DVD's, the motion picture industry has a battle on their hands, too.  It is a battle of "image making," and who has the rights to make certain images. 

My point is that I've thought about this issue for over 19 years, and that this is a topic that the world is currently struggling with, especially with the advent of free trade.

Did you know that China typically does not respect our copyright, trademark, and patent laws?  And neither do many other nations.  After all, a legal system can only act within a nation's boarders.  This presents a problem for many in industry.  They would like to do business in China, but often, they are afraid that their ideas will be "stolen". 

They are afraid of the competition.

But did you realize that the free market is supposed to encourage competition?  That's one of the essential benefits of the free market: competition.  I know about competition, because I was a ski racer.  Competition forces you to get better, or you lose.  Competition in business is great, because those who produce the most, the cheapest, win.  And those who don't, go out of business.  Free market capitalism (an ideal that has never existed) is the most efficient and beneficial economic system known to mankind, and it's why patents, copyright, and trademarks are ultimately incompatible with capitalism.  With competition, (and free trade), customers and society wins, and inefficiency dies out.

However, existing businesses, like people, have a desire to not die out.  And thus, they pressure government into passing laws designed to protect their own interests, which has the awful outcome of preventing the destruction of less efficient businesses. 

Patent laws generally don't protect the little guy, it hurts him, and stifles innovation.  If a man has an invention, he will likely want to patent it.  But patent lawyers cost money.  So, most often, the idea is never used, because of the intimidating and costly patent process.  Big businesses have more money to spend on patent litigation, while start ups have little.  Big businesses can often easily steal a patent by making a minor change, and submitting a new patent application.  And if there is litigation, the side with the deepest pockets often wins.  So, patents really don't offer significant protection at all anyway!

It is said that patents are necessary, to foster innovation.  The idea is that by allowing the creator to have a monopoly on his idea, he will be more likely to make use of it, and be more likely to try to create new ideas--to get the monopoly.

But patents do not foster innovation, they stifle it.  Patents prevent people from building on and using previously patented work, and nearly all innovations are modifications of existing ideas!  If you can't build upon existing ideas because they are patented or copyrighted, what can you build on?

Patents and copyrights are a form of communism.  In essence, if one man gets a patent on how to build a "better mousetrap" with his wood and springs, why should he get to say that all other people with wood and springs cannot use them in a certain way?  When and how did that one man get the control and ownership over my and wood and my springs, and your wood and your springs?  Communism is when the state owns all property, and means of production.  If our government is enforcing patents and copyrights, it is literally saying they own my property and your property, and they are saying that neither I, nor you, can use our property in certain ways.  It is the exact opposite of freedom.

In fact, patents have caused untold human misery in "modern" medicine because drugs can be patented.  The pharmaceutical industry and medical complex have worked hard to restrict and prevent the use of God-given, natural herbs that can’t be patented as medicine.  Due to the Byzantine and medieval laws of today, you cannot say that any herb "cures" anything!  And you cannot use herbs to "practice" medicine!  And why are herbs so hated?  Because they cannot be patented!  How can you patent a plant, and prevent others from using it?  Impossible! 

Now I know, from personal experience, that in many cases, herbs work better than anything modern medicine has to offer.  I occasionally suffer from nose bleeds, and I have trouble with blood clotting.  But I have found an herb, and combination of foods, that stop my nose bleeds, and prevent excessive bruising.  It's cayenne pepper, green vegetables, and Vitamin C.  See one of the first web pages I ever created here for my full story on nosebleeds. 

http://www.bibleprophesy.org/nosebleed.htm

One time, I went to go and get surgery done.  Before surgery, they wanted to run a bleeding test.  I failed!  They would not operate, since my bleed time was in excess of 15 minutes!  So, I told them to let me take some cayenne pepper and some Vitamin C.  Sure enough, it reduced my bleed time to under 4 minutes.  Amazed, they decided to go ahead and operate.  Later, three hematologists, blood doctors, came by to see me and to ask about cayenne pepper.  They said they knew of no drug that could possibly reduce bleeding times so fast--and these are modern day blood doctors!  Their ignorance should horrify all readers with a conscience!  Their ignorance should be next to criminal, because think of how many people bleed to death each year through gun shot wounds or car accidents, and all because doctors cannot stop bleeding fast enough--and because these doctors have monopolized modern medicine!

My point is that patents kill people, because the rejection of herbal remedies that cannot be patented, kills people.  To prevent people from speaking the truth about what herbs can do is evil.  And why do they do this?  They do it to defend the pharmaceutical industry that requires patents, and all the extra "no herb" legislation, to survive.

I'm not fully against modern medicine.  But it should not be afraid of the competition of anything that may be better.  Many of the laws against herbs were created because of the bad idea to protect people from what they called "snake oil" or from what they assumed were useless items.  But to say that all herbs must be useless (which is what anti-herb litigation must assume, and is what many medical doctors will say) is a false allegation, which is evil.

Thankfully, people are now able to learn much more about what all herbs can do because of the internet and search engines.  Computers are changing everything, as the free access to information is revealing a lot of truth.

My father is a staunch defender of copyright.  His business was in advertising.  He copyrighted everything.  Naturally, he does not like to discuss this topic with me.  He says, "You must copyright, otherwise, people will steal your ideas".  I say, but what if I want my ideas to be stolen, used, transferred, accepted, and implemented by society?  He counters, "But if you don't copyright your stuff, others may steal them, and then copyright them in their name, and then prevent you from putting your name on it."  I laugh at the thought.  Can you imagine someone reading this article, and trying to publish it in their name, copyrighting it, and then trying to sue me to say I can't publish it?  Who would do that?  Regarding my religious writings, I feel the same way.  I just could not imagine any preacher that would ever do that!

However, my father has an important point about how things work within this corrupt system.  Companies can buy up an existing patent, and then put the idea on the shelf, and prevent the idea from ever being used by the market!  This retards societal progress, and is simply evil! 

There are stories of a "pogue carburetor".  Supposedly, it allows cars to get outstanding gas mileage, like in excess of 100 miles to the gallon!  See: http://www.fortunecity.com/greenfield/bp/16/pogue.html 

The story is that a large energy company bought the patent, and prevents its use by the car industry.  Because if the U.S. really started using significantly less oil, it would mean the oil companies have "over invested" in capacity, and it would nearly destroy the oil businesses, for demand for their product would plummet, and thus, so would prices, and so would their profits. 

When patents are put on the shelf, it does not help society, but hurts us all.  This goes to show one very important reason why such laws are evil.

One programmer expressed his disdain for copyright as follows.  If you need a program to do a certain common thing, and if the type of code is already written for that, and if that code is copyrighted, that means you cannot use that string of code to do the thing you want.  You are literally forced to re-design the wheel every time you want to get something done.  Certain kinds of software code is like a wrench, it helps you do a certain thing like turn a nut.  It's like saying you cannot use a wrench to turn a nut, instead, you have to create an entirely different tool to do the job!  This creates an enormous series of inefficiencies when trying to write software.

I firmly believe that patent and copyright restrictions are creating an "economic dark age" today, compared to what would happen if there were no such things.

Interestingly, Microsoft has increasing competition from an "open source" operating system that is not copyrighted.  You may have heard of Unix, or Linux.  Many programmers say that these other operating systems are far superior products.  They are created by programmers throughout the world, who add bits of code to the system, and they do it for free, or for the recognition.

Thus, copyright protection is not even helping to produce a better product for the computer industry!

Some people say that without copyright, the entertainment industry as we know it, and Hollywood, would cease to exist!  Given what the entertainment industry produces, perhaps this would be a good thing!  The business of Hollywood is to tell stories, mostly fiction. 

Well, now I will get to my story, a true story.  In the silver bullion business, at one time, the main producer of one-ounce silver rounds was Johnson Matthey.  They sold the rounds to coin dealers for 55 cents over the spot price of silver, to cover their production costs.  This was well under the price for U.S. Silver Eagles, and so there was a good market for the rounds by silver bullion investors who would seek to buy small quantities of .999 fine silver at the lowest possible price. 

Well, soon enough, a company started selling silver rounds for 40 cents over the spot price.  How did they do it when the price of production was 55 cents over spot?  It was certainly uneconomical.  But they did it to gain "market share," and to "build up a name for themselves," which was an attempt at branding, similar to gaining a trademark name like McDonalds, or "Johnson Matthey".  It was an attempt to corner the market, and to become the largest dealer.  It took away the customers of other businesses that had to sell the one-ounce rounds at 95 cents over the spot price in order to cover normal business expenses and shipping costs.

In the end, this company went bankrupt, and ended up defaulting on $400 million worth of customer orders and obligations.  The bankruptcy court ended up liquidating this company. 

As I see it, the bankrupt company followed the same strategy of many of the bankrupt dot com companies who had horrible business models, such as Pets.com, who would pay advertising costs of up to $10 per customer, but only make $1 per customer order.  That's simply not economical, and the difference can't be made up on volume!

Here is a lesson I see from this story.  Silver and gold strongly tend to resist branding, or copyright, or trademarks.  Bullion investors instinctively buy the lowest cost bullion.  They are generally not attracted to higher cost bullion with a "name". 

Bullion dealers have a very difficult time building up a name for themselves, and the nature of the business strongly tends to resist franchising.  Nearly all bullion shops are in one location, and are completely independent, and the owner nearly always runs the shop himself, with perhaps a little help. 

The nature of bullion dealing also resists advertising!  For if you advertise, and if you convince your customer to buy bullion, (and bullion is defined as the "lowest cost" form of physical metal), the customer will likely shop around to find that "lowest cost".  And the dealers with the "lowest cost," will, by business necessity, most likely be those who do not waste money on excessive advertising!

Thus, the nature of silver and gold bullion actually teaches the world that copyrights, trademarks, and brandings do not work!

Knowing this helps to encourage me to write to advocate buying bullion.  I know that the nature of bullion dealing tends to prevent bullion dealers from advertising well.  Fortunately, the internet is changing that.  Bullion dealers can now write all they wish (if they have time to do so) to educate their customers about the benefits of owning bullion.  And the internet gives anyone the ability to create free advertising.  Anyone can put up a web site with articles at nearly zero cost.  The difficult part is getting people to the web site.

There are a few more arguments I will present against copyright.  Preachers and those who write bible commentaries (as I have done) often stand accused of two things; some even at the same time.  First, we are accused of stealing another man's ideas regarding interpretation.  Other ways to describe this so-called "theft" is plagiarism, or sometimes it is derisively called "putting tradition above scripture".  The other false accusation is that our interpretation is "new" or "novel" or "imaginative" or "fanciful" or a "personal interpretation".  Well, I hate to break it to these fools, especially those fools who accuse both at the same time, but everything under the sun is either old, or new.  Any idiot can see that.  And neither kind of interpretation is sinful!  

The Bible cannot be copyrighted.  (Well, certain versions can, but not the old copies or translations!)  You cannot copyright truth!  And you cannot copyright true and accurate explanations of fundamental truths!  The whole point of Christianity is to spread the gospel, and to continue to re-tell those truths.  The goal of Christianity is to encourage fundamental truths to be widely known, widely taught, and widely believed.  Copyright only hinders that process.

Therefore, the ultimate expression of the greatest good, printed on paper, is the Bible, and it supports the concept that "no copyright" is best.

And what is the ultimate expression of the greatest evil, printed on paper?  I would say it would be the paper dollar.  Paper dollars are an unjust weight and measure, and are an abomination!  Dollars are not supposed to be copied, they call it "counterfeiting".  Supposedly, only one entity has the legal right to make paper dollars.  Thus, the unjust dollar system is supported by copyright laws!  Interestingly, cheap computers make counterfeiting paper money more easy than ever.

Perhaps people will begin to recognize these truths as those things that need to be supported by copyrights and patents die off, and those things that cannot be copyrighted flourish.

But in the meantime, those people who recognize these truths first, will flourish the most.  And those who reject the truths represented by precious metals, may end up having to go back to work.

-------------------------

Ecclesiastes 2:26  For God gives wisdom and knowledge and joy to a man who is good in His sight; but to the sinner He gives the work of gathering and collecting, that he may give to him who is good before God.

People who hate to hear about precious metals may hate to hear truths, and because those truths convict them of the error of their ways.

The silver of the United States became "dross" nearly 40 years ago (a generation) in 1965, the year the mint abandoned minting silver coins, and began producing the copper slugs we use today.  Our silver has become dross.  And soon, even the dross will be taken away, probably through hyperinflation.

Isaiah 1:21 How the faithful city has become a harlot! It was full of justice; Righteousness lodged in it, But now murderers.
22 Your silver has become dross, Your wine mixed with water.
23 Your princes are rebellious, And companions of thieves; Everyone loves bribes, And follows after rewards. They do not defend the fatherless, Nor does the cause of the widow come before them.
24 Therefore the Lord says, The LORD of hosts, the Mighty One of Israel, "Ah, I will rid Myself of My adversaries, And take vengeance on My enemies.
25 I will turn My hand against you, And thoroughly purge away your dross, And take away all your alloy.
26 I will restore your judges as at the first, And your counselors as at the beginning. Afterward you shall be called the city of righteousness, the faithful city."

---------------------

Housing is so over-valued, and silver is so undervalued.  A bag of silver used to be worth about the same as a median priced house.

A median priced home in 2004 is now over $400,000 in California.
http://www.bizjournals.com/sanjose/stories/2004/04/26/daily38.html?jst=s_rs_hl

A bag of silver in July 2004 is now $4700 as of Tuesday, July 20th.
http://www.tulving.com/goldbull.html

In 1980, when the dollar was dying, but not yet dead, and when the gold and silver bull markets were halted prior to reaching full fruition, a silver bag could buy a house, both being worth about $30,000.  Silver hit $50/oz.

A bag of silver consists of $1000 face value U.S. coins, which is 4000 silver quarters.  In the 1930's, when silver was far more plentiful than today, and when silver was money, and when "money was scarce," a silver quarter was worth a day's wage. 

Today, that $400,000 home can be sold to acquire about (divided by $4700) 85 bags of silver, or about 61,000 ounces of silver.  Those bags of silver would contain (times 4000 quarters), 340,000 quarters, each of which should be more valuable than a day's wage, given that silver is more scarce today than ever before in history.

If you own a home, you should do the calculations on your home, and ask yourself:  "Would it really take that many days' labor to build my home?"

I only know of about 5 coin dealers or less in America who may have up to 85 bags worth of silver (and it's probably not all in coin form, some being bars, and/or one-ounce rounds).  These top 5 dealers with the most inventory have perhaps just over half a million ounces of silver all total among them.

Yet I suspect that there are probably more than 5 median-priced homes in the U.S. that could be sold to purchase that silver (this is a sarcastic understatement, meaning that it a true statement).

I have an email list of 10,000 people who are interested in silver, and silver stocks. 

The supply of silver available at the Nymex in the registered category, available for delivery, is 54 million ounces.  If we divide that by my list of 10,000 people, that leaves 5,400 ounces for each.

I sleep so well at night these days in the house I'm renting, because I have "more than my fair share" of silver.

-----------

Some people think silver will never move up, because "they are in control" of the price.  Ridiculous!  The only thing they can do is deceive people!

If they really were so "in control", then why did gold spike from $20 to $35 back in the 30's?  Why did gold spike from $35 to $850 in the 70's?

You know what?  The leading economists speculated that without the "support of the dollar", that the value of gold would plummet.  They were trying to express the notion that without monetary demand, prices would plummet.  They were wrong about the timing, but ultimately, they were right.  It did not happen right away, but by 1999-2000, they were correct.

Without monetary demand, silver prices are what they are.  Ridiculously low.

However, monetary demand will return, as sure as the law of gravity keeps the moon in orbit, and as sure at prices rose so swiftly the last two times.  Why? Because silver is money, and no amount of deception can change that in the end.

With bonds paying 1%, and with silver rising 50% since the recent lows, which is the better money?  It's not even a close call.

-----------

David Morgan of http://www.silver-investor.com has a free online TV interview (groundbreaking web cast technology) at http://www.freemarketnews.com/ where he discusses why paper money systems have always failed in human history.

He also refutes a few myths about money and financial collapses.

--silver is the primary "monetary metal" of use, not gold.
--in a collapse, real assets are not destroyed, they change ownership!

David suggests a modest 10-20% allocation to the precious metals sector, whereas I recommend a near 100% allocation: mostly silver and silver stocks...

If you've never been able to attend a gold show and hear David speak, you should go to http://www.freemarketnews.com/ and watch his TV web cast interview.

I’m a subscriber to David Morgan’s website, http://www.silver-investor.com.  He’s really worth listening to. 

------------------

Because I have a market reach, I also receive a lot of tips about silver stocks.  And thus, I believe I may have invested in some of the best ones that came my way.  If you believe I may have an edge based on my work and position... then the best way for me to share this with you is to is tell you where I put my money.  It's not investment advice.  I offer a monthly "look at my portfolio".   I do not issue recommendations, and I don't list number of shares or the size of my portfolio, but I will show the top investments in my portfolio, by rank, updated monthly.

To order: http://www.goldismoney.com/articles.php

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.

-------------------

When I attended the Vancouver gold show, mid June, I was interviewed on the radio by the Korelin Economics Report. See http://www.kereport.com/recent.htm

I will be speaking in Idaho at the Silver Summit in September 23-24
http://www.silverminers.org/summit/index.html

I will be speaking in Toronto at the Cambridge Gold Show on October 3-4.
http://www.goldshow.ca/

-------------------

SAFES: Need a safe to store your silver?  Steve Miele in Grass Valley at the Sports & Swap shop can deliver a safe anywhere in the U.S., and can have a safe custom built to your specifications, such as to hold silver bullion.  Call Steve at (530) 272-4179.  If you get a very large, refridgerator-sized, heavy safe, in excess of 1000 pounds, you have to have it delivered to a local loading dock or Freight dock, and then arrange delivery from there, which is a bit complex, because you may need to hire several people at such a freight dock to operate a fork lift.  (Sorry, I had the phone number wrong last week.)

General Commentary on Silver (slightly modified from last week):

Now, I think it's time that the silver community started a letter writing campaign to the editors of newspapers around the world, to tell them about silver. 

Here is a sample letter:

May 21, 2004

Dear Editor,

I'm a silver investor.  I believe paper money is fraudulent.  There is over 30 trillion dollars, U.S., worth of bonds in the world, but less than 2 trillion dollars worth of gold, according to gold.org. 

As of April, 2004, the size of M3, the money in U.S. banks, has reached 9.1 trillion dollars, yet due to fractional reserve banking, the total of U.S. currency and coin in circulation is only 724 billion dollars as reported by treas.gov.

At silverinstitute.org and cpmgroup.com, they each report that silver has been in a deficit for about 15 years, where world mine supply has been about 500 million ounces, scrap supply about 200 million ounces, and industrial and jewelry demand about 800 million ounces.  The difference, about 100 million ounces, has come from investor and government selling, drawing down reserves of silver.  Known supplies of refined silver are down to about 250 to 600 million ounces.   At the COMEX, they are down to 48 million ounces of silver left that is registered for delivery, which you can see at nymex.com. 

The governments of the world are printing up too much paper money, and the world is running out of real money, silver.  I believe this will lead to the price of silver rising dramatically in value, around the world.

I urge your readers to verify the statistics I have provided, and to make their own decisions.

Sincerely,

Jason Hommel
Grass Valley, USA
Goldismoney.com
(530) 274 3450

------------------
I wrote an article:
Miners to Use Silver as Cash - 27 November 2003
Apparantly, I was about 6 months too early in my predictions, but that's ok, I'm a very long term thinker and investor.  I did not miss the mark by too much time, and if you think in terms of decades, I was right on the mark.

 There are several companies that are increasingly deciding to hold their cash in the form of silver bullion.  These companies are:

SSRI SSO.V (SILVER STANDARD RSC)
SRLM.PK (STERLING MINING)
NPG.V NVPGF.PK (NEVADA PACIFIC GOLD)
EDR.V EDRGF.PK (ENDEAVOUR GOLD)

 ------------------
The Silver Valley in Idaho is bringing back the use of silver as money.  A silver one-ounce coin, a "Sterling" to be used as a $10 piece.
http://shoshonenewspress.com/index.asp?Sec=News&str=2869
------------------

For news on the New Hampshire Sound Money Bill, that proposes to use U.S. Treasury minted Silver Eagles and Gold Eagles as money see:  http://www.goldmoneybill.org/

25 Reasons why the Sound Money Bill Must Be Supported
by Jason Hommel

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 !

For more info, contact
Rep. Henry W. McElroy, NH State Representative
Sponsor of the bill
603-233-5892

Harvey Wharfield
978-635-9586

We also need assistance with the following. 

1.  Please contact your local representative to your state government.  Find out whether they might support a similar "sound money bill" in your own state. 

To contact your state rep to the federal goverment, see http://www.house.gov/writerep/
To contact your state rep to your local state government, you will have to find that on your own.  Try searching for "contact state representative california" and replace the name of your state in the search.

2.  If you know of any local representaives to your state government, who may be GOOD, LIKE MINDED REPRESENTATIVES, SENATORS, and GOVERNORS, who may like to support, or sponsor, a sound money bill in your state, please tell them about the NH initative.  Copy the above, and send it along to them.  And call Henry W. McElroy or Harvey Wharfield, and let them know of the other reps who may assist the cause.

3.  If you have an email list to people who may be interested in gold and silver as money, or who may be good conservatives, please send out this notice to the list, so the project can move forward! 

--------------------------
There are two excellent annual silver surveys that are sponsored by industry.

The survey by silverinstitute.org costs $195, 87 pages.
http://www.silverinstitute.org/wssum03.pdf -- 8 page free summary of last year's reeport.

The survey by cpmgroup.com costs $150, 162 pages.
http://www.cpmgroup.com/SSpress2004.pdf --3 page press release.

 The two reports present the case that about 500 million oz. of silver are mined each year, about 200 million oz. of silver comes from scrap, and about 100 million oz. of silver comes from investor dis-hoarding, either by individuals or government sources, in order to meet the annual demand of about 800 million oz. of silver by industry & jewelry.  This is wildly bullish, because investors are net selling more than buying, and I think the potential of investor demand is huge, and can be measured by seeing how much paper money there is in the world.
--------------------------

Here are two U.S. Government produced reports on silver, containing data on years from 1900 to present, on U.S. & world  production, and U.S. consumption, and U.S. industry & government stockpiles.

Report #1
http://www.goldismoney.com/ssr/USsilver.xls
Report #2
http://www.goldismoney.com/ssr/USsilver2.xls

I evaluated these government produced reports in my silver stock report #36.

In sum, we are running out of silver.  The U.S. government had over 3 billion ounces of silver in 1940, and today, has very little left, or none.

--------------------------

The Commodities Futures Trading Commission

The CFTC report on the allegations of manipulation in the silver market -- 9 page report
The CFTC report confirmes much of the research above, and almost outlines the bullish case for silver!
--My comments on the CFTC report are in silver stock report #34 & #35

--------------------------
Silver consumption, per capita, in the U.S. is the same today, in 2004, as it was in 1945.

And what is the per capita consumption of silver in the U.S. today?  5500 tonnes x 32152 = 177 million ounces of silver used per 285 million people.  177 / 285 = .62 oz. silver consumed per year, per person, in the U.S., whether in 1945, or in 2004.  Each person in the U.S. today, on average, uses 6 tenths of an ounce of silver. 
--------------------------

See my article: Biblical Guidelines for Managing your Money

As the New York Times, January 11, 1859, page 2 said---
"It is well known that the most colossal fortunes the world ever saw have been based on silver mines..."
--quote found by Charles Savoie

----------------------------

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.

----------------------------
A great overview on silver: Douglas Kanarowski's 78 Approaching Forces For Higher Silver Prices

See also Douglas Kanarowski's article:  What Impact Will Digital Photography Have on Silver?

Doug's third article is also excellent: Silver -- the next big thing in the global markets? Answering A Few Silver Questions

 ----------------------------

 See the 600 year silver chart to see how undervalued silver really is:
http://goldinfo.net/silver600.html

----------------------------
Look at the summary of the world silver survey by GFMS Limited on behalf of The Silver Institute :
http://www.gfms.co.uk/Publications%20Samples/WSS03-summary.pdf

Note, there is virtually no monetary nor investment demand. Note, the 2002 mine production (585 mil oz.) is greatly exceeded by industrial, photo, and jewelry demand. (838 mil oz.).  Note the chart on page five, "Supply from above-ground stocks".

The difference between mine supply and industrial demand was met by a combination of three factors: 1.  Government selling, 2.  Private selling, 3.  Recycling

U.S. government selling is ending, as their stocks have run out, or will run out.  This factor will reverse, because the U.S. government will need silver to continue their coin program, and/or need silver when they wake up and decide they need to replenish their strategic stockpile for domestic security.  Silver is a war material.  China's selling of silver will also likely turn into buying, as China will need silver for continued industrial development, or when they also lose faith in the U.S. dollar.

Private selling has been rapidly shrinking and is now almost ended, and should turn into buying, and become monetary demand.  Monetary demand is everything in the silver supply / demand situation.  It's not now.  Now, it's nothing.  But it will become something incredible, because the dollar is dying.

----------------------------
The following is a "must read":  Ted Butler's best ever explanation of how silver is manipulated lower than it should be.
http://www.investmentrarities.com/11-04-03.html

Over 3400 people have signed the silver petition to stop the manipulation at the COMEX:
http://www.PetitionOnline.com/comex/

Ted correctly points out that a lower price creates excessive demand from consumers.  However, Ted Butler does not point out, and neglects to mention, that a perpetually low price also creates lack of demand from investors who are "trend investors". 

I think most silver experts over-analyze all the supply and demand factors of the silver market.  No factor is more important than monetary demand.  The force of photographic demand is like a light breeze compared to the hurricane or tornado of monetary demand.  Monetary demand is everything.
----------------------------

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.  Very few investors understand value.  If people knew the facts and used their brains, the available above-ground refined silver would be gone by tomorrow, and the price would be well over $20-50/oz.  But don't trust me, check the numbers and follow the links:

"The money chart"

   1,000,000,000,000: 1 Trillion dollars
         1,000,000,000: 1 Billion dollars
                1,000,000: 1 Million dollars
$45,153,000,000,000: U.S. Household wealth, as of first quarter, 2004. (Includes Real Estate, and investments)
$33,000,000,000,000: World bond market, yr end, '01:  http://tinyurl.com/vr7u
$26,400,000,000,000: World stock market, June 2002: http://www.nyse.com/press/1044027443845.html
$20,200,000,000,000: U.S. bond market, yr end, '02:  http://tinyurl.com/vr7g 
$11,447,800,000,000: U.S. GDP, 2004 q1 http://www.bea.doc.gov/bea/dn/home/gdp.htm
$11,300,000,000,000: NYSE U.S. stock market, April, '04 (363 bill/s x $31.14/s ave.) http://nyse.com (See: Market info: quick facts)
  $9,101,000,000,000: M3 (money in U.S. banks) April, '04  http://tinyurl.com/vra0
  $7,183,392,668,476: US debt, 5-18-04   http://www.publicdebt.treas.gov/opd/opdpenny.htm
  $2,360,000,000,000: U.S. annual budget 2005 http://tinyurl.com/3xbd2
  $2,572,160,000,000: Marcos/Phillipine "black/unofficial" gold: 200,000 (to 500,000) Tonnes @ $400/oz. (Book: "Gold Warriors")
  $1,860,000,000,000: World "official" gold mined in all of history, 145,000 T @ $400/oz. http://tinyurl.com/vrcc
     $300,000,000,000: Estimated silver mined in all of history: 30-40 million oz?  @ $10/oz.
     $724,174,342,365: Total U.S. paper currency & coin in circulation, Dec. 31, '03  http://www.fms.treas.gov/bulletin/index.html
     $700,000,000,000: U.S. annual budget deficit (current). 
     $272,000,000,000: Market Cap of Microsoft (03-2004) http://tinyurl.com/vrcn
     $222,000,000,000: M3 increase (money in U.S. banks) from Jan 2004 to April 2004 (in three months).
     $180,000,000,000: Debt of Ford Motor Co. (03-2004) http://tinyurl.com/vrd1
     $104,400,000,000: US gold, 261 mil oz., @ $400/oz. http://tinyurl.com/vsr9
     $100,000,000,000: all the world's gold stocks/equities (estimated?)
       $75,000,000,000: Money flowed into Equity funds in the first quarter, 2004
         $8,226,000,000: all the world's "primary" silver stocks (80 of them on this list, as of June 25, 2004)
         $6,710,000,000: 671 mil oz. of "identifiable" silver bullion left in the entire world, according to GFMS @ $10/oz.
            $544,000,000: 54 mil oz. of "registered" COMEX silver bullion @ $10/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 stilll 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! 

See my prior essay, " Inflation & Deflation During Hyperinflation "

----------------------------
And the fund investors who buy paper silver futures contracts instead of real silver are a very odd bunch of fools, for they should realize that nobody can deliver 800+ million ounces of silver promised in the paper contracts and options that does not exist.  It's like the paper longs are betting on the bank run happening, but they all are making sure they get at the end of the long line.  Instead, they could go front and center, where there is an open window available where you can go and get physical silver, and nobody is there.  Idiots!  If you know a bank run is going to happen, and you are actually willing to bet on it, then go and withdraw your money before it is too late!  Don't bet on it happening, which, if it does happen, your contracts will be defaulted on!  Amazingly blind idiots.  Wake up!

See also my prior essay, "The Moral Failures of the Paper Longs"

----------------------------

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.
 
----------------------------
For a list of bullion dealers:
http://www.goldismoney.com/buy-gold.php

For a list of Brokers that handle Canadian issues and/or pink sheets:
http://www.bibleprophesy.org/SilverStockExtra.html

To track the 163 ticker symbols of the 100+ stocks on this list at yahoo:  (Updated on April 2)
http://www.bibleprophesy.org/SilverStockExtra.html

To learn All about Canadian law, 43-101, about reserves and resources:
http://www.bcsc.bc.ca/Publications/mineral_projects_sept03.pdf

A good website that hosts posting boards for many of the smaller canadian stocks (that Yahoo! finance does not have boards for) is stockhouse.com
Click on "Bullboards".
----------------------------

This is a list of primary silver stocks. 

I count a company's ounces of gold as 10 oz of silver. Why? Because I have a very strong positive bias in favor of silver over gold.

Given my bias in favor of much, much higher silver prices, then, to me, the grades of silver are far less important than buying more oz. in the ground.  More oz. in the ground at a lower cost is the most important consideration for me. 

My method is simple. Cost per ounce in the ground. How much do you get (silver reserve totals), and how much does it cost (market cap)? The cost is the market cap divided by the silver reserve totals. Cheaper is better. Buy low, sell high.

Disclaimers, Warnings, and Advice: I have gathered the information below over the course of several months. I believe it is accurate to the best of my ability. I have made mistakes in the data from time to time. I'm human. I have collected the information from public sources such as company web sites and public information found at yahoo.com to get the stock prices. This report in no way guarantees the accuracy of the information below, since the information may change at any time. The number of outstanding shares can change as a company engages in new share issues to raise more capital through private placements, or if outstanding warrants (and options) are exercised and converted into shares, or if shares are bought back. Shares can be consolidated, or split. The number of ounces of silver in the ground can also change, as these are often only estimates. The number can also change up or down, depending on drilling results.

This report is not investment advice.  This report contains information that may or may not be up to date, and may be inaccurate.  I urge you to contact the company and do your own research to verify the information contained in this report.

This report is not an offer to buy or sell any securities.  I am not a broker.  Only your broker can buy or sell securities for you.

I urge you to consult with your investment advisor to determine whether these kinds of investments are right for you. 

I also caution you to be aware of your investment advisor's advice, they are sometimes paid to push things like mutual funds, bonds and other securities that may not be in your best interest to buy.  Some investment houses are short physical metal, and thus, they may attempt to strongly discourage you from buying precious metal or precious metals investments.  I believe that the propaganda machine in support of frauds such as bonds and the dollar is so strong, that they may even believe what they say when they give bad advice to avoid the safety and protection of precious metals.  It is most likely that they simply do not understand the precious metals market as well as you do.

All total estimates of "ounces in the ground" can vary widely. There are "proven and probable reserves" which are the highest category of certainty which is obtained through many drill holes, and then at the least accurate, there are "inferred resources" which are hardest to estimate. Additionally, every miner always has "more silver properties that need to be explored, which probably contain more silver". For the purposes of this report, I have added all those numbers together. It is believed that all these "ounce in the ground" estimates can be profitably mined at $5-6 per ounce silver, or lower. Thus, I believe that when silver trades for $15/oz. or above, that all of these ounces can be mined at a substantial profit.

I may be wrong. (I probably make mistakes in every article, and there have been updates and corrections made each week, especially as prices change.)

Mining is a risky business. You need to be willing to sustain a total loss of your investment for various unforeseen accidents. Silver stock companies can do stupid things to shareholders such as take on debt, or issue more stock at too low prices which reduces the percentage of the company you may own (dilution). Yet, they need to issue shares to raise capital for drilling, and then an even bigger dilution to build a working mine. They may sell YOUR silver too cheaply, or worse, hedge the price of YOUR silver just as it begins to go up if they lock in a price which then proves to be too low if the dollar is destroyed. Mining is a risky business as estimates of assets in the ground can change. There is political risk and environmental risk. They can't franchise the business, are stuck in one location, are subject to government confiscation, or taxes, or union wage negotiations, and corporate looting.

Do your own research.  Be responsible for your own investment decisions.  Again, please, before investing in a mining company, call up the company, and speak either with the CEO or the Investor Relations contact person.

Contact the company.  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 started an initial valuation process of the following silver companies to guide 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 four companies, BHP, GMBXF.PK, KGHM and BVN  produce a lot of silver, but look to be way too 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. 

KGHM Polska Miedz
http://www.kghm.pl/en/index.php
--KGHM is the world`s sixth-largest coppper producer and second or third in silver.
1163 tonnes of silver produced in 2001.
1163 x 32152oz.tonne = 37.4 million ounces of silver produced in 2001
--Copper/Silver mine in Poland.
--Market capitalisation is about  $$1.52 billion.

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 stilll don't have anything exciting for the silver alone.
$2085 mil MC / 280 = $7.45/oz. cost.

Compania de Minas Buenaventura SA (BVN)
http://www.buenaventura.com/
NYSE:BVN
- Peru´s largest publicly traded pprecious metals company
--produces over 10 mil oz of silver per year
--looks way too expensive for the silverr alone: 3.6 Billion market cap.
 -------------- -------------- --------------

ABX (Barrick)
http://www.barrick.com/
535 million shares outstanding (1 Q 2004)
@ $19.49/share
$10,427 million Market Cap
5.5 million oz. / year gold production.
--production hedged out for 3 years, or about 15 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 "unheedge".
--reportedly, they plan to deliver 1/3 oof production to hedges, which means they will be hedge free in about 10 years.
--the size of the hedge, 1 Q, 2004: 14.7 mil oz. gold, at $400/oz., would be valued at $5.9 billion dollars. 
--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: $850 million
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."
$10,427 million Market Cap / 1710 mil oz. = $6.10/oz. silver
You may get "approx" 1.04 ounces in the ground for 1 oz. silver's worth of stock, if the silver isn't hedged.

Additional comments:  Barrick earns $26 million in first quarter.  x4 = $104 million, which gives a P/E ratio of 103.  Ouch, that's high.  The hedge book loss was $10 million. 

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. 

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. 

1 Q 2004 note on hedging silver, p. 33:  "At March 31, 2004, we had fixed-price commitments to deliver 22.3 million ounces of silver over periods primarily of up to 10 years.  We also had written silver call options on a notional 7 million ounces of silver with an average exercise price of $5.76 per ounce.  These options expire at various dates in 2004 and 2005.  The options are classified as non-hedge derivatives for accounting purposes.

Looks like they never closed out the silver hedge, like they said, but that they just bought options or futures that expired, or maybe were rolled over.  I don't know whether they stilll have paper contracts that offset their hedges.  In fact, perhaps the dip in the silver price can be explained by the options that Barrick wrote on some silver? 

I expect silver bullion to continue to outperform ABX stock at these prices.   I don't really count Barrick as a silver company... Let me be abundantly clear.  I primarily list Barrick to show how poorly it compares to all the rest, and to help show how much better the rest compare.  This is a "comparative valuations" report, after all.

CDE (COEUR D'ALENE)
http://www.coeur.com
coeurir@coeur.com (208) 769-8155 or (800) 624-2824
214 mil shares outstanding (June 2004) not fully diluted
@ $3.35/share
$856 mil MC
"Current cash, cash equivalents and short-term investments stand at approximately $252.7 million at January 31, 2004, giving effect to recent $180 million offering of 1.25% Senior Convertible Notes due 2024, net of offering costs."
July 15th, 2004:  Cour Presents Resources in Cdn 43-101 form:
http://biz.yahoo.com/cnw/040715/id_coeur_d_alene_mine_1.html
Total of proven & probable reserves: 175 mil oz. silver, 1.4 mil oz. gold.  Total silver equiv: 189 mil oz.
Total of measured, indicated, and inferred resources:  76 mil oz. silver, 1.4 mil oz. gold.  Total silver equiv: 90 mil oz.
(This increases the number from 189 mil to 279 mil oz. silver).  Before, Cour was not reporting any resources, only reserves.)
(Produced 14.2 mil oz. silver in latest fiscal year (early 2004)
$717 mil MC / 279 mil oz = $2.57/oz.
You get "approx" 2.46 ounces in the ground for 1 oz. silver's worth of stock.

Additional comments: CDE's page on silver, "The Value of Silver" says nothing about silver as money.  Unbelievable!

Wheaton recommends rejecting the CDE buy out offer:
Wheaton Does not Intend to Pursue the Coeur D'alene Mines Proposal: Recommends Shareholders Vote IAMGold Combination
Monday May 31
http://biz.yahoo.com/bw/040531/315071_1.html
Interestingly, as one reason, Wheaton says: CDE has a history of losses and negative operating cash flow.

Quarterly Loss Reduced From $31.2 Million a Year Ago to Just $3.0 Million in 2004's First Quarter
As of May 5th, CDE announced: No silver or gold hedge positions in place.

For the full year 2003, the Company reported a net loss of $67.0 million, or $0.40 per share, compared to a net loss of $81.2 million, or $1.04 per share in 2002.

Why does CDE continue to mine and sell silver at a loss?  Why has CDE borrowed $180 million to continue expanding this business plan?  Why couldn't CDE have raised the money from issuing more shares?  Why has CDE stock increased over seven times from about 30 million shares outstanding at the end of 1999 to 214 million shares outstanding by the first quarter 2004?  How was CDE able to secure such favorable terms for a loan? "giving effect to recent $180 million offering of 1.25% Senior Convertible Notes due 2024, net of offering costs."" Who did CDE borrow money from?  Who stants to gain if CDE continues to produce silver at a loss? 

If CDE produced silver at a loss during the first quarter 2004, how much money will they make if silver hits $10/oz?  Perhaps the break-even price for production is a constant $8.00/oz.?  Regardless of their "cash cost" numbers.  If so, and if CDE produces 15 million oz. of silver per year, then at $10/oz., CDE may make up to $30 million dollars, at the most, from their silver production, if none of their other costs like energy costs rise in price due to inflation.  Mining uses a lot of energy, just so that you know, so I don't think it is likely that CDE will have profits even with higher silver prices in the $8-10 range due to inflation.   Given that CDE has a market cap of up to $1000 million dollars, CDE just is not worth it at all, in my opinion.  And neither would CDE stock be worth the price if they had a market cap of $300 million, in my opinion.  I would rather own silver, as it moved in price from $6 to $10.  And in the meantime, CDE may well move in price from $6.49/share down to $2.16/share (assuming no further dilution, and a reduction to a more reasonable $333 million market cap), and by then, with silver at $10, CDE may have a P/E ratio of 10, and a huge heavy debt load of $180 million dollars that may take up to 6 years of possible profits to pay off. 

At $2.16/share, $10 silver, and a P/E of 10: $333 mil MC / 189 mil oz. = $1.76/oz.  = You'd get about 5.68 oz. of silver for each silver oz. worth of stock.
I expect silver bullion to continue to outperform CDE stock at these prices.

IPOAF.PK (INDUSTL PENOLES)
http://www.penoles.com.mx
397.5 mil shares outstanding (2002 annual, unchanged since 2001)
@ $3.85/share
$1530 mil MC
419 proven and probable reserves of silver (from 2002 annual report on website)
$1530 mil MC / 419 oz. silver = $3.65/oz.
You get "approx" 1.73 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.  Produced 21.5 mil oz. silver 1 Q 2004 (Net earnings of $342.5 million 1 Q 2004)

The word late Feb. 2004 from ECU Mini, who reported to lemetropolecafe.com, is that Penoles has hedged several year's worth of silver, that is, they have locked in to sell mostly all their silver at low prices.  Set when prices were lower.  How much lower, and at what price, is anyone's guess.  As reported at lemetropolecafe.com, "We know the market is so tight even the world’s largest silver producer, Mexico’s Penolas, wasn’t thrilled about supplying 1 million ounces for a special project with ECU Silver, led by their extremely able CEO Michel Roy."

78.5 million oz. silver refined by the metals division in 2002, and 1 mil oz. gold.
They probably refine almost all the silver that comes out of Mexico.
They probably produce about 34 mil oz. of silver from their mines annually, and they have expansion plans. 

I've heard this stock is tightly held, most is family owned. 

Their oz. numbers are "proven & probable reserves", which is much more certain than most of the others which are mostly "inferred and indicated resources."  They undoubtedly have "inferred and indicated resources" in addition to the "proven & probable reserves," I just could not find any info on that at the website or in the annual report.

Given the report in March, 2004, that Penoles has hedged silver for two years, I expect silver bullion to continue to outperform IPOAF.PK stock at these prices.

SIL (APEX SILVER)
http://www.apexsilver.com/
information@apexsilver.com (303) 839-5060
47.4 million shares outstanding (late May, 2004) (not fully diluted)
(derived from share price & market cap, late May, 2004)
@ $17.67/share
$838 mil MC
cash on hand: ~ $390 million March 2004
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
$838 mil MC / 454 mil oz = $1.84/oz.
You get "approx" 3.42 ounces in the ground for 1 oz. silver's worth of stock.

Additional comments:  Apex's webpage on silver, "Commodity Fundamentals" says nothing about silver as money.  Unbelievable and shameful!  Unless you count this phrase, "As a precious metal, it has been a source of human adornment since the beginning of time."  At least they recognize that silver is a precious metal, and at least they recognize it has been precious since the beginning of time.  That's a start! 

Bullishly, they note:  "As a result of the silver inventory drawdown, by the end of 2002, the worldwide stockpile of refined silver has been reduced to levels sufficient to satisfy less than approximately six months of the existing demand."

A positive article was written about Apex in Business Week Online:
A Bright Gleam On Apex -- Friday June 4

"Apex has rights in some 100 mineral-exploration holdings at 34 properties in countries such as Bolivia, El Salvador, Mexico, and Peru."

The article's analyst notes that in 2-3 years, when/if production comes online, "At silver's current price of $6 an ounce, Apex could earn $2 to $3 a share, he figures. If silver runs up to $10, earnings could hit $6, he says." 

I note that this means that at a P/E of 10, if production comes online, Apex may more than tripple in 3 years to $60/share, while silver nearly doubles.   That's not much leverage, given the increased risks of mining and owning a public company, and given that management of Apex seems to not recognize that silver is money, and debt is aweful.
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%.

See my silver stock report #40 for reasons why Apex will not likely use their cash to buy silver bullion while they wait for higher silver prices.

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. For zinc prices, see http://www.metalprices.com

Apex is not mining now, but are waiting for higher silver prices.  George Soros, Billionaire, owns a bit of this one, his group of funds owns over 14% I read recently.  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. 

GRS GAM.TO (GAMMON LAKE)
http://www.gammonlake.com/
gammonl@sprint.ca (902) 468-0614
62 mil shares Fully Diluted: (Feb 27th, 2004)
@ $6.19/share
$384 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.
$384 mil MC / 231 mil oz.= $1.66/oz.
You get "approx" 3.80 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: 
At 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. 

GAMMON LAKE INTERSECTS 1-METRE OF 390 GRAMS PER TONNE GOLD AND 1,402 GRAMS PER TONNE SILVER  (13.2 OUNCES PER TONNE GOLD-EQUIVALENT) June 10

 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 (March 2004)
 @ $1.87/share Cdn x .76 US/Cdn = $1.42 US
$55 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.
$55 mil MC / 42 mil oz. = $1.31/oz.
You get "approx" 4.84 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.

1st Q, 2004, FSR.TO earned $1.45 million Cdn?, or 4 cents/share, ending a string of losses for the 6 quarters prior.  Seems as if their break even cost to mine is $6.00/oz silver.  Produced 565,332 oz. silver for the quarter, and 1288 oz. gold.

They are unhedged, and remain committed to remaining unhedged.

PAAS (PAN AMERICAN SILVER)
http://panamericansilver.com/
info@panamericansilver.com (604) 684 -1175
70 mil shares fully diluted (April, 2004)
http://panamericansilver.com/s/CorporateInformation.asp?ReportID=26039
@ $13.56/share
$949 mil MC
10 silver properties (3 in production)
produced 7 mil oz. silver in 2001:
Reserves & Resources through Dec. 11th, 2003 from
http://panamericansilver.com/s/ReservesAndResources.asp?ReportID=25303
743.2 million total
$949 mil MC / 743 mil oz. = $1.28/oz.
You get "approx" 4.95 ounces in the ground for 1 oz. silver's worth of stock.

Additional Comments:  PAAS is hosting the 2004 Silver survey summary by GFMS for the Silver Institute

On PAAS's page on silver fundamentals, it says little about silver as money.  Except maybe for the following phrases: "Many analysts forecast continuing weakness in the US dollar in 2004, which should bode well for higher silver prices." and " The outlook beyond 2004 is also promising for the silver market, due to continuing investment demand..."

  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.

PAAS stilll refuses to recognize that silver is money, and they refuse to hold their money in the form of silver.
What if your silver company decides to lock in silver prices at $8, and hedge years of production to "protect the shareholders and provide exposure to the high $8/oz. price," only to watch silver prices head past $25 and past $50/oz?  Your stock could get wiped out in bankruptcy, and your investment could go to zero value!  This is the danger of stocks!  Your investment is subject to the whims of management!

WARNING: PAAS says at their website that they may 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."

In my opinion, hedging prudence depends entirely on the price level to which silver will rise as denominated in dollars.  Since I believe the potential is for silver to cross over $2000 to $4000 per ounce (on the way to infinity) in a monetary collapse, I would never hedge silver and never lock in a dollar price for long term production.  If PAAS will, it goes to show that they don't view silver as money, which is a counterproductive management philosophy for a shareholder who intends to invest in PAAS for the exposure to rising silver prices. 

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. 

MFN MFL.TO (MINEFINDERS)
http://www.minefinders.com/
39.1 mil shares fully diluted 1 Q 2004
@ $6.54/share
$256 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."
$256 mil MC / 195 mil oz. = $1.31/oz.
You get "approx" 4.82 ounces in the ground for 1 oz. silver.

Additional Comments:  At 70:1 silver to gold ratio, over half of MFN is in gold, so consider this a significant gold bonus. MFN also now lists their resource figures on their website's main page.  I'm sure investors appreciate this.  I do. 

KBR.TO KBRRF.PK (KIMBER RESOURCES)
http://www.kimberresources.com
info@kimberresources.com (604) 669-2251
31.6 mil shares fully diluted (Apr 20, 2004)
http://www.kimberresources.com/sharestructure.html
@ $1.75/share Cdn x .76 US/Cdn = US $1.33
$42 mil MC
from http://www.smartstox.com/reports/kbr.pdf
30 mil oz. silver resources Measured & indicated, plus inferred
540,000 oz. gold x 10 = 5.4 mil "silver equiv."
$42 mil MC / 35.4 mil oz. = $1.19/oz.
You get "approx" 5.32 ounces in the ground for 1 oz. silver's worth of stock.

Additional comments:  Kimber Reports Significant Drill Hole On Carmen Deposit

A one property company.  The Carmen gold-silver deposit on their Monterde property in the Sierra Madre belt of Chihuahua State, Mexico.  Significant exploration potential.

It was reported by a press release that 16%-17% of KBR.V is owned by silver bull Jim Puplava of http://www.financialsense.com, which I think is a rather solid endorsement of the company.

WTZ WTC.TO (WESTERN SILVER)  (formerly western copper)
http://www.westernsilvercorp.com  
info@westernsilvercorp.com Jay Oness Toll Free: 1-888-456-1112
43.3 mil fully diluted (July 2004)
@ $6.03/share
$261 mil MC
(not actively mining)
$14 million Cdn in cash in the tilll (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.
$261 mil MC / 287 oz. = $.91/oz.
$261 mil MC / 1000 oz. = $.26/oz. --exploration potential
You get "approx" 6.95 ounces in the ground for 1 oz. silver's worth of stock.
Exploration Potential = 24

Additional comments:  WTZ's silver page: "Why Silver?"  While acknowleding the silver fundamentals as produced by the Silver Institue, and shrinking supplies, it says nothing about silver as money.  WTZ acknowledges their role is to make sure their shareholders are "well positioned to take advantage of any shortage of supply or rise in the price of silver."

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 mil