5 Micro-Cap, Multi-Property, Silver Explorers
Silver Stock Report
by Jason Hommel, March 3, 2007
This week's Silver Stock Report is presented by Theodore Terbolizard of tedsaidit.com
Click here to see the video at Youtube!
Allow me to introduce you to 5 silver companies.
These stocks are the type of companies to look for in this market of exploding silver prices.
These five companies all have several things in common.
The companies are all very cheap, with market caps between $7 and $22 million. The stock prices are all under a dollar. They each have to be very careful about how they spend anywhere between half a million to a few million dollars, tops, each year. They each have solid reasons to expect exploration success leading to a major discovery. They each have a very solid property package that consolidates a silver area, but have enough diversification so their hopes for success are not all riding on one exploration property. They all have about ten properties to explore, and probably not enough time or money to explore them all. Each company is managed by a team of seasoned veterans who have managed to weather the bad years of the metals bear market for most of their long careers.
None of them have resources that confirm to Canada's "43-101" regulation.
Although Tumi, one of the five, may have about eight million ounces of silver in a historical resource in LaTrini.
Two of the other companies, Klondike Silver, and International Millennium, each have solid positions in silver camps of former "silver rush" areas in Canada.
The last two companies, Silver Grail and Mountain Boy, both have positions in the Stewart-Eskay area, near the Eskay-Creek high grade silver-gold mine, that is the fifth most productive silver mine in the world, currently operated by Barrick.
None of these companies have major difficulties with infrastructure, such as access to roads or power, as all of them are located at or near former producing mines.
All five trade on the Canadian Exchanges, so if you live in the U.S., to buy them, you will likely have to buy the stocks on the "pink sheets". The best way to do that is to look up the price with the Canadian symbol, then multiply by the exchange rate, then place a limit order with the pink sheet symbol. Never trust pink sheet price quotes denominated in U.S. dollars; they are usually delayed by a day or more, and are thus outdated and unreliable.
Here are specifics on the five companies, starting with the largest market cap, first.
69 million shares fully diluted
$.37/share Cdn x .85 = $.31/share
$22 million Market Cap
Klondike has a majority land position at the Slocan camp in Canada; and they have many former producing mines on their properties, and they could, if they wanted to, start producing silver very quickly.
I own 371,713 shares. I own 571,713 warrants at $.20 Cdn that expire in November, 2007.
My purchase price: $.20. Current gain: 85%
I own 5 days worth of average daily trading volume.
31.3 million shares fully diluted
$.53/share Cdn x .85 = $.45/share
$14 million Market Cap
Tumi's aerial survey work of their La Trini property in Mexico suggests that they could have from 50 million to 100 million estimated ounces of silver in the ground in Mexico. They have also staked many former high grade silver mines in Sweden.
I own 708,500 shares. I own 200,000 warrants at $.80 Cdn that expire in April, 2008.
My purchase price: $.60. Current gain: -12%
I own 22 days worth of average daily trading volume.
44.2 million shares fully diluted
$.35/share Cdn x .85 = $.30/share
$13 million Market Cap
International Millenium has 10 properties in North America.
Their flagship properties are located in the "Silver Capital of Canada" in Cobalt, Ontario, where very high grade "slab silver" has been found in many former producing silver mines.
I own 1,080,000 shares.
My purchase price: $.25. Current gain: 40%
I own 14 days worth of average daily trading volume.
Mountain Boy Minerals
19.2 million shares fully diluted
$.75/share Cdn x .85 = $.64/share
$12 million Market Cap
Mountain Boy has 11 properties, mostly in the Eskay-Creek area of B.C. Canada.
Mountain Boy has hit some very high grades, up to several kilos of silver per tonne. Their stock is among the most liquid of this group, trading up to 60,000 shares in a day.
I own 150,000 shares.
My purchase price: $.78. Current gain: -4%
I own 3 days worth of average daily trading volume.
18.2 million shares fully diluted (Includes the Sept., 2006, financing.)
$.46/share Cdn x .85 = $.39/share
$7 million Market Cap
Silver Grail has joint ownership of about 9 properties; mostly located in the Eskay-Creek area of B.C. Canada.
Silver Grail has done an aero-magnetic survey over the Konkin Silver property that seems to indicate that it is bigger than the Del Norte property to the north that is being explored by the far larger company, Sabina Silver. Wheaton River, a billion dollar silver major, now owns approximately 10% of Sabina. Silver Grail faces the very real possibility that its operation will be pursued by these Silver majors.
I own 1,751,000 shares.
My purchase price: $.11. Current gain: 318%
I own 56 days worth of average daily trading volume.
There may be a buying frenzy on these stocks starting at about March fifth, so it may be unwise to try to buy any of these stocks in the immediate 2 week period after this video is produced. Instead, you may wish to put these stocks on your radar screen, and do some due diligence for a month. Maybe, if the silver market is still in a slump, you can quietly accumulate these stocks when there is no "frenzy". Another smart time to buy is 4 months after a private placement, when the private placement investors are allowed to start selling. International Millenium has just raised a few million in conjunction with their recent new listing. Silver Grail was working on a private placement back in September, and that may help to explain the current weakness in that stock now.
If you try to buy these stocks on the open market, you may wish to limit your exposure to perhaps no more than one day, or a few day's worth of an average day's trading volume. If you wish to buy more than that, you might want to take an initial position on the open market, and then, it may be best to call the company and ask them repeatedly to contact you when they do their next private placements, where they sell stock to raise the money for the next round of drilling.
None of these companies are making money mining. None of these companies are even close to mining anything, except Klondike. First, exploration companies have to locate drill targets, which may take up to a year or more. Then, they have to do a small first round of drilling, which also may take up to a year or more. If they are blessed, they may end up doing further rounds of "resource" drilling to prove up a resource which may take up to a year or more. Then, they may conduct a pre-feasibility study which may take up to a year or more. Then, they may have to secure a mining permit which may take up to a year or more, and do environmental impact studies which may take up to a year or more. Then, they have to do a final feasibility study which may take up to a year or more. Then, they have to raise the money to construct a mine which may take up to a year or more. Then, they have to spend that money to build a mine which may take up to a year or more. Then, they have to hire all the people to run the mine which may take up to a year or more, assuming that their project is good enough to attract top people away from other less exciting projects. And if they are very fortunate, after 5-15 years, hopefully when silver prices are higher, they may show a profit from mining silver, or gold, or maybe something else that they may find, such as zinc or molybdenum. But in this environment of low silver prices; hardly anyone makes money mining silver today, which is why these companies are so cheap, and are being mostly cautious about not spending too much money too quickly.
Likewise, you ought to be cautious about where you invest your money, especially in penny stocks such as these you might learn about online.
Nevertheless, the junior explorers are the ones engaged in true wealth creation.
SEC Disclaimer: As indicated, I own positions in all 5 of these stocks. No company has paid me any money, or given me any stock to promote their company.
If you would like to see some of the other stocks I own, please sign up to take a look at my portfolio.
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