A day's wage used to be a silver dime, a silver quarter, or maybe a
silver dollar. A silver dime
today costs about 45 cents, at $6.20/oz. for silver. About 900
million oz. of silver are consumed annually, and just under 600 million
ounces mined annually. Oddly, there is is seven times as much
refined gold as silver... Buy real silver, it is scarce, real
wealth, and cannot go to zero value. By the time paper money
fails mankind once again,
as it always does, any silver dime you can lay your hands on will
probably be worth more than what $100 to $200 will buy you today.
This week's report lists the market capitalizations for 86 silver stocks. There are 31 silver stocks that list reserves,
resources (and exploration potential) which I
calculate by using my "ounce in the ground" formula. There are 54
explorers. There are about 30
additional "silver" stocks with incomplete
information. This report goes
out now to over 11,700 investors each week. Additions & Changes
last week are in bold.
How to read the table below:
Stock Symbol that works at Yahoo! Finance (Company name) / The
number that follows the company name, below, represents the company's
resources, divided by the market cap as denominated in silver; thus, it
is the number of silver oz.
"in ground" that you gain title to when you trade away one ounce of
silver to buy 1 oz. of silver's worth of stock. The number is the
expression of leverage that silver stocks can give you, the higher the
number, the better. / Next, I list the valuation price change
since last week (and stock dilution, and resource changes,
if any) as up/down or even. / Finally, there are additional comments (EXPT is "exploration potential")
Company names in bold have summaries below with updated information since last week. Click on the name to see the summary below.
This first list are the companies with information about reserves/resources/exploration
potential. The list is ordered/ranked based on the resource
picture. The most expensive (with the fewest silver resources
given their market cap) are listed first.
1.0 even --producer, hedger (15? mil oz. gold
hedged, 3 yrs production)
This next list has silver exploration companies with market caps under about $30 million
(Market cap = total number of shares
fully diluted, times the share price. It's what the company is
"worth" in the market place, given the stock price, and is one of the
important numbers I calculate each week in these lists.)
* = 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
See the 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
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
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. The resource calculation number is 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.
My methodology is the natural result of my study of the silver market
and my religious views. To read about my religious views, see my
other web site, 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. See Ezekiel 38. Also, see my essay: Biblical
Guidelines for Managing your Money
See my June 18, 2004
insanely bullish on silver.
To quickly "tab" down to the company you are interested in, note the
symbol. Then hit "control-F" to "FIND" the symbol below.
If I use a word you don't understand and is not listed in the
dictionary at www.m-w.com you can
look up the meaning at http://investorwords.com/
WEEKLY COMMENTARY (All new in this section):
My wife and I
had a lovely wedding two Saturdays ago, and I love being married to my
new wife, Shanna Hommel. We had a "honey-work" vacation to the
Silver Summit in Idaho. We got married just in time! Due to
the fact that I was travelling between Wednesday and Sunday, I did not
produce a weekly report last week. I think this was the
third time I've skipped one. Amazingly, since I've skipped a few,
I've been doing this over a year now! Boy, does time fly by when
video-taped me when I spoke, so my presentations will soon be available
for purchase. I gave an hour-long presentation the day before the conference,
which was followed by two and a half hours of questions and answers,
for 3.5 hours total, but only the first two hours were taped. On
the second day, I finished off the conference with a 15 minute talk on
silver, and why it is money, and why the mining companies should use it
The miners should not hold cash in the bank, they
should hold silver bullion in hand. If the silver miners refuse
to use silver, their own product, in the best and most useful way, as money, then
who will? Miners need to be leaders, and promote their own product
with their actions by holding their money in the form of silver!
The biggest development at the conference, in my opinion, was that many
shareholders are now growing increasingly aware of this issue, as the
major silver companies have just recently become cash rich due to
financings and due to investor sentiment growing so bullish for silver
Attention Shareholders! The miners will not change, unless you demand
change! I, alone, cannot continually badger the miners by myself effectively, especially
if I'm not one of their shareholders. If you want this change,
you have to contact management yourself! Ted Butler and I need more help.
If you are an owner of cash rich silver stocks, and if you are also a
holder of silver bullion because you know it provides the necessary
safety and liquidity for you, then you should demand that your
mining companies also take advantage of the safety and liquidity that silver bullion offers its owners.
I think the top five silver miners have about a billion dollars in
cash. With that money, if they bought silver, I think they could
break the manipulation at COMEX. However, with the limits at the
COMEX of 1500 contracts per person, and a possible total delivery limit
of 1.5 million ounces in one month, would the miners even succeed in acquiring the silver they attempted to buy, or
would they drive up the price with even less effort?
Let me state boldly that I have an agenda, a plan! Agenda--"2: an underlying often ideological plan or program"
My ideological plan is to convince
use silver as money, in preference over paper cash. This will
the silver price more than anything, as monetary demand is
everything! My plan is to convince shareholders to demand their
silver companies to use silver as cash. Then, after all the top 4
or 5 silver miners have substantial silver bullion holdings, we can
more easily and effectively get other public companies to invest their
surplus cash into
silver bullion to protect their money from continued dollar
devaluation. (This is why it is so important for the miners to
act! To get the miners to lead other public companies by way of example! Shareholders who
own bullion are the real leaders, and will direct the companies they
own to act next.)
After all, the public action of silver companies buying silver will be
such a clear action that it will make the rest of the investment world
wake up and take notice of silver!
The next public companies to convince,
I believe, are the gold companies. Ending hedging is one
thing. Ending the participation in paper dollar holdings is the
next logical step, since the dollar is really a failed derivative of
Step two really consists of getting
public companies, who are not involved in the metals sector, to
gold, but especially silver. The two most likely companies, I
believe, are Ford Motor Company and General Motors. The reason is
that these companies are widely recognized, and are the backbone of
American industry. Also, they are excellent candidates because of
the heavy debt load that these companies carry. Ford owes $180
billion! GM owes $280 billion! But their market caps are
only around $25 billion! They each have billions in
cash! Ford has over $15 billion and GM has over $25
billion. That GM has about as much cash as their market cap
means that the market is strongly considering the possibility that GM
may go bankrupt! Since they may go bankrupt (unless massive
inflation saves them),
buying silver bullion may be the only way that GM can survive!
Why should I offer advice to companies in debt? Well, I have a
bias against bondholders, since I know that usury
is wrong. Therefore I would rather that GM protect their
shareholders and pay back their bondholders with devalued paper money.
Now, contrary to Richard Russell's
idea that excessive debt will create a demand for cash to repay the
debt, and thus,
deflation and increased value of dollars, (and reducing the value of
precious metals). I believe the opposite will
take place. After all, it is simply inconceivable that GM can
sell silver or gold at today's prices to raise the cash to pay back
their bonds! First, it's impossible because GM does not have any
silver or gold, and second, GM would have to sell more gold than the US
gold hoard to do that, and that is just not reasonable at all.
Richard, are you listening? You have 12,000 paying subscribers I
hear? Help them out, and start talking some sense on this topic,
I believe, from my personal research
and a look at the statistics from the silver institute and the CPM
Group, that even one billion dollars of demand for silver will drive
the silver price much higher. I also believe that Ford and GM
will only be able to avoid bankruptcy if there is a massive
inflation. I also believe that either Ford or GM could cause the
inflation to occur that will save them if they merely put some of their
corporate paper money into real silver money.
Example: If GM puts $1 billion dollars into silver bullion, it
could drive the price to $20-50?/oz. Their next billion dollars could
drive the price to $30/oz. Their third billion dollars could
drive the price to $40/oz. By the time GM invests $10-15 billion
dollars, the price of silver could be $100/oz. By the time GM
invests $25 billion dollars, the price could well be $200/oz.
Such growth in the price would then attract many other investors, who
could well push the price of silver to $1000/oz. By that time,
GM's investment in silver bullion could grow, as follows:
$1 billion at $20/oz = 50 mil oz. silver
$1 billion at $30/oz. = 33 mil oz. silver
$1 billion at $40/oz. = 25 mil oz. silver
$15 billion at $100/oz. = 150 mil oz. silver
$7 billion at $200/oz. = 35 mil oz. silver
Total silver = 239 mil oz. silver --perhaps more silver than the world
has, estimates of which range from 67 mil oz. to 600 mil oz.
Total value of that silver at $1000/oz.? $239 billion, which is
slightly less than what GM needs to pay off their debt of $280
billion! Of course, if the silver and gold price "go to infinity"
as the dollar fails completely, then their debt, and all debts, will be
wiped out completely, and any and all silver bullion accumulated will
be a substantial and necessary asset!
There is precedent that this can occur, since a few years ago,
Ford stocked up on palladium when prices hit over $1000/oz., and
delivery failures were happening.
It is ironic that government devalued and demonetized silver about 100
years ago by declaring that silver was not an acceptable form of
payment for debts over $5! But as we know, nearly all such
idiotic and false government decrees (such as "silver is not money" and
"money (silver) cannot be used to repay debt") eventually
cause the exact opposite to occur. Silver will soon be
re-monetized as never before! The irony now is that the only way
people will ever be able to pay off their debts is to start buying
silver! The resulting price increase of silver, and inflation,
will help the people, and large corporations, to get out of
Please note that I am not advocating going into debt to buy
silver! Debt is dangerous! And debt is especially dangerous
when at an interest rate! And this brings me to my next topic,
that of interest rates!
UNDERSTANDING INTEREST RATES & COMPOUND INTEREST!
I have recently learned something staggering about interest rates that
I must share. For few years, I have known that over a few
generations, say 240 years, at 6% annual compounding interest, you can
grow $1 into a million! (This is not common knowledge.)
(More importantly, from this example, you can turn a million into a
trillion!) This is an important concept, because it shows how
those who lend money at set interest rates, 6%, with collateralized
loans, can quickly gain world power over national governments.
All you need is a religious code that teaches the next few generations
of your children all about lending to strangers, and you have it.
Interestingly enough, the Federal Reserve "earns" the "paltry" 6% per
year on their dollars.
Now, this does not seem like such a tremendous insight, but
Over 2000 years, one dollar at 6% interest will grow to
(or one ounce of gold will grow to that many ounces at 6% in 2000
years!) See why usury is forbidden?
I think that's about 4 x 10 to the 49th power! Such staggering
numbers can only be comprehended when contemplating all the atoms in
the entire universe! The point is that you certainly cannot own
that number of ounces of gold, it's just impossible! But what are
the implications of this?
Therefore, I began to think, and think really hard! Should it be
impossible to earn more than 6% per year consistently? Yes, that
is exactly the implication! But wait! It's only impossible
to do "consistently", and only impossible at the very top of the growth
curve at the huge sizes! So, there's more to it than that!
For a few days, I mistakenly thought it would be impossible to expect
growth of more than 6% per year, no matter how much money you have, but
that's just not true at all!
It is not wrong to earn or grow more than 6% per year! You should
expect to grow far beyond that if you are a small business, or small
investor! For example, a
kid should be able to buy a can of
soda pop at a discount store for 25 cents, and sell it later that same
a classmate for 50 cents to a dollar and earn a whopping 100% to 300%
return in a day! You
can grow fast when you are small! It's much harder to grow when
large! (Try convincing the kid to carry 12 soda cans, and to work
to sell 12 cans a day, and it becomes a real chore to grow that 100%,
and earn $3!)
Two more examples showing that rapid growth is good: First, a
fertilized egg cell will grow at a fantastic exponential growth rate,
as the cells continually divide into two, very rapidly at first.
And second, God said to "be fruitful, and to multiply" in Genesis.
You just can't keep growing at 6% when you get to a monster size, there is an upper limit to growth!
Now, when I realized this concept, that fast growth can only occur
when you are talking about small money, and that when talking about
extremely large money, you can only grow at 2% per year or less, I
realized that there are tremendous misunderstandings and
lies being told about the kind of growth rates the average investor can
expect! The professional
money managers on TV will often say that you, the small investor, will
be lucky to grow your wealth beyond 10% or 20% per year! Nothing
could be further from the truth! The small investor is the most
able to grow, and should be able to expect growth of perhaps more than
100% per year! I'm doing much better than that, and I'm a rather
large investor! It is the supremely large investors who have a
much harder time growing!
Now, to teach yourself how compounding interest rates work, open an
Excel spreadsheet. Name a box, for example, the C2 box,
"rate". Do that by clicking on "insert" at the top, then "name",
then "define". Name it "rate". In that box, you will put
1.06 to reflect a 6% rate, or 1.1 to represent a 10% rate, or whatever
you wish. In a new column, starting at A1 or B1, enter a 1, the
number that will be compounded. Below that box, in A2 or B2,
enter the following equation at the top in the blank space called
"formula bar": =(A1)*(rate) You have to put in the equal
sign to make it work. Next, highlight the second box. Next,
put the cursor over the lower corner of the second box, until it turns
into a small "plus" sign. Next, drag the cursor lower, perhaps
200 or 2000 boxes lower. It should create automatically a whole
list of compounding numbers that grow ever larger. For example,
box 3 should be =(A2)*(rate), box 4 should be =(A3)*(rate), and so on.
To see the full numbers, you will need to expand the column
wider by clicking and dragging the line between the A and B columns at
If you set this up in an Excel spreadsheet, you will have a handy way of seeing how your own
portfolio may grow over time if you earn a 50% annual return, or 200%
annual return by investing in silver stocks, which I think is rather
conservative, given how small the entire sector is right now, at only
about $8 billion dollars total!
Now, here are some really startling facts about interest rates!
Consider human growth rates, and the population of the earth! Do
the math using the spreadsheet, as I've shown you. How low does
the rate have to go in order to get about 6 billion people at the 6000
year mark? Change the rate until "year 6000" is about 6 billion
people, and start with 2. What is the rate? The "rate" is
0.365, less than 1%. Creationists use this to show that humans
have not been evolving over millions of years, and goes to show that
modern man was created about 6000 years ago, as the Bible states.
Now the evolutionists will point out that this means nothing, because
human populations are sometimes wiped out (just like investment gains
sometimes are lost). I will counter that human populations rarely
decline, and they do so typically only when civilizations end, which
tend to happen when people stop using gold as money, and when
enslavement through usury runs to excess!
Now, why did I discuss human growth rates? Because they are
strikingly similar to gold growth rates! There are about 4.8
billion ounces of gold in the world that have been mined in all of
human history! The amount of gold in the world, per person in the
world remains remarkably constant at about .75 ounces per person.
This does not mean there is "not enough gold" it means there is not
enough gold AT TODAY'S PRICES!
Also, therefore, it is next to impossible to grow real wealth, in real
terms, (gold), more than .0365% if you owned, for example, over half of
all the gold in the world. This goes to show how dangerous it is
to allow at law, or guarantee with collateral, any interest rate
whatsoever for those individuals who own nearly the entire world!
The point of all of these "growth rate" exercises is to show that
tremendous portfolio growth happens greatest when much smaller amounts
of money are involved! And therefore, it is extremely good that
the size of the silver market is so small. In fact, these
exercises help to prove that the massive exponential growth rates we've
already seen, an average of 314% gain in the silver stocks for 2003, in a
market that is now about $8 billion, and is real money, will likely continue for
quite some time.
And speaking of big money, bonds and the housing market, both are set
for a fall. Too bad they can't grow a tree to the moon!
So, these interest rate exercises show why the housing market, a $20-30 trillion market?, is
supremely overvalued, and cannot continue to grow at recent growth
And this finally brings me to the news on Freddie Mac and Fannie
May. I think the "accounting irregularities" are only the tip of
the iceberg. I believe the true scandal will prove to be worse
than Enron. They have interest rate derivatives that are sensitive to
changing rates and counter-party risk such as people walking away from
their home mortgages? That's not a sound business plan!
Looks like the dollar is headed for a big fall, as the bond market has
no buyers, and Bill Gross, the most important bond manager in the
world, has been bearish on bonds for a while now, but he is putting
forth a greater warning now. Also, there is news that the bankers
want to devalue the dollar another 20%, which would take the gold price
to $500 to $550 quick.
Thu September 09, 2004 02:12 PM ET
By Wayne Cole
NEW YORK (Reuters) - Treasuries prices turned lower in choppy trade on
Thursday as an auction of U.S. government debt drew almost no private
demand, leaving the dealer community holding a pile of paper.
"It was an extremely ugly auction. And that's something nobody wants to
see, not the Street and certainly not Treasury given the amount of
borrowing they have to do," said Sadakichi Robbins, head of global
fixed-income trading at Bank Julius Baer
The sale of $9 billion in reopened 10-year Treasury notes went at a
high yield of 4.195 percent, well above expectations, and drew bids for
only 2.12 times the amount on offer, down from August's 2.90 level.
Indirect bidders, including customers of primary dealers and foreign
central banks, picked up only 2.8 percent of the issue. That compares
to 54 percent in the original sale of the notes and 38 percent at the
----- Do you have any idea what that
They tried to sell $9 billion worth of bonds, and only sold $250
million worth of them to "indirect bidders" which is the general
public! I could raise $250 million for the silver stock mining
in a heartbeat if I had a large enough audience to tell the story
to! Give me about an hour on CNBC, and I'll raise a billion!
But I predicted exactly this, that
they would not be able to sell bonds, which will be a disaster since
they have a $600 billion deficit to finance! I said, "How can they
sell bonds, when they have been buying bonds to prop up the bond
market, and keep interest rates low?" So, this is exactly why interest
rates will be rising, and why the value of the dollar will be going
down, and gold will be going up.
Next, Bill Gross, who is probably the
most important bond manager in the U.S., who has been bearish on bonds for a while now, is now very bearish on bonds!
Warning to bondholders (usurers) that they will NOT get what they think
is coming to them (a real return). Instead, they will be receiving
much less, and the usurers will get what they deserve!
As reported by lemetropolecafe.com
(which is why I'm a subscriber, and suggest you subscribe, too, or at
least sign up for the two week trial) Bill Murphy wrote of Bill Gross:
Bond guru Bill Gross of Pimco came out with his October 2004 outlook and it
created quite the stir. Titled "Haute Con Job" he sounds a bit like some
of us in the GATA camp, except he just can’t bring himself to calling a "spade a
"Deceptive hedonic/substitution adjustments also serve a government
burdened not only with hundreds of billions of annual deficits as far
as the eye can see, but ladened with a demographically aging U.S.
workforce rapidly approaching Social Security time. By fudging on inflation,
they pay less and the amount could cumulatively run into the hundreds
of billions over the next few decades. They disserve, of course, all of
those who receive social security, as well as other private pensioners
dependent on an accurate accounting of prices paid. They
disserve buyers and holders of TIPS – inflation protected securities –
which adjust inadequately to a faulty and near fraudulently calculated
CPI that one day could total billions of dollars per year for TIPS holders. And they disserve all owners of U.S. Treasury obligations
– including foreign central banks and institutions – who mistakenly
assume that they are earning a real return over and above inflation,
and that the dollar upon which they are denominated is justifiably
strong because of GDP growth and productivity numbers that are pumped
by hedonic magic to resemble the Arnold Schwarzenegger of 1980 instead
of his verbal “girlie man” analogy of today."
"No I cannot sit quietly on this one, nor as I’ve mentioned, have other
notables in the past few years. The CPI as calculated may not be a conspiracy
but it’s definitely a con job foisted on an unwitting public by government
officials who choose to look the other way or who convince themselves that they
are fostering some logical adjustment in a New Age Economy dependent on the
markets and not the marketplace for its survival. If the CPI is so low and
therefore real wages in the black, tell me why U.S. consumers are resorting to
hundreds of billions in home equity takeouts to keep consumption above the line.
If real GDP growth is so high, tell me why this economy hasn’t created any jobs
over the past four years. High productivity? Nonsense, in part – statistical,
hedonically created nonsense. My sense is that the CPI is really 1% higher than
official figures and that real GDP is 1% less. You are witnessing a "haute con
job" and one day those gorgeous statistics just like those gorgeous models, will
lose their makeup, add a few pounds and wind up resembling a middle-aged Mom in
a cotton skirt with better things to do than to chase the latest fad or
ephemeral fashion. If those Moms are holders of government bonds based upon a
benign outlook for inflation, they had better cash some of them in, especially
at today’s 4.0% yield for 10-year Treasuries."
Now, Bill Gross's "sense" is
that real inflation is 1% higher than they say. However, if you
count in all the things they exclude, such as food, energy, medical,
housing, education, and adjust based on the average of what people
spend on these things, I strongly suspect that inflation is running
along at about 8-10%! About 6 months ago, I read an article that
calculated the price increases on everything that people spend their
money on, and in the proportion that they spend it, and inflation was
running at 7% or so.
COMING NEXT, the 20% dollar devaluation (planned inflation!)!
UK Paper Says Pressure Grows On G7 To Agree to U.S. Dollar Devaluation By Neal Keane - Dow Jones Newswires - Sunday, September 26, 2004 LONDON -- U.S. President George Bush
is being urged to signal a dollar devaluation of up to 20 percent to
rebalance the global economy ahead of Friday's Group of Seven and
International Monetary Fund meetings in Washington, the U.K.'s The
Business newspaper reported.Senior U.S. administration officials in
Washington have over the past few days tried to influence the White
House and U.S. Treasury to put pressure on the G7 to agree to a dollar
depreciation in its final statement, the newspaper said.Recent data
have shown the U.S. current account and trade deficits running at
record levels, and economists have said a dollar depreciation is needed
to rein these in. The euro was quoted at $1.2260 in late New York trade
Friday, compared with $1.2273 on Thursday. The dollar was fetching 110.64 yen
versus 110.63 yen, and 1.2624 Swiss francs versus 1.2598. The pound was
trading at $1.8041, up from $1.7982. The G7 will also call on the
world's oil producers to take further action to bring down prices, The
Sunday Times reported. Crude oil reached almost $49 a barrel in New
York Friday, amid continued concerns that high energy costs will sap
global growth. Spurring economic growth will be high on the agenda at
the meetings of G7 finance ministers and central bankers next week,
U.S. Treasury Secretary John Snow said Friday. "The promotion of
economic freedom, opportunity and growth throughout the world will be a
key topic," he said in a statement in New York City. G7 officials
meeting in Washington next week will be representing Canada, Italy,
France, Germany, Japan, the U.K. and the U.S. Officials from China will
also be present. By Neil Keane; Dow Jones Newswires; +44-20-7842-9495;
At the Silver Summit I saw a movie presented by David Morgan
on the failure of LTCM. The hope of the geniuses at LTCM was to
"eliminate risk" through taking two opposite derivative positions, and
learning how to put an accurate price on the said derivatives or
options, that other traders might not know how to price as accurately,
and thus, earn the difference! But they were thinking of
eliminating the risk of volatility, or eliminating the risk of
positions going down, and they forgot about eliminating or reducing the
risk of counter-party default! The only thing that cannot
"default" on you is real payment in full -- real gold and real silver
bullion. To eliminate the risk of not getting paid, you have to
have already received payment in full, in advance! And even that
can "default" if it is destroyed through war or a natural disaster, or
lost, or stolen!
This brings me once again an occasion to mention my essay, The Moral Failures of the Paper Longs - 22 January 2003.
Those people who think they can win by betting on derivatives, futures
contracts, or options, are forgetting completely about the dangers of
counter-party risk! They also forget the two essential features of
gold that make gold and silver so valuable. First, real gold and
silver do not expire! They last over time! Second, gold and
silver are payment in full! Paper promises are not!
Gold and silver are also so valuable because they are limited!
You cannot grow piles of gold and silver to the sky at 6%
forever! There is an upper limit to gold and silver
accumulation--limited to no larger than the number of ounces that the
human race has accumulated up to now, which is about 150,000 tonnes or
about 5 billion ounces. (Plus the 1.6% per year of about 2500
ounces of gold that is mined each year.) And these days, the
enormous piles of paper money that exist in the world will serve as a
reminder that the rule "first come, first served" is true in a world of
limited resources, and unlimited paper money.
Next, where do you get silver bullion? I have found only about 5
bullion dealers in the U.S. that may have over 100,000 ounces of silver
bullion available, listed here.
JM, the largest refinery, and perhaps a few others, and that's
it. I researched this, and called about 10-15 bullion dealers to
locate these "top 5", because of my own portfolio needs. My next
bullion order may be about as large, and I wanted to know, in advance,
where I could get that much silver. Therefore, I know the bullion
market is very tight, and very small! I believe delivery defaults
are coming. They are already here if you consider delays and
limits as defaults!
There is one dealer that I'd like to discuss, NorthWest Territorial Mint.
I believe they are the largest mint in the US that is making the 1-oz.
silver "rounds", which are just a one ounce silver piece. They
therefore also have the lowest price, about 45 cents over spot in large
NWTM flew me out personally to view their mint. They are a large
mint, and were in the process of expanding their bullion department,
with ongoing construction for about 4 more desks for the bullion
department. They employ about 50 people at the mint, and mostly
make money from minting commemorative brass medallions. They had 4
people in the art department who paint and colorize coins. They
have about 5-6 people in the marketing and PR departments. They
have several people in the computer department. They have a huge
industrial floor filled with refining and minting equipment. The
day I visited and toured their mint, they were refining and minting
about 50,000 ounces of silver bullion, melting down the silver, and
minting silver rounds.
NWTM also this week just sent me a check for $1000 for estimated
"commissions", since I have linked to them at my websites, and have
been discussing them in this commentary.
At the Silver Summit, I mentioned my concerns about delivery delays,
and I have been forwarding a few complaints directly to Ross Hansen,
the owner and operator of the Mint. In the audience at my speech,
a man I trust said he recently ordered 90% silver bullion, which
arrived in about two weeks, which is just fine.
Now, I suspect that the longer delays are coming when people order
rounds. I believe that NWTM is taking people's money, using it to
place an order for silver from other dealers, which may take a while to
arrive, and then they have to mint it into rounds. This is a
process, since they probably do not have a huge inventory of silver
rounds at the moment of high demand. Also, I suspect that many
people are sending personal checks in the mail, which there is and
additional 10 day hold time due to default risk from check fraud.
And this adds about 2 weeks
to the order in many cases, that several people may be forgetting to
To find bullion in large quantities often takes a while, even if you
were to order from COMEX, which is the location of last resort and the
highest price. Other dealers or refineries often will sell excess
bullion to other dealers like the NWTM, because it's a better price
than shipping silver to the COMEX, but probably only in limited
NWTM had about a million dollars worth of inventory in the form of
palladium one-oz. bars. Ross indicated to me that inventory is
often in different forms in the bullion business. You may have
mostly 100 oz. bars, and the customer wants only rounds, or you may
have mostly rounds, and the customer only wants 100 oz. bars. Or
you may have only 15 bags of 90%, and the customer wants 25 bags!
NWTM appears to have a communication problem right now, and perhaps an
inventory problem with 1 oz. silver rounds. They should be
indicating to customers at the time of the order about how long it may
Now, if I were a bullion dealer, which I'm not, I would have two
prices. The lower price, about 1-3% over the bullion price, would
be if the customer would bear the default risk, and if I would use
their money to buy silver bullion for them, and act as their
broker. That kind of order, naturally, would take longer to fill,
and default would depend on the reliability of a third party. The
higher price, about 10% over the bullion price, would be if I, as a
dealer were to bear the default risk, as I would sell bullion from out
of my own existing inventory, and act as a dealer (not a broker).
I would be bearing the default and price risk as I would have to order
more bullion for myself, which I may or may not receive from the third
party. A customer, when ordering, should make sure which way the
dealer is going to act; whether as a dealer and selling out of existing
inventory, or as a broker and buying from another dealer.
It sounds complex, but it's really rather simple, and this system is
what keeps prices fairly even across many dealers in the nation, and is
why even one large order can move prices up worldwide.
Here is an outstanding guest commentary on silver:
Want a Time Machine?
I love the thought of beginning to build some family wealth that
can be passed down through generations. Each generation should protect
and build on their families wealth, unselfishly and in appreciation and
respect for the efforts and sacrifices of those that have gone before
them. I like the idea of passing down 10% of my life's earnings. And
teach my children to build that wealth for future generations and
purposes bigger than their own desires. Remember, income is stolen
through taxation and inflation, wealth is not.
BUT I am so very blessed because I can do a lot BETTER than
that. Not only can I leave 10% of my life's earning I can make up for
several past generations that didn't get in on all the fun. I fully
intend to leave many generations of wealth for my family. In fact I
already have it for them, it was very easy to acquire and it is
completely tax free.
You see there is a form of wealth that has been transported
through time at such a huge discount that you can replace your
Grandfathers life savings and his fathers before him and many fathers
before that with just a few weeks of work. A time machine that
gives 100 years wealth for 1 years work.
What makes it sweet justice, is the system that has destroyed
honest money, and has put the working man between the twin grind wheels
of taxation and inflation, is the system that gives us this opportunity.
Money as we know it today is nothing but a ponzi scheme, where an
ever increasing amount of worthlessness is exchanged for goods and
services. To make this possible it was necessary to "get rid of" honest
money. After all, there is no such thing as an honest ponzi scheme. So,
get rid of it they did, no longer is paper money kept honest with gold
or silver backing.
For many, many generations honest men earned an honest days wage of
from 1/4 to 1 ounce of silver. And in a free economy with an honest
money, you would never have to make any more than that because the
natural force of deflation, caused by ever increasing productivity
would make products cheaper all the time, your quality of life would
continually get better because your money would continually be more
BUT WAIT if honest money should continually be worth more, how
much is that 1 ounce of silver your Grandfather earned worth today. I
know that farmers are hundreds of times more productive than they were
in days gone by. So are transporters. So are construction crews. So are
manufacturers. I would think that a man today produces way more
than twice what our grandfathers did. What this means is that if we
worked for half (or less) of our grandfather's pay we should have an
equal living standard. Prices would have been cut in half (or
more) because of our increased performance. Therefore if our
economy were free and our money honest a days wage today could be 1/8
TO 1/2 OUNCE OF SILVER (or less).
Oh yeah, the time machine. A man works about 40 years. To pass
down 10% of his life's earning to his children he needs to save 4 years
of income. Figuring 250 workdays a year, each generation should pass
down 1000 days worth of work. Well, using the high end of the scale of
1/2 ounce of silver per work day, each generation should add 500 ounces
of silver to the family wealth. I intend to leave my entire net worth
in the form of silver to my children, this will be several tens of
thousands of ounces representing at least a thousand years of savings.
So there you have it, a thousand years for one life time.
Tom's commentary to friends and family received one reply:
Hi dad - what is an ounce of silver worth today compared to what it was worth 20 years ago?
And Tom's reply:
Ahhh My young, sweet little lad, your time frame is soooo short.
You see, 20 years ago civilization was still, for the first time in the
history of mankind, living in a world where all the moneychangers
(central banks) were undisciplined by the chains of gold and silver,
just as we are today. Your question has several answers, I am assuming
that your frame of reference is "Dollars". It is very difficult to
divorce oneself from a dollar reference that is so pervasive yet so
dishonest. When a person values an item in dollars just the fact that a
time frame is necessary for the value to have meaning. proves. that in
fact. it has no meaning at all. An item that cost $1 in 1910 was very
expensive an item that cost $1 today is very cheap!! No one except the
very very rich could have shopped at the 99 cent store in 1900. Yet it
is not wealth and value that is changing it is the dollar!!
An ounce of Silver is "Worth" between one and two days labor.
Nobody, not even money printers, can take the labor of generations and
make it disappear. This world was built with men working for 1/2 ounce
of silver a day. And because men are becoming more efficient all the
time silver is becoming more valuable all the time. This is why there
is no need to derive interest when holding silver or gold, it is its
Your entire life has been spent in an economic "time warp". Nature
has a way of cleansing herself and righting the ship. It is this
righting of the ship that I believe is beginning at this time. Part of
the warp, is a depression of the gold and silver price to give the
appearance that paper money has more value than it does, a sort of
confidence game. This allows for the opportunity that I see.
OH by the way 600 years ago silver was worth 700 "DOLLARS". But of
course at that time there was no such thing as a PAPER dollar.
By historical standards I am filthy rich, by today's standards mankind has filthy money.
In the press release, they write as if
they expect to see silver prices higher than $8.25/oz. "The options
[for outgoing president Leonard Kaplan] will vest on the earlier of the
third-year anniversary of the requisite shareholder approval or the
consecutive day the silver closing price exceeds $8.25 per ounce."
They also boast that they have $400 million in cash and equities, and
that they expect to produce 27 million ounces of silver per year once
they put their Bolivian exploration property into production.
Wouldn't you think that they would take care to make sure silver
rose, and stayed there, before initiating such a huge production
decision? Especially in light of the fact that energy costs have
faster than silver prices? Shouldn't they wait until after silver
prices rise higher than energy costs? These seem to be rather
questions. And since they will be waiting anyway, as they have
that they plan to produce no sooner than 2007, it seems unbelievably
ridiculous that they continue to hold cash instead of silver bullion in
the meantime! They are going to wait more than 2 years, or even 3
sit in cash all that time as they expect the silver price to
rise! What are they thinking? More than likely, they not
thinking! Apex alone has enough cash to clean out the
COMEX! Here is proof:
45.3 mil oz. of silver is in the registered category, available for
delivery against futures contracts. x $6.90/oz. = $312 million
dollars! Less than the cash of Apex silver! But no, Apex will
probably watch the silver price continue to rise, while the value of
their cash is continually destroyed. I spoke with Igor Leventhal
(investor relations of Apex) about this at two gold shows now, and he
is firmly opposed to buying silver bullion, with not a single rational
explanation available. Apex mostly has institutional investors, who
probably could care less about maximizing shareholder's dollars, the
institutions probably just want to "park" a miniscule bit of their
funds into what they think is a "leveraged silver play". But the cost
of Apex's silver ounces in the ground, as astute readers of this silver
stock report know, are among the highest available! Investors will get
what they deserve, don't they? And this also goes to show why it is so
difficult for those people with "tons of money" in the multiple
billions of dollars to actually get 200% returns!
Here are a few GREAT recent essays, in case you missed them:
The Hommelburg essay is OUTSTANDING! It presents exactly why the
junior stocks are among the best investments right now. In sum,
the majors have stopped exploring since about 1996 as the gold price
dropped, threatening their continued solvency. Then on top of the
bad news of the low gold prices, as gold prices recovered, the majors
discovered the pain of hedging and locking in a price for gold that
ends up being lower than the rising market price! So, as gold
prices rose, the majors have continued to struggle for survival, and
have continued their neglect of exploration, for nearly 8 years
now! Their neglect is now our opportunity!
Comment: For the last twenty years silver has spent most of the
time trading between $4.25 and $6.50 per ounce, well below the record
$50.00 it hit when the Bunker-Hunts tried to corner the market in 1980.
This March prices spiked dramatically higher on the break above $6.75,
to $8.43, then retreating even more quickly from the most overbought
situation since 1987. They based against $5.35 in May, the mean of the
last twenty years, and are re-testing important long term resistance
between $6.50 and $7.00. This time around silver is not as overbought,
bullish momentum is strong, and there is a clear desire to build long
positions. A monthly close above $6.80 or a weekly close above $7.00
could set off yet another very dramatic rally to the $8.50/$9.00 area.
A weekly close below $5.25 would force us to review.
Strategy: Buy at $6.20/$6.00, adding to $5.75; stop below
$5.20. Add to longs on a monthly close above $6.80 and on a weekly
close above $7.00. Medium term target $8.00 and probably $9.00/$9.50 if
enough momentum builds.
By the way, base metal prices for zinc and copper have hit new highs in
quite some time this week. Zinc is up to .49/lb from about .45 a
few weeks before and Copper is at $1.41/lb. from about $1.20-$1.30 a
few weeks earlier. This will drive interest and buying into many
of the silver/zinc and silver/copper companies on this list--that may
help to push up share prices next week. See http://www.metalprices.com/
This month, I've done more trading than usual,
and I've bought 6 silver
stocks. Although you can note which stocks I've bought if you've
been paying close attention to the free reports, you don't know how
much of each I've been buying. But if you buy the look at my
portfolio, you can see which stocks I've been accumulating the most
of--in case you find that additional bit of information helpful.
People always want to know about my recent buys. And why?
Because they represent the accumulation of knowledge of silver
stocks that I possess, and it is thus a good summary of my trading experience,
which has now proved to be quite good. If you have not bought the
look at my portfolio, or if you bought it only once before, this is a
good month to take another look, or begin an annual subscription.
I just updated the "look at my portfolio" last night, on Sept. 30th, so subscribers can log on, and see the changes.
Now, I just discovered something, that I realized that I should
probably promote. My top three holdings have outperformed all my
other holdings by far! The gains, as of Sept 30th, since I bought
the stocks, are as follows:
My #1 holding: up 346% since January, 2004, is my second best pick!
My #2 holding: up 401% since December, 2003 is my best pick!
My #3 holding: up 221% since December, 2003 is my third best pick!
So, I realized... and wrote to my paying subscribers...
That's a wonderful track record, especially since I
bought all three less than a year ago, around the start of the
year! But it's even more spectacular when you consider 2004 was a
"down year" for the precious metals and silver stocks so far.
Prices since Jan., 2004, for silver stocks in general are down 5% for
2004, and there is not a single silver stock on my list of over 100
that has outperformed my top three... deals. It
just now hit me how blessed I've been by God and by my readers who have
helped me to find these opportunities. Only two other stocks came
close, and that is Endeavour Silver and Portal Del Oro, each up about
130% since Jan 2004. I don't know if my picks today on the open
market will match the performance of these top three private placement
deals, but I expect that a few may do so, and just look at what I've
been buying lately!
Furthermore, I've only written a "feature article" on one of the
companies. I have not even written a special article on the other
two! And I'm a promoter! How neglectful of me!
So, why haven't I promoted the other two companies harder, or even the
performance, in the past year? I don't know. I make perhaps
two orders of magnitude more money from the performance of the
portfolio than I make from people signing up to look at it.
And I suppose I like a little privacy, after all, private property
requires privacy. I primarily offer this thing you can buy
because so many people hit me up for specific stock tips, and this is
the most fair way to do it. Also, it helps to pay the webmaster
teams, and it is a source of "sustainable organic growth" that helps
pay for other promotions.
To read about my religious views, see my other web site, 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. See Ezekiel 38. Also, see my essay: Biblical
Guidelines for Managing your Money
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
ones that came my way. If you believe I may have an edge based on
my work and unique position... then the best way for me to share this with you
is to is tell you more precisely 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. It includes which stocks are 9% and more of my portfolio, those between 9% and 6%, under 6%, under 3%, and under 1%. I have two web sites, and two different customer support teams. If
you have any questions about
billing or order fulfillment, you need to contact the appropriate
support staff team, and
not me. I manage a large portfolio, create this weekly report,
handle private placements, do radio interviews, web marketing, go to the gym, try to live a life, and I
don't have time to
process billing requests. I don't bill any cards anyway, and I can't check or fix your order status. My
support staff handles all of that.
Private Placement Opportunities for Sophisticated/Accredited investors: (This is not a solicitation for any stock, and I'm not
brokering any securities) To be added to my PP email list, sign up here: http://www.goldismoney.com/subscription-pp.php
I will be speaking in Idaho at the Silver Summit in September 23-24 Specifically: Thursday, Sept 23rd at 10:00AM, for one hour (maybe more) planned to be in the Idaho Room, North
(No extra cost, no pre-registration. I don't do futures
contracts! So, it's first come, first served--like silver itself,
and like private placements. Get there early if you think it will
be busy. I can't tell what kind of crowd there will be.
When I spoke in Vancouver in June, about 10-15 people had to stand.) http://www.silverminers.org/summit/index.html
1. Richard Greene, thundercapital.com $100,000 minimum, 2 year hold, sophisticated/accredited investors only. Will use margin, and/or short sell.
2. Philip Judge or Simon Heapes, anglofareast.com Less than $5000 minimum? No margin or shortselling.
------------------- 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
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.
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
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 SILVER) And PAAS (Pan American) is now thinking about it.
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/
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
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.
& government stockpiles.
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
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
time. These figures are conservative, because I see no reason
M3 should be valued more than the gold the U.S. actually holds, which
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
The silver:gold ratio is also a very, very vague guess, reflective of
demand chasing silver, which is more scarce than gold in above ground,
form. I have no idea when the ratio of 15:1 will be exceeded, I'm just
guessing. I suppose it could happen this year or next month for
I know. Of course my real price targets are infinity dollars per
for both gold and silver when all is said and done, I just don't know
long that will take, nor what year it will be. But my point in
the price predictions is to show my bullishness for silver and gold.
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
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.
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
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
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
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,
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
To scare away investors--that is the entire reason gold and silver
are manipulated in the first place. Only the trend investors can
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
tomorrow, and the price would be well over $20-50/oz. But don't
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 $200,000,000,000,000: Estimated total derivative exposure of all banks in the entire world. (20 x U.S. GDP) $75,000,000,000,000: U.S. Govt. unfunded liabilities; social security, etc.
$45,153,000,000,000: U.S. Household wealth,
as of first quarter, 2004. (Includes Real Estate, and investments)
World bond market, yr end, '01: http://tinyurl.com/vr7u
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
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
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
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 60 times
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 60 x
10, You will see that bonds and currency are overvalued relative
to select silver stocks by a factor of 154,800 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 154,800 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.
"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
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
any cash or money market or bonds in his portfolio for any reasonable
of time, except for when selling one silver stock to raise the cash for
silver stock, or for when you need to raise the cash to buy silver, or
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
1 oz. of gold. The fund is fairly liquid, you can buy it as
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. Canadian
Zinc, Sterling Mining, IMA Resources, and perhaps Mines Management and
Cardero are probably the best five
candidates. These all have market caps ranging close to $50-$100
million dollars or more, and are more liquid than many others. (I
used to recommend PAAS and SSRI for this kind of "liquid alternative",
but they are no longer relatively cheap, and the others have now
increased in liquidity, and are now much more suitable for this kind of
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
when we have been experiencing hyperinflation for the past two and a
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
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
it happening, which, if it does happen, your contracts will be
on! Amazingly blind idiots. Wake up!
How bullish am I on silver? Here's an interesting way to put it: "60 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
to gold may be equal during a spike, when the market realizes that
refined silver is more rare than gold. Thus, silver may
gold by a factor of 60 times
better. Currently, the ratio is 60
of silver can buy one ounce of gold or 60:1.
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
How we can tell if silver is leading gold, or if gold is leading
silver? IE, which is going up more, faster than the other?
The way you can tell is by looking at the ratio. If the
silver:gold ratio is going up (say, from 60:1 to 80:1), then gold is
moving up faster (because it takes 5 more silver oz. to buy an oz. of
gold. If the ratio is going down (from 60:1 to 40:1), then silver
is moving up faster. So, keep an eye on the ratio.
A good web site 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
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
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
placements, or if outstanding warrants (and options) are exercised and
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,
these are often only estimates. The number can also change up or down,
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
securities that may not be in your best interest to buy. Some
houses are short physical metal, and thus, they may attempt to strongly
discourage you from buying precious metal or precious metals
I believe that the propaganda machine in support of frauds such as
and the dollar is so strong, that they may even believe what they say
they give bad advice to avoid the safety and protection of precious
It is most likely that they simply do not understand the precious
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
in the ground" estimates can be profitably mined at $5-6 per ounce
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
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
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
silver just as it begins to go up if they lock in a price which then
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
environmental risk. They can't franchise the business, are stuck in one
location, are subject to government confiscation, or taxes, or union
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
investment advisor. I'm just a private investor trying to make sense of
this crazy world, and sharing my information and thoughts on silver
Beware of scammers. 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
payoff. The Bible warns, "trust no man", yet at the same time
us to "cast our bread upon the waters", and to not issue "false
against others. Physical gold and silver provide the "payment in
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
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
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
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
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).
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
Now, "fully diluted shares" is the total number of shares, plus the
warrants, counting warrants as if they were all exercised and became
trading shares. I think "fully diluted shares" is a better number
use to calculate market cap than by using "outstanding shares" as most
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
(These first four companies, BHP, GMBXF.PK, KGHMand BVN produce a lot of
silver, but look to be way too expensive to buy for the silver exposure for
BHP Billiton Ltd (BHP) http://www.bhpbilliton.com/ firstname.lastname@example.org IR
--'produces 40 mil oz. silver
annually from one mine'
Additional comments: unfortunately, BHP has a 57 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
accrue as an increasing physical supply of physical silver. In
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
Silver Wheaton http://www.wheatonriver.com/index.php/str=9,mod=cnt,act=cnt,id=120 "Silver Wheaton will have approximately 724 million common shares outstanding"
$70 million Cdn financing at $.40 Cdn, with 1/2 warrants at .80 Cdn.
175 million units and 87.5 million warrants.
724 million shares outstanding + 87.5 mil warrants = 811.5 mil shares fully diluted.
@ $.40/share Cdn x .77 US/Cdn = $.308 US
$250 million MC.
Wheaton River has a market cap of 1.47
billion at $2.58/share. I have no idea of the quality of the
silver properties, but somewhere in the back of my head, I remember
removing WHT from my report when I discovered that about 10% of their
money came from the production of silver. As a gold
company, I have not listed them. For the market cap to be $250
million, with a $70 million Cdn private placement already done, there
is serious, serious, big-money demand for silver focused investments
out there in the world right now.
KGHM Polska Miedz http://www.kghm.pl/en/index.php email@example.com
--KGHM is the world`s sixth-largest coppper producer and second or third
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/ http://www.gmexico.com/Html/contactUs.htm
651,646,640 shares (2002 annual report)
$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
They produced 28.2 million
oz. of silver, worth $129 million, in 2002. (P. 5, annual
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 =
Compania de Minas Buenaventura SA
(BVN) http://www.buenaventura.com/ firstname.lastname@example.org (IR)
- Peru´s largest publicly traded pprecious metals company
--produces over 10 mil oz of
silver per year
--looks way too expensive for the silver alone: 2.7 Billion market cap. -------------- -------------- --------------
ABX (Barrick) http://www.barrick.com/ email@example.com (IR)
535 million shares outstanding(1 Q
$11,261 million Market Cap
5.5 million oz. / year gold production.
--production hedged out for 3 years worth of total production, 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 "unhedge".
--reportedly, they plan to deliver 1/3 of production to hedges, which
means they "might" 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
(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.")
$11,261 million Market Cap / 1710 mil oz. = $6.59/oz. silver
You may get "approx" 1.05 ounces in the ground for 1 oz.
silver's worth of stock, if
the silver and gold was not hedged--but 30 mil oz of silver may be 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
price of the precious metals has put other miners out of business,
which Barrick has acquired at low prices. If Barrick goes
to their hedges, and rising gold and silver prices, then perhaps
Barrick's many properties will, once again, be sold at distressed
Around the spring of 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
options on a notional 7 million ounces of silver with an average
exercise price of $5.76 per ounce. These options expire at
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, but that they just bought options or
futures that expired.
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,
(INDUSTL PENOLES) http://www.penoles.com.mx
397.5 mil shares outstanding (2003 annual, unchanged since 2001)
$1888 mil MC
419 proven and probable reserves of silver (from 2002 annual report
on web site)
$1888 mil MC / 419 oz. silver = $4.51/oz.
You get "approx" 1.53 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
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
The word late Feb. 2004 from ECU Mini, who reported to
lemetropolecafe.com, is that Penoles hedged silver at low prices. 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."
From 2003 annual statement, by Dec 31,
2003, Penoles hedged 1.5 million ounces of silver at $5.31/oz.
That looks to be a bad bet, but easily coverable for Penoles.
They bought an option to sell (put) 17 million ounces of silver at
4.94. Another bad bet. Totally wasted money, it appears to
me. They also have an option to buy 8.5 million ounces (call) at
$5.53. Not bad. Such hedging practices, win or lose, make
it more difficult for investors to know and guess the current
operational state of the company. Who knows whether Penoles will
lock in more silver, and take away the upside potential profitability
for shareholders, or even waste money on put options that will never be
Whether Penoles hedged an entire 2
years worth of production by Feb, 2004, I don't know, and remains to be
seen. Penoles also engages in hedging dollars in the foreign
exchane markets, further complicating matters.
77 million oz. silver refined by the metals division in 2003, and
1 mil oz. gold.
They probably refine almost all the silver that comes out of Mexico.
They produce about 48 mil oz. of silver from their mines 2003, 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 web site or in
the annual report. There
is no need for a Mexican company to comply with Canadian law,
43-101. When CDE recently complied with 43-101, they raised their
total numbers by about 30-50%?
Given the report in March, 2004, that Penoles has hedged silver for
two years, I expect silver bullion to continue to outperform IPOAF.PK
stock at these prices. CDE
(COEUR D'ALENE) http://www.coeur.com firstname.lastname@example.org (208) 769-8155 or (800) 624-2824
214 mil shares outstanding (June 2004) not fully diluted
$999 mil MC
"Current cash, cash equivalents and short-term investments stand at
approximately $252.7 million at January 31, 2004, giving effect to
$180 million offering of 1.25% Senior Convertible Notes due 2024, net
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.
(43-101 reporting increased the number from 189
mil to 279 mil oz. silver). Before, Cour only reported reserves.)
(Produced 14.2 mil oz. silver in latest fiscal year (early 2004)
$999 mil MC / 279 mil oz =
You get "approx" 1.93 ounces
in the ground for 1 oz. silver's worth of stock.
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.
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
share in 2002.
Why does CDE continue to mine and sell silver at a loss?
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
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.
There is one very important factor
that CDE investors need to consider, especially if they are hoping that
the stock will return to a historic price. CDE stock prices, in
my opinion, are highly unlikely to return to historic prices. And
why? Because of the recent massive dilution. At the end of
1999, there were 30 million shares out. Today, there are 214
million. You MUST take that information into account when looking
at a long-term historical price chart. For example, the price in
1996 was $20/share, but there were less than 30 million shares?
If so, then the market cap was $600 million ($20/share x 30 million
shares). Today, the market cap typically exceeds the previous
historic price of $20/share and $600 mil MC! $3.63/share x 214
mil shares = $777 mil MC, which shows that CDE is more expensive today
at $3.63/share ($777 mil MC) than it was at $20/share ($600 mil MC).
I expect silver bullion to continue to outperform CDE
stock at these prices.
SIL (APEX SILVER) http://www.apexsilver.com/ email@example.com
47.4 million shares outstanding (late May, 2004) (not fully diluted?)
(derived from share price & market cap, late May, 2004)
$1005 mil MC
cash on hand: ~ $390 million March
San Cristobal (Bolivia) (proven & probably reserves) 454 mil silver
(forecast capital costs for construction to total approximately $435
(Produced zero silver in 2002)
7.8 billion pounds of zinc, and 2.9 billion pounds of lead
$1005 mil MC / 454 mil oz = $2.21/oz.
You get "approx" 3.12 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."
"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
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.
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
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,
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
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.
FSR.TO FSLVF.PK (FIRST SILVER) http://www.firstsilver.com/ firstname.lastname@example.org (604)
602-9973 or (888) 377-6676
38.6 mil shares fully diluted (March 2004) @ $1.86/share Cdn x .79 US/Cdn = $1.47 US
$57 mil MC
From the Company's main page:
"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.)
(The company appears to mine about 2
million ounces of silver per year, so perhaps by mid 2004, that would
be 5 million ounces mined out from reserves and resources?) 42 - 5 = 37
12 + 30 = 42 mil oz.
$57 mil MC / 37 mil oz. = $1.53/oz.
You get "approx" 4.50 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,
1st Q, 2004, FSR.TO earned $1.45
million Cdn?, or 4 cents/share, ending a string of losses for the 6
quarters prior. The Company recorded a profit of $1.93
million or $0.05 per share for first half of 2004, as compared with a
loss of $0.28 million or $0.01 per share for same period in 2003.
"Total costs, net of gold credits,
were $4.92 per ounce of silver in the three months ending June 30,
2004, as compared to $5.90 per ounce of silver in the year earlier
period. Costs in 2003 were increased due to mill equipment breakdowns."
Produced 565,332 oz. silver for the quarter, and
1288 oz. gold.
First Silver is unhedged, and remain committed to remaining unhedged.
WTZ WTC.TO (WESTERN SILVER) (formerly Western Copper) http://www.westernsilvercorp.com email@example.com
Jay Oness Toll Free: 1-888-456-1112
43.3 mil shares fully diluted (July 2004)
$423 mil MC
(not actively mining)
$14 million Cdn cash in the till (2 mil + 12 mil financing) no debt
From the "SNC Lavalin Resource Calculation" March, 2003.
Indicated 158.8 mil oz. silver
Inferred 54.6 mil oz. silver
Total 213.4 oz. silver.
Total 1.94 oz. gold x 10 (at 10:1) = 19.4 silver equiv.
The capital cost to get the mine going is estimated to be US $148
Silver Completes Pre-Feasibility Study on Chile Colorado Zone at
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 likely double the numbers: probably in Jan will have 500 mil oz. silver, 5 mil oz gold.
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
Feasibility: 2006-7 production timeline.
$423 mil MC / 287 oz. = $1.47/oz.
$423 mil MC / 1000 oz. = $.42/oz. --exploration potential
You get "approx" 4.67 ounces
in the ground for 1 oz. silver's worth of stock.
Exploration Potential = 16
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
Western Silver was formerly Western Copper... Copper now at $1.35/lb!
Note the capital cost to get the mining started: $148 million
WTZ also has the following other metal resources:
3.73 billion pounds of zinc x .50/lb = $1865 million
673 million pounds of copper x $1.30/lb = $874 million
1.3 billion pounds of lead x .40/lb = $520 million
MFN MFL.TO (MINEFINDERS) http://www.minefinders.com/ firstname.lastname@example.org
39.1 mil shares fully diluted 1 Q 2004
$272 mil MC
Cash on hand, Fully Diluted: C$34 million
"over 3.5 mil ounces of gold resource and 160 mil ounces of silver"
silver conversion = 3.5 x 10 = 35 mil + 160 mil oz. silver = 195 mil
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%
"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."
$272 mil MC / 195 mil oz. = $1.40/oz.
You get "approx" 4.94 ounces
in the ground for 1 oz. silver.
Additional Comments: Ross
Beaty, CEO of PAAS called me, Sept 17th. For more on that, see my silver stock report #51.
I caught up with Ross Beaty in person at the Silver Summit in Coeur d'Alene last
week. I asked him if he would make a promise to remain debt free and unhedged, and I asked about the issue of
holding silver in preference to paper money. He said that
sometimes there is a "time and a place" for debt and hedging, and he
expressed several reasons to not hold silver bullion, saying that it
would not substantially increase the company's leverege to rising
bullion prices, since they already hold 850 million ounces in the
Personally, I beg to differ. If the company is only making 1%
profits on mining silver, then their expected profit if they mined
their entire 850 million ounce reserve is 8.5 million ounces (and that
gives them the benefit of the doubt, as if they were smart enough to
take such 1% profits in the form of silver bullion). In contrast,
invested $100 million of cash into silver bullion at $6.60/oz., they
could hold 15 million ounces. Therefore, it is clear that unless
the silver price substantially improves, then the market cap of PAAS is
clearly more than ten times overvalued!
Furthermore, bullion in hand creates liquidity and safety that every
person and company needs. Silver in the hand prevents defaults by
another. PAAS should know this! Handy and Harmon, a bullion
refiner went bankrupt about 5 years ago. They were holding some
silver bullion for PAAS, who then lost out as they could not recover the
bullion after the default.
The dollar can also default on it's holders, in several ways.
Banks can default, or the value of the dollar can be inflated away.
The most important reason for PAAS to hold their cash in the form of
silver bullion in their own possession is that they need to show by
example that silver is money, especially if they expect (or hope)
others will use silver as money. Silver verses paper is a
PAAS should not be the customers of the paper money bankers.
Could you imagine all of Microsoft's employees using another operating
system by a competitor, such as Unix or Linux on all of their own
computers? It is unthinkable. Yet somehow, PAAS produces
real money, silver, but instead of using silver as money, the company
prefers using paper cash as money, and refuses to take the lead and
use silver bullion as money. I think such actions are inexcusable
for a leading silver company such as PAAS, especially since their
shares are so overvalued!
In fact, when a company has shares that are overvalued, they should
start issuing stock! That's the best time, and the most
appropriate time to issue stock! PAAS should issue stock, raise
$100 million, and buy that much worth of silver bullion!
In a speech in Idaho, one reason that Ross Beaty gave with regard to
not buying bullion, is that he said it would be a one-time price boost
only of benefit to bullion holders, and that it would not help his
company. This is utterly ridiculous. A boost to the silver
price goes straight to improving the bottom line of a silver
producer! Furthermore, the action of buying and holding silver
bullion would be a wake up call to the entire investment community (not just the silver investment community) that
now is the time to invest in silver bullion. The action of
holding money in the form of silver bullion would certainly encorage
others to do the same, which would strongly boost the silver price much
more, as others would also buy silver bullion. As it is, other
silver companies are already realizing the truth that buying silver
bullion is a good idea. It's just a matter of when they buy.
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
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
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, excluding management expenses? 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 had a very meager profit of $1.3
million, second quarter, 2004. I certainly would not get excited
about paying nearly a billion dollars in market cap to get an annual
earnings of $5 million. That's a P/E ratio of 200!
The reason silver investors are
investing in companies such as PAAS is for the upside potential of
rising silver prices, and the leverage that silver stocks offer.
PAAS plans to produce 15 million
ounces of silver in 2005. Therefore, for every dollar the silver
price rises, (while other costs remain flat), PAAS expects to earn an
extra $15 million.
Doing the math on that, PAAS would need about an extra $100 million in annual
profits to get to a "reasonable" P/E ratio of 10. This would
require an additional rise in the price of silver by 100/15 or an extra
$6.66 per ounce to rise to about $13.33. And by then, I would
expect the price of PAAS to be fairly valued at a market cap of about
$1000 million, with a P/E of ten. In the meantime, however, you
could invest in silver bullion, and double your money.
Therefore, I think silver bullion may outperform PAAS shares. On
the other hand, if stock buyers bid PAAS up so that it has a P/E of
about 20 by the time silver is $13.33/oz., (if that happens by next
year, and is actually a reasonable expectation for a major) then PAAS and silver bullion may perform about the same.
GRS GAM.TO (GAMMON LAKE) http://www.gammonlake.com/ email@example.com
62 mil shares fully diluted (Feb 27th, 2004)
$375 mil MC
Total Ocampo NEW "1.85-million gold ounces and 76.7-million silver ounces in the
measured and indicated categories and a further 2.55-million gold ounces and
127.8-million silver ounces in the inferred category."
Inferred: 2.55 mil oz. gold, 127.8 mil oz. silver
Silver equiv = 25.5 mil oz. + 128 mil oz. = 153.5 mil oz.
Measured & Indicated: 1.85 mil oz. gold, 77 mil oz. silver
silver equiv = 18.5 mil oz. + 77 mil oz. = 95.5 mil oz.
Total silver equiv: 249 mil oz.
OLD DATA: 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,
Since Mexgold owns 185 mil oz. of "target exploration potential", 26.3%
of that is 48.6 mil oz.
249 + 49 = 298 mil oz. (231 oz. in report #49, last week)
$375 mil MC / 298 mil oz.= $1.26/oz.
You get "approx" 5.48 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".
"Overall, a total of 130,000-metres have been drilled in more
than 800 holes since the inception of the Gammon Lake Ocampo Project"
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
Additional comments: A one property company. The Carmen
gold-silver deposit on their Monterde property in the Sierra Madre belt
of Chihuahua State, Mexico. Lower grades than originally thought. "At
gold." 75 g/t silver, 1 g/t gold. The value of these grades by tonne, is as follows:
75 g/t silver x .03125g/oz = 2.34 oz/tonne x $6.70/oz. = $15.67/tonne
1 g/t gold x .03125g/oz = .031 oz/tonne x $415 = $12.97/tonne
Total = $28.64/tonne.
This project was once thought to have high grades. But today, the
grades are lower than the grades for Mines Management, which is a lot
cheaper (about $.30/oz. not $1.24/oz.) when considering cost per ounce
in the ground for shareholders. But Kimber is a silver/gold
property, and Mines Management is a silver/copper property, and that
might help to account for the difference in price. Also, Kimber
may be cheaper to start as an open pit project, whereas Mines
Management is underground and thus may have higher start up costs
proportionally. There certainly are a lot of factors to consider.
Clifton has a complex JV agreement with
Dumont Nickel. In sum, here is what Keith Moeller VP, Clifton
Mining Company wrote to me: "If Dumont produces a positive
feasibility study on an individual property piece, then they
gain a 50% interest in that piece alone, not in the rest of the
property. If they spend more than 5 million dollars (US) on any
one piece and they produce a positive feasibility study on that piece,
then they will gain
a 60% interest in that one piece of property, not in the rest. If they
stop at any time or fail to produce a positive feasibility, then they
will gain no interest in any of our property. Right now we have
around 7 different pieces of the property that have "Stand Alone" mine
Dumont stakes or purchases any property within five miles of the joint
property, then we automatically receive a 50% interest in that
My problem is how to quantify that. First, there is the range of
potential silver resources. Second,
there is the range of potential ownership, which is highly variable,
not subject to the entire property, nor necessarily subject to spending
by Dumont, but subject mostly to Dumont doing a positive feasibility
study on each of many properties . At the extreme ranges, the
40% to 100% of 105 = 42 - 105
40% to 100% of 1000 = 400 - 1000 mil oz. "exploration potential"
$47 mil MC / 42 mil oz. = $1.12/oz.
$47 mil MC / 1000 mil oz. = $.047/oz.
You get "approx" 6.16 ounces in
the ground for 1 oz. silver.
Exploration Potential: 146
Additional comments: Goldseek.com is hosting a "Meet the CEO" session with Dr. Friedman of
Clifton. If readers would like to send him some questions (open until Aug. 23), see:http://www.goldreview.com/MeetCEO/ask.php
Note the "exploration potential" is very
large, but it also assumes that their JV partner, Dumont, does not
acquire any interest in the property at all.
Perhaps an interesting and novel way
to determine percentage ownership of the projects would be to look at
the relative market caps for both Clifton, and Dumont, and then assume
that the market has it "about right", and then use thier relative
values to determine a possible percentage ownership of each. And
decide to own both, keeping your percentage ownership of each company,
about the same. For
example, if the MC of Clifton is $43 mil, and Dumont is about $10 mil,
so own about 4.3 times as much Clifton as Dumont.
JV agreements were primarily entered into during a time when it was
difficult to raise money through share offerings, as a way to advance
the projects. Unfortunately, JV agreements also make it difficult
for investors to value a company! Several companies at the NY
in June were just completing buyout agreements (or working on doing so)
with their JV partners.
For more info on what's going on with Clifton, see http://www.dumontnickel.com ,
JV partner. One man
suggested buying both Clifton and Dumont to ease the difficulty in
trying to figure out their JV agreement.
Clifton has 28% ownership of a biotech firm that makes a colloidal
silver. The biotech firm has a patent on a "super" colloidal
silver solution made with 10,000 volts that adds oxygen that gives it
more powerful antibacterial properties, and is safer since it uses less
silver, which would prevent
"blue skin" argyria. Normal colloidal silver that you can make at
home with 30 volts works to kill bacteria by disrupting the oxygen
of the cell wall, killing bacteria with oxygen. The market for
antibiotics is in the multi Billions of dollars.
You can now order the colloidal silver solution online at http://www.asapsolution.com
To receive 10% off, use 50105 as the coupon number.
ABL signs a
contract with GNC. (April)
Clifton's biofirm's colloidal silver product will be on the shelves of
this mass market health food and fitness stores, GNC.
Congratulations to Clifton!
(I own shares of CFTN.PK)
SSRI SSO.V (SILVER STANDARD
(604) 689-3856 or (888) 338-0046
mil shares fullly diluted (August 2004) --from the company web site.
$848 mil MC
debt free, cash: $Cdn 36 mil plus 2 million ounces of silver, plus securities. As of May 12: The
company has budgeted $8.2 million in 2004 for feasibility and scoping
studies and exploration of its 15 projects. With cash of $61
million, and marketable securities of approximately $10 million at
March 31, the
decided to invest approximately 20% of its cash and securities in
physical silver following the
decline in silver prices in April
and May. Silver Standard now owns over 1.95 million ounces of
silver. This silver is held on an allocated and segregated basis
and, consequently, is not available to be loaned. not mining or producing; 23 silver properties
measured and indicated resources totaling 403.6 million ounces of
plus inferred resources totaling 446.4 million ounces of silver = 850
2.2 mil oz. gold. Silver equiv = 22 mil oz. silver. (22 + 850 =
872 mil oz.)
$848 mil MC / 872 mil oz. = $.97/oz.
You get "approx" 7.09 ounces
in the ground for 1 oz. silver's worth of stock.
to SSRI for converting some of their cash, 20%, to silver
bullion! I wish it was more, but it is certainly a great
start! SSRI decided to hold such a
large percentage of their cash in the form of bullion, first, of all
SSRI now has more silver resources than PAAS.
I'd expect SSRI's market cap to soon exceed PAAS, especially given PAAS
management's lack of understanding that
silver is money, and can be used as money.
SSRI really is the "silver standard". SSRI has the largest market
cap this far down the list, which makes it a more attractive target for
people with larger amounts of money to invest. SSRI continues to
add resources through drilling and acquisition. This company
seems to really understand the silver story, and helped to educate me
as an investor.
I attended a two hour SSRI presentation after the Gold show in SF in
late November, 2003. For the most part, their properties are very
drilled, and they have a fairly solid idea on how much silver oz. in
the ground they have. They started their plan to acquire silver
properties and become a "silver company" in about 1993, which explains
why they have such a large market cap, and so many good properties with
so many ounces of silver.
Some investors like SSRI because of the diversification --SSRI owns
many silver properties. You can get a similar kind of
diversification by owning stock in many silver companies.
* TM.V TUMIF.OB (TUMI
RESOURCES) (TUY Frankfurt Exchange) (I
own shares) http://www.tumiresources.com firstname.lastname@example.org Nick
Nicolaas IR (604) 657 4058
24 mil shares fully diluted (Mar. 1, 2004)
@ $1.19/share Cdn x .79 US/Cdn = $.94 US
$23 mil MC
20 mil oz resource up to 50 million oz. silver potential but needs to
be explored and drilled.
500,000 gold resource x 10 = 5 mil oz. silver equiv.
Debt free, 2 projects in Mexico.
Raised $2.7 million Nov. 14, 2003
$23 mil MC / 25 mil oz. = $.90/oz. ***I'm using this number***
$23 mil MC / 50 mil oz. = $.46/oz. (exploration potential)
You get "approx" 7.66 ounces
in the ground for 1 oz. silver's worth of stock.
Exploration Potential: 15 (likely plus more after bonanza silver
discovery late November, 2003.)
Tumi soared in late November, 2003, after the company announced a bonanza
grade silver discovery after drilling. Final
drilling is winding up, and a resource calculation from all the recent
drilling is expected soon, sometime after final drilling results are
Tumi is focused on becoming a "premiere junior silver explorer."
It's good to see the focus is in the right metal. Doing active
drilling to prove up their projects and increase "resources".
Nick Nicolaas really understands the silver story, beliving silver has
much greater appreciation potential than gold.
I own shares of TM.V.
* PLE.V (PLEXMAR RESOURCES INC) (I own shares)
(now updated) email@example.com
Guy Bedard, President, Phone: (418) 658-6776 Fax: (418) 658-8605
two option agreements to acquire two exploration projects in Northern
Peru, Cascajal and Marilia.
67 mil shares fully diluted (August 2004) --Guy gave me this number (Sept, 2004)
@ $.155/share Cdn x .79 US/Cdn = $.12 US
$8 mil MC
$1.4 mil Cdn. money in the bank.
--just acquired (OPTIONS ON) 2 silver mines in Peru.
Total: 1.09 mil gold oz., 28.4 mil oz. silver
Total silver equiv: 38.4 mil oz. --I can't find these numbers on the
new website?! And I didn't realize the property acquisitions were
options, and not 100% owned acquisitions?!
Cascajal--Plexmar must pay to the owner $ 1 M US over a 5 year period
with a $ 500,000 US payment in the 5th year.
Cascajal--1,700,000 tonnes representing a total of 260,485 ounces
of gold and 13,446,000 ounces of silver. (not 43-101)
Recent financing was at $.25, with 7 mil warrants at $.40 Cdn
Still acquiring properties.
$8 mil MC (+ $5 mil in needed financings?) / 16 mil oz. = $.81/oz.
$8 mil MC (+ $5 mil in needed financings?) / 38.4(old number from web site) mil oz. = $.34/oz.
You get options on "approx" 8.49 ounces
in the ground for 1 oz. silver's worth of stock.
You get options on "approx" 20 ounces
in the ground for 1 oz. silver's worth of stock.
I own shares of PLE.V
ORM.V OREXF.PK (OREMEX RESOURCES) http://www.oremex.com/s/Home.asp firstname.lastname@example.org
28.8 mil shares fully diluted (End of May, 2004) after, and including
financing? @ $.99/share Cdn x .79 US/Cdn = $.78 US
$22 mil MC
Have $5 million cash in the bank as of Dec. 2003.
holds the right to acquire a 100% interest in six mineral properties in
Oremex will focus on the exploration and development of the Tejamen Silver Property and the San
Lucas Silver Property.
They are hoping to explore for up to 100 mil oz. silver by drilling
over the next year.
--Experienced team of geologists and mannagement that have put other
properties into production:
Anthony R. Harvey, Chariman, has put 14 properties into production in
his 40 year career.
for an inferred resource of 8.4 million metric tons at a grade of 89
g/t Silver (2.86 opt) and 0.2g/t Gold (0.006 opt).
2.86 x 8.4 = 24 mil oz. silver at Tejamen (one of six silver properties)
$22 mil MC / 24 mil oz. = $.94/oz.
$22 mil MC / 100 mil oz. = $.22/oz. --exploration potential
You get "approx" 7.35 ounces
in the ground for 1 oz. silver's worth of stock.
Exploration Potential: 31
I expect this latest drilling result will end up adding to their resources, but I don't have any idea how much. Oremex
Closes $2.6 Million Private Placement FinancingMay 28 "The Company issued a total of
2,890,023 units at $0.90 and
1,445,012 warrants exercisable at $1.10 for a period of 12 months from
closing. In addition, 269,940 Agents' Warrants were issued entitling
holder to purchase one unit at $0.90 for a period of 12 months."
* CZN.TO CZICF.PK (CANADIAN ZINC) (I own shares) http://www.canadianzinc.com/ email@example.com
78.5 mil shares fully diluted (August, 2004) @ $.77/share Cdn x .79 US/Cdn = $.61 US
$48 mil MC
$13 million cash, Cdn, no debt.
not mining ($20 mil needed to finish & start the mine) ($100 mil
worth of mining infrastructure in place!)
~70 mil oz. (IN ZONE 3 only!! of 12 zones! Their 18 year mine plan
consists of zone 3 only, but there are 12 mineralized zones on the
$48 mil MC / 70 mil oz. = $.68/oz.
You get "approx" 10.1 ounces
in the ground for 1 oz. silver's worth of stock.
I repurchased CZN recently because I
expected very positive drill results which I was hoping would
significantly impact the stock price. These were less than I
expected, and so I just sold half of the CZN I repurchased. But
CZN still has plenty of existing resources.
CZN has good profit
get the mine up and running, they might be able to pay back debt
financing within 2 years, but I would hope they would avoid debt, and
raise the capital in additional financings.
I note several very, very positive things about this company.
1. This was the mining operation set up by the Hunt brothers, the major
silver investors in the silver spike to $50/oz. in 1980 who were
bankrupted by their own debts and margin calls as a result of the COMEX
rule changes and silver short sale manipulation. The Hunts spent $50
million building infrastructure to build the mine. They were 90%
complete when bankruptcy hit. The value of those buildings is now perhaps over $100 million, and the
mine only needs
about $20 million (CAN) ($15 mil US) to get the mine up and running.
much cheaper than other cost estimates of other operations. 2. High Grade ores:
12% zinc/ton; = 240 lbs. zinc/ton x 50 cents/lb. = $120/ton for the
10.1% lead/ton = 202 lbs. lead/ton x 40 cents/lb. = $80/ton for the
6 oz. silver/ton x $6.95/oz. = $42/ton for the silver.
0.4% copper/ton = 8 lbs. copper/ton x 1.30 cents/lb. = $10/ton for the
Total: $249/ton! Prices accurate as of Mid Feb., 2004 3. My method of valuation: I'm really counting only the
silver, not the base metals in my "oz in the ground" valuation.
So consider a significant "zinc bonus", and "lead bonus". 4. Zinc and base metals prices headed up? About 49
cents/lb. for zinc! Check http://www.metalprices.com/
(I own shares of CZN.TO)
* IMR.V IMXPF.OB (IMA EXPLORATION) (I own shares.) http://www.imaexploration.com/s/Home.asp firstname.lastname@example.org
49,059,825 mil shares fully diluted (May 27, 2004)
@ $3.50/share Cdn x .79 US/Cdn = $2.76 U.S
$135 mil MC
Exploring in Argentina.
$4.5 million cash Snowden
Reports Over 200 Million Ounces of Contained Silver at IMA's Galena Hill
-- May 25th
Indicated + Inferred Resource = 243 mil oz.
"This resource includes only the Galena Hill deposit and portions
of the adjacent Connector zone, and does not include known and
interpreted mineralization at Navidad Hill, Barite Hill, Calcite Hill,
or along the Esperanza Trend." My comments: This resource might be perhaps 1/4 or 1/5th
overall potential resources, based on estimating by looking at size of
the land area being explored, compared to the size of the land area
covered by the resource calculation. The full exploration
potential might be 4 times as big.
$135 mil MC / 243 mil oz. = $.56/oz
You get "approx" 12.37 ounces
in the ground for 1 oz. silver's worth of stock.
(Exploration potential might be (times 4) or 49.
IMA has several joint venture partners in the area in Argentina near
Navidad. See Tinka, Cloudbreak, Consolidated Pacific Bay.
Other companies are in the near area such as Pategonia Gold, Pacific
Rim, and Silver Standard. And, of course Aqualine who, based on
their lawsuit, seems as if they think they own the entire area for 50
miles around all their mining claims. That's a total of 7 other
companies in the area. And of course, Cardero also has
significant exploration properties in Argentina.
IMA had many other silver properties that they just spun off into a
new company, Golden Arrow. For every 10 shares of IMA existing
shareholders got 1 share of Golden Arrow. (See below)
(I own shares of IMR.V)
SHSH.PK (SHOSHONE SILVER) http://www.shoshone-mining.com
Carol Stephan, director, 208-666-4070
18 million outstanding shares
@ $.40 US
$7.2 mil MC
Lakeview Mine and Mill: 24,190 tons of mineralized material delineated
at Lakeview, grading an average of 11.8 oz/t silver.
= 285,000 oz. silver. But is a narrow (high grade) vein mine,
like Cour d'Alene and Hecla, with few reserves.
Conjecture (in Lakeview district): 336,000 tons at a grade of 11 ounces
per ton of silver = 3.7 mil oz. silver. "Terms of the
25-year lease [of the conjecture] include payment of a $3000 per year
issuance of one million shares of Shoshone common stock to Chester,
and a sliding scale net smelter return based on the spot price of
silver." At .$60/share, that's $.6 mil MC more for the lease.
blende project: 21.4 million tons grading 1.63 ounces per ton (oz/t)
silver. (low grade) 34.8 mil oz. silver
(not 43101 compliant, plus 5.8% lead-zinc )
Shoshone must issue 1 million shares,
and spend $5 million on exploration by December 31, 2008 to complete
its 60 percent earn-in on the blende project. How to count
an investor, I hate evaluating these kinds of complex deals. 60% of 34.8
oz. silver is 20.9 mil oz. that will cost an additional $5 million,
plus a million shares. At $.60/share, that's $5.6 million for
oz. resource. That's $5.6 million / 20.9 mil oz. = $.27/oz.
acquisition cost to Shoshone for blende, which they don't own yet, just
an option. I don't like options, which is why I buy silver
bullion, and mining companies in the first place, as they are "unexpiring call options" if they own their properties.
Total: 4 mil oz. silver, plus an option on 20.9 mil oz. silver at
$7.2 mil MC (plus $6.2 mil they need to raise to maintain leases) / 4 mil oz, plus 20.9 mil oz.
oz.) = $.54/oz.
You get options and leases
that, if they raise money at the current share price, may give "approx" 12.8
ounces in the ground for 1 oz. silver's worth of stock.
FAN.TO FRLLF.PK (FARALLON
http://www.farallonresources.com/fan/Home.asp email@example.com (604) 684-6365 Erick Bertsch
78.3 mil shares fully diluted (Aug, 2004)
@ $.83/share Cdn x .79 US/Cdn = $.65 US
$51 mil MC
Exploration and development in Mexico.
Managed by Hunter-Dickinson http://www.hdgold.com
On 4 sulphide deposits out of 16, 29 mil tonnes of ore grading 89 grams
silver/t and 1.57 g gold/t.
Conversion: 89 grams x .03215 troy oz./gram
= 2.86 oz./t silver
RE: those 29 mil tons, they "anticipate increasing resources to 50
mil tonne range..."
2.86 oz./t silver x 29 mil tons = 83
mil oz. silver
1.5 mil oz. gold x 10 = 15 mil
oz "silver equiv".
Total: 98 mil oz. silver
(Exploration potential = x 1.7 = 167)
(Minus: The recoveries on low
grade ores such as this are typically not 100%, but may be more like
50-85%, but it also depends on which metal in the polymetalic deposit
that they most focus on extracting, and also depends on advances in
$51 mil MC /98mil oz. silver
equiv. = $.52/oz.
$51 mil MC / 167 mil oz.
silver equiv. = $.30/oz. --exploration potential
You get "approx" 13.2 ounces
in the ground for 1 oz. silver's worth of stock.
Exploration potential = 23
These drill results contain much higher levels of zinc than previous drilling, 4-8% compared to 2%.
The last drilling was done in 1999... because of low zinc prices: 46% of the
price of the metals was in the zinc before prices crashed... The
largest componant in late 2003 was gold, which was surprising to Eric,
the IR guy I spoke with. About 1/3 is in silver now.
At today's low metals prices:
2% x 2000 lb = 40 lbs zinc x $.42/lb = $16.8 for the zinc
(.37 to .50 lb zinc.)
3.14 oz. x $5.15 = $16 for the silver.
.055421 oz. x $385/oz. = $21 for the gold
(Assuming 100% metals recovery--which is not likely to be the
case. It may range from 60% to a higher percentage, depending on
extraction methods used and the particular mineral targeted, which
constantly change with
technology advancements, and price changes in the metals. By the
time a mine like this gets running, perhaps in 5 years or so, things
change to allow even greater metal recovery.)
The stock once had a market cap of $450 million, Canadian.
Speaking with FAN.TO guys, they think reserves of ore could be 50 mil
tonnes OR MORE, but that they really don't know, and want to issue
SRLM.PK (STERLING MINING) http://www.sterlingmining.com/
RDemotte@aol.com Ray DeMotte 208 666 4070
12.2 mil shares outstanding (May 31, 2004)
16.6 mil shares fully diluted (May
2004) --(To get the latest number, I have to call Ray DeMotte. Note the date.)
$114 mil MC
~185 mil oz. reserves + resource, Sunshine alone
Quote from: http://www.sterlingmining.com/jun112003.html
"The prior operator last estimated the mine reserves at 26.75 million
ounces of silver, 10.36 million pounds of copper and 7.05 million
pounds of lead (or approximately 28.85 million ounces of
silver-equivalent), as well as an additional resource of 159.66 million
ounces of silver. "
Baroness 15 mil -- tailing project, no further exploration
potential, (construction finished, testing beginning)
Tesorito 17 mil -- + exploration potential San Acacio
14 mil -- + exploration potential
Total: 231 mil oz. silver
$114 mil MC / 231 mil oz. = $.49/oz.
$114 mil MC / 550 mil oz. = $.21/oz. (exploration potential)
You get "approx" 14.0 ounces
in the ground for 1 oz. silver's worth of stock.
(Exploration potential is 33.)
I wrote an article on SRLM in late
Dec. 2003. See: Sterling
(But I no longer own shares.)
Ray DeMotte really, really understands the silver story, and has been
aggressively acquiring silver properties. Sterling continues to
consolidate its land position around the Sunshine mine.
Sterling Mining acquired the Sunshine mine. Sunshine had "more than 360
million ounces of production
over the past century" and was one of the big three: Hecla, Couer,
& Sunshine. Sunshine went bankrupt. Sterling got the property a few
months ago cheap, because they were quick & willing to pay cash.
Other buyers wanted to do a full study before making an offer.
The best factors, I feel, are as
1. The Sunshine mine is an existing mine that was mining at a profit.
The company went bankrupt, not the mine. So there will be no great
capital costs for start up, only minimal costs.
2. The Sunshine sits on 1/2 sq. mile, and was never fully explored.
Sterling Mining owns 10 square miles of property surrounding the
Sunshine, right in the heart of silver country, the location of CDE and
HL, the other two big companies at the top of this list.
3. The management of Sunshine understands the silver story. They
are on a mission to acquire distressed silver properties at today's
prices. See also: December 14, 2003: "In light of the continued low
price, Sterling has this year begun holding back into inventory a
of this year's silver coins minted."
* SVL.V STVZF.PK (SILVERCREST MINES) (I own shares)
25.9 mil shares fully diluted March, 2004 @ $1.25/share Cdn x .79 US/Cdn = $.99 US
$26 mil MC
$3 mil cash in the till.
Honduras - Arena Blanca: high grade exploration project, 7,600 g/t silver, no samples, adit inaccessable.
Honduras - Opoteca Deposit: Indicated and Inferred silver: 12.8 mil oz. silver
Honduras - La Pochota: a vein, 1-4 meters in width, of between 300 to 500 g/t silver, needs drilling
Honduras - El OCote Deposit: Indicated and Inferred silver: 19.8 mil oz. silver
Ultimate exploration potential may be another 40 to 100 mil oz?
See the Rosita Extension, grades 100 to 200g/t silver, news release
dated Sept., 2003, "SilverCrest Makes Significant Discovery at El Ocote
Silver Project" (in Honduras) El Salvador - El Zapote Project: Indicated and Inferred silver: 14.3 mil oz. silver
Guatemala - Concepcion Concession (pending): includes several
past producing silver mines. documented results of greater than
13,714 g/t silver -- a historical resource of 1.9 million tonnes
grading 86 g/t (2.5 opt) silver (4.75 mil oz., non- 43-101 compliant) Mexico - Silver Angel Project-- a 100% interest in 10,300
hectares located in the northern Sierra Madre Range... with structural
features that host seven past producing, high grade silver-gold mines.
--currently exploring this project.
Totals: 12.8 + 19.8 + 14.3 + 4.75 = 51.65 mil oz.
+85 million pounds of zinc, indicated and inferred.
$26 mil MC / 52 mil oz. silver = $.49/oz.
You get "approx" 14 ounces in the ground for 1 oz. silver's worth of stock.
results of the 30 hole drill program nearing completion at the
El Zapote Project in El Salvador,
revised resource estimates for the Cerro Colorado III and
adjacent San Casimiro deposits at El Zapote,
El Zapote Feasibility Study update,
initial drill results for the three hole drilling program at
the Tajado Prospect located at El Zapote,
results of the Phase 1 exploration program on the Silver Angel
Prospect in Sonora, Mexico,
results of the initial 9 holes currently being drilled at the
Silver Angel, and
progress on the potential acquisition of additional silver
The two projects of current
focus are in Mexico and El Salvador, (nothing in Honduras at the moment). The El Salvador project is
moving "full speed ahead" with a feasibility study expected by
November. Depending on the study, hoping for produciton perhaps
by Jan or July, 2006.
Regarding the properties in Honduras: "The company believes that the El Ocote silver
deposit can be developed to the advantage and benefit of the people of
Honduras without any serious detriment to the environment. It continues
to be prepared to work toward a social contract that will address the
needs of all the stakeholders but must be confident that the government
of Honduras is prepared to respect the rule of law and support foreign
investment in the development of the natural resources of Honduras
before committing substantial amounts of its shareholders capital to
I own shares of SVL.V
GGC.V GGCRF.PK (GENCO
RESOURCES) http://www.gencoresources.com/ firstname.lastname@example.org IR: Rob Blankstein: 604-682-2205, or
20+ mil shares fully diluted (April, 2004)
@ $1.00/share Cdn x .79 US/Cdn = $.79
$16 mil MC
--Producer in Mexico. http://www.gencoresources.com/reserves.html
Inferred resources: 484g/t silver x .03215 = (15.5 oz/t) x 2.3 mil t =
35.8 mil oz. silver
2.00g/t gold x .03215 = 148,000 oz. gold x 10 = 1.5 mil oz. "silver
385 x .03215 = ... x 95k = 1.2 mil oz silver
40+ mil oz. silver equiv. resources
2002 production, 500,000 oz. silver, 9000 oz. gold
$16 mil MC / 40 mil oz. silver = $.39/oz.
You get "approx" 17.5 ounces
in the ground for 1 oz. silver's worth of stock.
Additional Comments: As of
April, 2004, Genco is producing 35,000 oz/month of silver, earning
$100,000 Cdn/month, and expects to earn $1,000,000 Cdn/month by year's
end by doubling both the tonnage and the grade. Genco is also
aggressivly planning on making property acquisitions.
CHD.V CHDSF.PK (CHARIOT
RESOURCES) http://www.chariotresources.com/ email@example.com
45 mil shares fully diluted October 2003
@ $.35/share Cdn x .79 US/Cdn = $.28 US
$12 mil MC
Cello Ccasa (1 project of 4) Resource Estimate - August 2002
31.4 mil oz. silver, 134,000 oz. gold. (x 10 = 1.3) 32.7 mil oz.
(Stilll much exploration work to do.)
$12 mil MC / 32.7 mil oz. = $.38/oz.
You get "approx" 18.1 ounces
in the ground for 1 oz. silver's worth of stock.
* EXR.V EXPTF.PK (EXPATRIATE RECS) (I own shares)
1-877-682-5474 Dr. Harlan D. Meade, President and CEO
122.9 mil shares fully diluted (July 23, 2004) (listed on the front page of the web site!)
@ $.395/share Cdn x .79 US/Cdn = $.31
$38 mil MC
$1.2 mil CAN capital in the tilll no debt.
Mostly a base metals company: Zinc. Also has some silver
6 properties. Most of the value is concentrated in the 100% owned Wolverine Project.
Total mineralization across 6 properties: 97.2 mil oz. silver, 565,000 oz. gold, = 103 mil oz. "silver equiv." About 3.8 billion pounds zinc, also some copper and lead.
$38 mil MC / 103 mil oz. silver
You get "approx" 18.4 ounces
in the ground for 1 oz. silver's worth of stock.
On Sept. 7th, Expatriate announced their intentions to complete an $8 million Cdn financing.
Significant zinc bonus, about 3
times the silver value. Smelter
credits are estimated
at about 60% zinc, 25% silver, 10% gold and copper, and the rest, other
minerals, but that assumes old low prices for silver, about
$5-6?/oz. My method of valuation puts a value on the silver only,
not the rest, so this is a significantly better value than my number
Call Dr. Harlan D. Meade, President and CEO 1-877-682-5474, and
ask him to send you an information packet on EXR.V. It contains a
good report on why he is bullish on both silver and zinc.
(I own shares of EXR.V)
HDA.V (HUSIF.PK) (HULDRA SILVER)
no web site
Phone: Magnus 1 (604) 261-6040
6.924 mil shares fully diluted (end '03?)
@ $.54/share Cdn x .79 US/Cdn = US $.43
$2.9 mil MC
HDA's proven and probable reserves stand at 161,000 tons of
ore grading an average 25.6 ounces per ton silver, and 10 percent
lead/zinc -- 4.12 mil oz silver, not including the zinc & lead.
According to Magnus, the indicated and inferred reserves total about
tons at about the same grading -- in other words, a further 4 million
~8 mil oz. silver
$2.9 mil MC / 8 mil oz. silver = $.37/oz.
You get "approx" 18.8 ounces
in the ground for 1 oz. silver's worth of stock.
Additional comments: There is a significant lead/zinc
bonus. "The property could be put into production at a capital
cost of Cdn $3.5 million -- with payback of capital (when equity
financed) within two years."
RDV has a "gold bonus". At $409/ gold,
and $6.50/oz. silver, it's
about $300 million worth of gold, and $200 million worth of silver, or
about 60% of the value is in the gold. Since my method really
undercounts the gold, this means there is a significant "gold bonus"
* MGN (MINES MGMT) (I own shares)
(509) 838 6050 Doug Dobbs
12.4 mil shares fully diluted (April 2004)
$81 mil MC
261 mil oz. silver resources. Previous drilling spent over $100
million drilling the property.
$81 mil MC / 261 mil = $.31/oz.
You get "approx" 22.3 ounces
in the ground for 1 oz. silver's worth of stock.
The revised plan for
developing the Montanore Mine envisions an operation processing 12,500
tons of ore per day, yielding approximately 8 million ounces of silver
and 60 million pounds of copper per year at a cash cost of under $2.90
per ounce. (At a capital cost of approximately $236 million.)
"The cash operating costs of the project remain attractive at
approximately $12.14 per ton, taking into account inflation offset by
increases in productivity from improved mining methodology and
About 2-3 oz silver/ton, 0.75% copper.
As copper moves up 5 cents/lb., it adds $100 million to the value of
As silver moves up $.50/oz., it adds $130 million to the value of the
Mines Management (MGN) owned 10% of the rights to their property in Montana.
The other 90% owner, Noranda, simply gave up on the property and walked
away from their mining claim due to "perpetually" low silver prices and
political concerns. That explains the rocketing share
the MGN group got 90% of the rest of the property FOR FREE!--the value
which, and the nature of this transaction has just barely begun to be
understood by the market, given the low relative price.
Their property also has about 61% of the value (at current prices) in
copper (copper recently at $1.43/lb.),
2 Billion pounds of copper, and 261 mil oz. of silver. Doing the
261 mil oz. silver x $6.70/oz.
= $1.748 Billion.
2 Billion lbs copper
x $1.39/lb.. = $2.8 Billion.
Total value of mineralization before costs to extract, $4.5
billion. It was recently a high of:
This number increased from around $3 Billion just a few months
numbers do not suggest a potential market cap value of the
company. The costs to extract that mineralization will be
substantial, along the way. However, if they are cost effective
at today's prices, and if metals prices double, then that is
substantial profit, and creates the leverage investors seek.
They do not have an active working mine--which is a minus. They
will need to raise capital to get a mine going: $236 million current
Regarding environmental concerns: Noranda had a fully approved
Environmental Impact Statement (EIS) that led to successful project
permitting, so environmental concerns were not a factor in Noranda's
departure of the project in 2002.
* ABI.V ABMBF.PK (Abcourt Mines) (I own shares) http://www.abcourt.com/ firstname.lastname@example.org Jeff Tremblay (IR) (418) 575-1169 cell phone
28.3 mil shares fully diluted (June 21, 2004)
@ $.23 share Cdn x .79 US/Cdn = $.18
$5 mil MC
no debt., North of Montreal., ~11 mil shares family owned.
proven reserves... not ready to be opened, re-opened perhaps in mid
--Abcourt-Barvue: Past producer, existing infrastructure: Put into production a second time, 1985-1990 for $20 million.
--Historic Resource for: 18.1M oz silver, 120,000 oz.. gold, 303,000 tons zinc, 2,308
--Estimated cost to reopen the silver
mine was (with the old plan) $35 mil Cdn: Estimated: 27.55% IRR, 98%
return on equity, payback period of 2 years.
-The current plan is to do an 80,000 ton bulk sample at an approximate cost of $5 mil Cdn, hopefully by early 2005.
$273 million worth of zinc at .45/lb, $108 million worth of
silver at $6/oz, $45.6 mil worth of gold at $380
$5 mil MC / 19 mil oz. = $.27/oz.
You get "approx" 25.5 ounces
in the ground for 1 oz. silver's worth of stock.
Additional comments: Jeff
Tremblay and Renaud Hinse took a trip to Vancouver and San Franciso,
and came out to Grass Valley, California my hometown, to meet with me
late August. They have been in business as early as
1977. The mine last operated
from 1985 to 1990.
In 1980, the stock price hit a high of $4.95/share. In 1985, they raised and spent $20 million
start production, and in 1990 production was put on hold due to low
silver and zinc prices.
Imagine trying to run a business for 14 years with no revenue! Yet,
during that time, they have managed to keep the company debt free, and
dilution to a minimum! Yearly costs to keep the claims and equipment
of this family-run mine are $100,000, so that has been their secret of
--looking to raise $5 mil to reopen the gold
looking to raise $5 mil to reopen the silver/zinc mine.
(I own shares of ABI.V)
* ASM.V ASGMF.PK (AVINO SILV GOLD) (I own shares.) http://www.avino.com/ email@example.com 604 682-3701 --
10.5 mil shares outstanding. / 12.5 mil shares fully diluted (June 2004)
16.5 mil shares fully diluted (including, and after the purchase of
remaining 51% of the Avino mine) @ $1.53/share Cdn x .79 US/Cdn = $1.21 US
$19.9 mil MC
http://www.avino.com/other/goldstock100197.html --in 1997
"How Much Silver Does Avino Have?"
"Operations at Avino's silver mine in Mexico are both open-pit and
underground. I examined the reserves and interpolated the tonnage into
silver ounces as follows: 28-million ounces proven; 50-million ounces
and 27 million ounces possible." (Not all are 43101 compliant reserves
& resources.--that is an old, third party report.) The
Avino Mine operated from 1986 to 2001, producing about 497 tons of
silver, 3 tons of gold, and 11,000 tons of copper. That's about
1.6 million ounces of silver, or about a million ounces of silver per
Avino produced 166 ounces of silver for every one ounce of gold.
At a 60:1 value ration, that means that the value of silver to gold is
2.76 times as much value (today and historical) is in silver than gold.
They actually have over five silver properties/projects. I only have numbers for one, the primary Avino mine
= 28 + 50 + 27 = 105
Avino owned 49% of that, or 51.5 mil oz., prior to the purchase
agreement for the remainder for an additional 4 million shares.
$19.9 mil MC / 105 mil oz. = $.19/oz.
You get "approx" 36.3 ounces
in the ground for 1 oz. silver's worth of stock.
(I own shares of ASM.V)
* CSG.TO CSGLF.PK (Capstone Gold) (I own shares) http://www.capstonegold.com
Chris Tomanik IR (604)-684-8894 firstname.lastname@example.org
37 mil fully diluted (March 2004)--from the web site (our company/corporate info)
(and 37 mil fully diluted from the July 30th / May 31 financial report)
42.7 mil shares fully diluted (August 2004)
@ $.82/share Cdn x .79 US/Cdn = $.65
$28 mil MC
$~6 mil Cdn, cash on hand.
They did a $9.1 million PP at $.75/share Cdn. in Jan 2004.
6 mil warrants at $1.00-$1.25 Cdn.
Projects all in Mexico, past producers. http://www.capstonegold.com/images/capstone_proj_sum.jpg
Cozamin is the largest property (gold/copper), for which drill results will soon be announced.
Six properties (Still need about $12 mil to fully acquire 90-100% over next 5 years, minus 3% NSR
"net smelter royalty")
Cozamin: indicated: 2.8 mil T x 85g/t Ag (7.4 mil oz. silver), .5g/t Au (44,000 oz. gold)
+ inferred: 3.1 mil T x 103 g/t silver (10 mil oz. silver), .5g/t Au (48,000 oz. gold)
High Grades range from about 200-300g/t silver. (6.5 - 9.5 oz. tonne) --across 5 properties Totals: (excluding Cozimin): 115 mil oz. silver, 2.3 mil oz. gold. (138 mil oz. silver equiv)
Grand total: (including Cozimin): 156 mil silver equiv. ounces
Exploration Potential: up to 500 mil oz. silver at Claudia (580 mil total?)
$28 mil MC (+ $6 or more mil to finance, to fully acquire) / 156 mil oz. = $.22/oz.
$28 mil MC (+ $6 or more mil to finance, to fully acquire) / 580 mil oz. = $.058/oz.
You get options and leases
that, if they raise money at the current share price, may give "approx" 32.0
ounces in the ground for 1 oz. silver's worth of stock.
Exploration Potential: 118
In case you didn't notice, the list of companies,
that have significant measurable resources, is in reverse.
The worst companies, that are the most expensive with the least
resources, are listed first, and
the better companies, with more resources at least cost, are listed
last, just above here. The list is done this way on purpose for
as follows. First, the best companies are in the middle of the
report (burried). Second, it allows the reader to see the many
other options available before seeing these ones. Third, this
means that this list is less likely to have a "pump and dump" type
effect. So, you have
to "scroll up" to see the list from this point.
deserve their own category, since they cannot be valued by the
method of looking at reserves and resources of ounces of silver in the
ground. We do not know how many oz. they might have. They are
exploring for that. A few explorers may also be producers, and
they are both listed here, if they do not have significantly large well-defined resources.
This list, although at the bottom, in no way indicates that these
companies are more highly valued, or less valued, than companies listed
above. There may be less certainty in the companies listed below,
and more certainty in the companies above.
also difficult to categorize a company as an explorer, since all silver
companies always hold more silver properties that need to be explored.
IE, everyone is an explorer!
The list above is not a list
producers, the list above is a list of companies with
measurable resources in the ground. Those below, generally do
not. Or, if they do have resource numbers, the numbers are very
small compared to their much larger exploration potential, and thus,
they are listed here.
(The order in this list is by largest market cap first, not by
"comparative value" of the market cap divided by the resources, as
HL (HECLA MINING CO) http://hecla-mining.com/ email@example.com
118 mil shares outstanding (August, 2004)
$870 million Market Cap (MC)
near zero debt, cash: $123 mil (Feb., 2004) (est. 2004 production 9 mil oz. silver and 215,000 oz. gold )
La Camorra gold mine, 547,885 oz gold.) (x 10 = 5.5 mil oz silver equiv.
San Sebastian silver mine, (proven & probable reserves) 3.8 mil (down from 8)
Greens Creek silver mine (proven & probable reserves) 31 mil (HL
owns 30% of this, but the 31 mil oz. number reflects that percentage
the Lucky Friday mine (proven & probable reserves) 10 mil. (down from 14)
5.5 + 3.8 + 31 + 10 = 48.9
Total silver equiv. reserves = 48.9 mil oz.
$870 mil MC / 48.9 mil oz. = $17.78/oz.
Additional comments: Given
that CDE made a share offer in week #36 for Wheaton River, I expect
Hecla will try a similar tactic very soon, and offer shares to acquire
another silver company. (still waiting...)
Hecla is the most expensive company on the list in terms of cost per
oz. of silver in the ground. But
HL has more oz. than listed in the "proven & probable" category
used in this calculation. Vein mining makes reserve calculations
and HL has rarely had more than about a 3-4 year picture of reserves
of them in 100 years of production.
So, the other way to value a company based on the fundamentals is on
the price to earnings ratio, or P/E ratio. Hecla has a net income
of $6.2 million
for the first quarter of 2004, which silver prices were high, and $8.9
million net income for the first half of 2004. Annualized, that's
million to 18 million. The higher number gives a P/E ratio
$870 mil MC / $24.8 mil = 35,
to me that HL is way too expensive of a stock to buy. Other
silver properties and companies in the silver world have expected P/E ratios of
as low as 3.
At the NY Gold show in June, I spoke with Vicki Veltkamp, Hecla's vice
president of investor and public affairs, and I listened to her 15
minute presentation on Hecla at the show. I felt that her
presentation honored my work, since she focused on the fact that Hecla
does not have substantial reportable reserves, due to the nature of
vein mining. She also emphasized that they already had detailed
plans for spending all of their available cash, of $123 million, which
implied that they had nothing left over to buy silver
bullion. Point: HL is not going to buy silver
bullion with their cash anytime soon.
One of Vicki's arguments was that HL only produces 9 million
ounces of silver, and that in a market that produces 500 million ounces
of silver a year, that withholding production would not significantly
move up the price. I think she's looking
at the wrong numbers. HL's market cap has recently ranged from
$600 million to up to $1,000 million. The remaining silver at the
COMEX, available for delivery in the registered category is only about 50
million ounces, not the 500 million ounes annually produced. The
available silver is valued, at $6/oz., at $300 million. HL could
issue 1/4 to 1/3 more stock than they already have outstanding, and use
the proceeds to buy perhaps $300 million worth of silver bullion, and likely
break the price to sky high levels, which would boost profits
If HL mines 9 million ounces of silver a year, at a cost of about
$5-6/oz. (because their profits are slim), then if the silver price
rises to about $33/oz, and other costs remain the same, HL could be
making $250 million dollars per year. It seems the largest silver
companies have absolutely no vision about how they can affect the
markets, and take a leadership role in the world of silver.
I urged Vicki that HL should use their stock or cash, if not for buying
silver bullion, then to acquire other silver companies, since I believe
their stock is overvalued. Vicki said HL does look at many
acquisition opportunites, and would be interested in looking at others.
I expect silver bullion to continue to outperform HL
stock at these prices. MGR.V MGRSF.PK (MEXGOLD RSCS) http://www.mexgold.com/
52.5 mil shares fully diluted (spring 2004)
@ $2.71/share Cdn x .79 US/Cdn = $2.14 US
$112 mil MC
inferred resource: 45 mil oz. silver + 1 mil oz gold.
1 mil oz. gold = + 10 mil oz. silver equiv
"The estimate does not address significant additional mineralized
structures known to be present on the property, or the potential for
strike extensions of known high-grade zones."
February Financing was for the El Cubo Gold-Silver Mine is located in
the Guanajuato gold-silver
district in the Republic of Mexico. Historical reports cite district
production at 1.2 billion
and over 4 million ounces of gold. With capital spending and upgrades,
and expect to produce up to 100,000 oz. gold equiv/year at $190/oz. At
$400/oz, that may mean $210/oz. net profit, or $21 million positive
cash flow/year, and yet, the purchase price was $21.5 million.
like they bought a mine, at a price, with a profit potential, of a P/E
ratio of 1.
Target to expand
the El Cubo project resource to over 2 million
ounces of gold equivalent. Given that historic production was 300
of silver for each 1 oz. of gold, I think it's odd that they speak in
terms of "gold equivalent". Why not emphasize the silver???
Converting their target of gold back to silver, at their ratio of 65:1,
gives 130 mil oz. "silver equivalent".
55 + 130 = 185 "exploration potential"
$99 mil MC / 185 mil oz. = $.54/oz. That's an "exploration potential target"
Gammon Lake is a large shareholder, 26.3%.
Mexgold announced bonanza grade discovery on Jan 13th, 11
kilos per ton silver, over 2 meters.
Part of a section of "25.5-metres grading 1.16 grams per tonne gold and
961 grams per tonne silver."
CDU.V CUEAF.PK (CARDERO RSCS) http://www.cardero.com/ firstname.lastname@example.org
Henk Van Alphen -- President (604) 408-7488
40.1 mil shares fully diluted (July 1 2004)
@ $3.67/share Cdn x .79 US/Cdn = $2.90 US
$116 mil MC
($17 million Cdn cash in the treasury)
Additional comments: Cardero has three silver properties in Argentina; two main silver
exploration properties: Chingolo and Providencia.
Aug 17, 2004 Cardero Announces Results From Providencia
"Cardero is encouraged by these results although ongoing sample recovery
problems remain a concern..."
Providencia -- high grades of silver, former silver mine, could have
100-250 mil oz. ??
Chingolo -- Henk says, "may have 400-600 mil oz. "exploration
potential" in 200-300 mil
tons of rock." They got 30-40 grams (1.23 oz.) on the first drill
hole, but hope to find 2-3 ounces silver/ton.
June, 2004: Company quote: "The Company is actively evaluating silver,
gold, copper and iron-ore
projects which will ensure the recognition of Cardero as a
world-class exploration and development company."
1 604 684 8950
39.7 mil shares fully diluted. (Nov 2003)
@ $.365/share Cdn x .79 US/Cdn = $.29 US
$11 mil MC (US)
Additional comments: They own 5.82 million shares and 388,000 warrants
of Cardero at $.35, which usually is a greater asset value than their
cap. Ascot's share price is typically around 80% of the value of their
Cardero Stock, and less liquid.)
Owns about $17 mil worth of Cardero Stock at closing prices on Sept. 10th!
(I'm listing this one out of order, not by market cap, and next to
Cardero, because of their position in Cardero.)
It may be better to buy Ascot than
Cardero, depending on prices. Check the math, and call Ascot to
verify Cardero stock holdings, and number of shares.
* OTMN.PK (O.T. MINING) (I own shares) http://www.otmining.com/ email@example.com Jim Hess Tel:
12.8 mil shares fully diluted (May 15, 2004)
$61 mil MC
Historic silver production for the Butte district, from 1880 to 2000
was 714,643,005 oz. silver.
They think their deposit may be bigger than "the richest hill on
earth", which is located near their property, in the Butte
The exploration potential for this company is astounding, if they are
Drilling has begun!
"The Ruby property encompasses the past-producing high-grade Ruby
gold-silver deposit which produced an average of 2.44 ounces per ton
gold and 38.66 ounces silver per ton. A 193 ton bulk sample of a
high-grade base metal mineralized zone associated with the Ruby deposit
returned 7.6% lead, 5.19% zinc and 1.31% copper per ton."
"...This deposit is situated adjacent to the Ruby property and
according to old reports contained 0.88-34.28 ounces per ton gold,
35-527 ounces per ton silver, 1.96-11.84% lead, and up to 5%
SPM.V SMNPF.PK (SCORPIO MINING) http://www.scorpiomining.com
53.6 mil shares fully diluted Aug 9th, 2004
@ $1.05/share Cdn x .79 US/Cdn = $.83 US
$44 mil MC
Scorpio's recent March 2004, $16 million financing was at $2.25 Cdn/share!
The Nuestra Senora Project: (the Candelaria deposit):
Total Measured & Indicated: 131,058 tonnes @ 520.94 g/t Ag = 2.1 mil oz. of high grade silver, 16 oz./ton. Inferred: 49,468 tonnes
@ 658.98 g/t Ag (21 oz./ton) = 1 mil oz. silver
--the Cochrane Hill Gold Deposit:
The total Indicated Resource ~ 112,460 contained ounces of gold.
Total: 4 mil oz. silver equiv.
* FCO.TO FCACF.PK (FORMATION CAPTL) (I own shares) http://www.formcap.com/s/Home.asp firstname.lastname@example.org 604-682-6229
165 mil shares fully diluted, March 2004
@ $.56/share Cdn x .79 US/Cdn = $.44
$73 mil MC
(Completed $10 million financing in late 2003, early 2004)
Very large cobalt property: 1-3 million tons of 0.60% cobalt equivalent
Cobalt prices are racing ahead, up to $25- $33/lb.
2000 lbs/ton x 0.6% = 12 lbs/ton x $29.50 /lb. = $354/ton
cobalt is $29.50/lb. recently,
up from $9/lb.
Formation Capital owns
the Sunshine Silver Refinery (near Sterling Mining), worth $50
Break even cost $5-6/lb cobalt.
The Idaho Cobalt Project is projected to produce 1,500 tonnes of cobalt
= 3,000,000 lbs. production x about $
20/lb profit? = about $60
FCO.TO also owns a few minor silver projects.
The cobalt project needs more drilling, and with recent financing,
things look bright.
The refinery has started up, on time
and under budget sunshinerefinery.com
I own shares of FCO.TO
TVI.TO TVIPF.PK (TVI PACIFIC) http://www.tvipacific.com email@example.com
Dianne (IR) Phone: (403) 265-4356
400.5 mil shares fully diluted (June 14 2004)
@ $.165/share Cdn x .79 US/Cdn = $.13 US
$52 mil MC
"The company has a policy of not hedging or entering into forward
Cash flow positive. + 2.5 % royalty on "Rapu Rapu"
that should be worth about $1 million per year starting within 9-12
months. (a cash source for an explorer is a big plus)
14 projects in the
Producing a dore bar of 96% silver and 4% gold from Canatuan project
with the following:
Total silver = 7.1 mil oz silver
Total gold = 182,000 oz. gold x 10 (@10:1) = 1.8 mil oz silver equiv.
Total silver equiv (Canatuan) = 8.9 mil oz.
+ they own a drilling company with 20 rigs.
+ they have a "foot in the door" in China.
+ many other promising exploration properties in the Asian Pacific.
TVI exploded in price from 16 cents to
23.5 cents when they announced that they would be mining in China: "TVI
Pacific Inc. Receives Landmark Approval for Wholly Foreign-Owned
Enterprise (WFOE) Status From Chinese Government". see http://tinyurl.com/vwbw
They are primarily a silver explorer. The bonus is they are a
producer, and are cash flow positive, which are both extremely rare for
an explorer. In fact, the other producers mostly all lose money!
* NPG.V NVPGF.PK (NEVADA PAC GOLD) (I own shares)
(604) 646-0188 David Hottman 59 mil shares fully diluted (Aug 18th, 2004)
+ 1.3 mil Placer dome placement
60.3 mil shares
@ $.93/share Cdn x .79 US/Cdn = $.73 US
$44 mil MC
$2.8 million cash (April 2004)
Amador Canyon Silver Project: 50-250 mil tonnes
silver grades average 4 oz. sil/ ton in the deposit
= 200 to 1000 mil oz. silver????? --very speculative at this point.
Drilling needs to be done.
$44 mil MC / 200 mil oz. =
$44 mil MC / 1000 mil oz. =
Nevada Pacific Reports Drill Results From Amador Canyon Silver Project Friday October 1
I have been eagerly awaiting these drill results of phase one of a
10,000 foot drill program. They did not show a 4-6 oz./ton range
as hoped, as many of the results were 1 oz./ton, but they did find one
spot of higher grade: 8 oz./Ton over 40 feet. I'm leaving the
rest of my prior comments in full this week, so you can compare the
expectations with the reality. -------------------
The 200 to 1000 mil oz. of silver
exploration potential estimate for the Amador Canyon project is based
on the size of the area, which may provide between 50 and 250 million
tonnes of ore, times a low grade of 4-6 ounce per ton. 50 mil tonnes x
4 oz/tonne = 200 mil oz., the low end of the target range. 250
million tonnes x 4 oz/tonne = 1000 mil oz., the high end of the
range. That target range is the expectation that the geologists
are hoping the drilling will prove up. It will likely take
several rounds of drilling and analysis of drill results to get a
proper resource calculation, and plenty of time.
NPG.V has 10 gold projects, and one silver-but it may be big. The
Chairman, David Hottman, says that 90% of the value of the company is
in gold, NOT silver, and yet, I'm buying this company
for the silver project of Amador Canyon only, and as if the gold
componant was worth nothing.
(The gold projects are a free bonus, in my book, and help to alleviate
risk of this explorer.)
Explorer in Nevada. They do not really know how much silver they might
they have in the Amador Canyon project. They just did a $2.5
million private placement, and another $10 million private placement in
late November. On the web site, for David Hottman's bio, it
says he was a founding member of Eldorado gold. "During his tenure,
Eldorado's market capitalization grew from Cdn $7 million in 1992 to a
peak of Cdn $781 million in 1996." Please note, exploration is
risky, and costly.
Now that they are well-capitalized with over $10 million dollars, this
company will likely do very well as they drill and prove up the
deposits across all their properties.
first drill was mobilized in January 2004 with additional drills added
April through July to the present 4 drill program. To date, 160 holes
have been drilled with a total of 15,602 meters drilled.
Reserva International of Reno, Nevada
has completed a block model evaluation, using GEMCOM mine modeling
software, of the oxide zinc mantos diamond drill, channel sample and
percussion drill data. The block model result for the Iron Oxide (Red
Zinc) manto is 22.6 million metric tons grading 8.11% using a cut off
grade of 5%. "
1 metric tonne = 2 204.62262 pounds
8.11% x 2204 pounds/tonne = 178.7 pounds/tonne
178.7 pounds/tonne x 22.6 million metric tonnes = 4039.6 million pounds of zinc.
@ $ .44/lb, that's $1.8 billion dollars worth of zinc, and who knows how much silver.
This press release is very understated, using no superaltives.
They found exactly what they were looking for, 4 billion pounds of
zinc, and they are drilling for more, which I find very exciting.
Their latest quarterly also includes a statement of the historical
production, right below: Zinc & Silver in Mexico: Sierra Mojada. Sierra Mojada
is a Silver District! "The
Sierra Mojada Property has produced in excess of 10 million tons of
high-grade ore that graded in excess of 30% lead, 20% zinc, 1% copper
and 1 kg (31 ounces) silver per ton that was shipped directly to the
smelter. The district has never had a mill to concentrate ore. All of
the mining was done selectively for ore of sufficient grade to direct
ship; mill grade ore was left unmined."
(That's 310 million ounces of silver. Who knows how much silver is left?) That's the question with an
--Potentially the lowest
production cost in the entire zinc industry due to new "oxide deposit"
chemical extraction process as revolutionary as "heap leaching".
(Merlin of MMGG.OB, and Harlan of EXR.V (friends) both have
reports that will educate you on the bullish story for Zinc.)
I own shares of MMGG.OB
MCAJF.PK (MACMIN LTD) http://www.macmin.com.au/ firstname.lastname@example.org
450 mil shares and options (Feb., 04)
$45 mil MC
This stock seems extremely volatile in price, with low liquidity, ranging from 7 cents to
13 cents. Total resource: 56 million oz. --from 2004 annual report.
Will soon become a producer.
The company is debt free, but has an "equity line of credit of $10
million" so that they can issue shares for money to a certain
group. This may explain the wild changes in share price.
The potential investors want a lower share price for any new
financings! Also, Macmin has several
multi-million oz. potential projects.
The other benefit of FR.V is that the
company is keen on acquiring new properties. This is where the
money is made for a company in today's bull market in silver, in my
opinion. From the home page of the web site:
"First Majestic recently announced the acquisition of Le Parrilla Silver
Mine, Mexico, which is anticipated to be the first of several acquisitions
over the coming months."
I own shares of FR.V
ECU.V ECUXF.PK (ECU SILVER MINI) http://www.ecu.ca/ -- site under construction, and under review by the exchange. email@example.com (819) 797-1210 = "145 mil shares fully diluted-about" verbal, from IR dept. (Sept. 9th, 2004)--including "about 5 mil shares in Sept 21 financing."
@ $.405/share Cdn x .79 US/Cdn = $.32
$46 mil MC
ECU.V is also exploring other gold properties.
ECU is now a producer: "Production
IAU.TO ITDXF.PK (INTREPID MINRLS)
Stephen Coates, Investor Relations (416) 368-4525
52.4 mil shares fully diluted (March, 2004)
@ $.72/share Cdn x .79 US/Cdn = $.57 US
$30 mil MC
$3.2 million cash from Dec. 9 financing.
Company's exposure is about half to gold, half to silver in several
Joint Venture with BHP Billiton focused on "Cannington" style silver
deposits using proprietary BHP Billiton data.
(all figures are "exploration potential")
El Salvador - 38.5 mil oz.
Argentina - 6 mil oz.
Total: 44 mil oz. silver
Total gold: ~690k oz. x 10 (10:1 ratio) = ~ 6.9 mil oz. "silver
Total: 53 mil oz. "silver equiv". (exploration potential or indicated
or inferred, not reserves)
The stock price exploded, nearly doubling, in response to the news of
the above drilling results.
Since this company is about half gold and half silver, the 10:1 ratio
really cuts down the "silver equiv" numbers, so keep in mind the "gold
bonus" factor here. But it's like that with a lot of the
on this list, so keep that in mind, and do your own math if you want to
use the 70:1 ratio.
MAI.V MNEAF.OB (MINERA ANDES) http://minandes.com/ firstname.lastname@example.org (604)
689-7017 Art Johnson
90 mil shares fully diluted (April, 2004)
@ $.66/share Cdn x .79 US/Cdn = $.52 US
$47 mil MC
Raised $6.6 mil in recent financing.
owns 49% of the resource: "55 mil silver equiv. oz. resource" back in
2001. AT 60:1 silver:gold when gold was about $300/oz., about
half/half silver and gold.
Estimated: 16.7 mil oz "silver equiv"
15 mil oz. silver + 1.7 mil oz. "silver equiv" of 170,000 oz. of gold.
They will be exploring for more: (The resources may be only 10% of the
2.2 km stretch, open another 2.7, plus 3 other vein systems.
significant high grade silver exploration potential. 7000 meters
of diamond drilling. Plus
a copper project, billion ton ore deposit.
Minera Andes has several significant bonuses that my method is not
valuing properly. First, I undercount the gold, of course, so
consider there is a "gold bonus" at current gold prices. Second,
they will be doing significant
exploration work to increase their resources, and they have
recently raised the money to be able to pay for that exploration
work. Third, they have a copper project, and copper prices are
rising. I moved MAI.V to the explorers list to be more fair to
EDR.V EDRGF.PK (ENDEAVOUR SILVER) (I own shares) http://www.edrgold.com/ email@example.com
Hugh Clarke, Investor Relations 1-877-685-9775
25.7 mil shares fully diluted (May 28th, 2004)
@ $1.35/share Cdn x .79 US/Cdn = $1.07
$27 mil MC
As of May 28th, 2004, they have $9 mil Cdn cash.
If all options and warrants are exercised, they will have another $9.8
mil Cdn in cash.
They believe there may be a
chance they will not need to dilute further
to develop current silver production plans at the Santa Cruz
Endeavour is not a "resource" play, but rather, a "production" play on
silver. They are listed with the explorers because they do not
large drill results or a resource calculation outlining significantly
large resources--they have only around 5 million ounces is all.
they don't have a "prospective" mining property. Instead, they
have a working mine! Like Hecla.
--currently producing 600,000 oz. silver/yr.
--plans to increase
production to 4,000,000 oz. silver/yr
Additional Comments: The
market went crazy for Cabo on Tuesday, with the stock up 25%, up to
$.95/share, and 1.4 million shares traded, nearly 47 times as many
shares as traded on average, 30,000. Later that day, Cabo
This will provide funds needed to
explore the silver properties, as the previous placements at $.75/unit
and $.83/unit, for about $7 million were primarily for the drilling
company acquisitions. Furthermore, this flow through financing
will go into the drilling companies, and into the properties, so the
company gets a double benefit as they drill their own properties, thus
keeping more of the money "in house".
Cabo's drilling acquisitions are now
profitable, and providing cash flow.
Cabo recently completed two private
placements, one at .75 Cdn/share, and another at .83 Cdn/share, and
successfully acquired two drilling companies.
RSCS) http://www.stroudresourcesltd.com/projects-santo.html firstname.lastname@example.org
Mr. George E. Coburn, President Tel: 416-362-4126 99 mil shares fully diluted (Oct, 2004)
@ $.23/share Cdn x .79 US/Cdn = $.18
$185 mil MC
JV partner with APM.V on Santo Domingo Silver Project in Mexico. 10oz. silver/ton x 22,000 tonnes. minimum...
150 to 300 mil oz. exploration potential of the deposit.
ownership is between 30-50%, so... 30% of 150 mil oz.= 45 mil oz., and
50% of 300 mil oz. = 150 mil oz.
$18 mil MC / 45 mil oz. =
$18 mil MC /150 mil oz. =
QTA.V is a Sister Company to Western Silver, WTZ above.
See also Bravo Venture, BVG.V, another sister company, with 34.5 mil
fully diluted shares (April, 2004)
PXI.V PNXPF.PK (Planet
Exploration Inc.) http://www.planetexploration.info/mexico.asp email@example.com
30.8 mil shares fully diluted (Jan. 2004)
@ $.74/share Cdn x .79 US/Cdn = $.58
$18 mil MC
Planet holds an option to acquire a 100% interest in the high-grade
7,005-hectare Copalquin gold/silver property located in Durango, Mexico.
"Resource estimates on the property have not been calculated since the
discovery of the high-grade vertical fault zone, its existence may
significantly alter Kennecott's and Fransisco Gold's original target
potential of one million ounces of gold and 50 million ounces of silver
based on their interpretation of a low-grade horizontal quartz breccia
NJMC.OB (NEW JERSEY MIN)
Fred or Grant Brackebusch
23.9 mil shares fully diluted Apr, '04
@ $.73/share US
$17 mil MC
New Jersey Mining Company (NJMC) is engaged in exploring for and
developing gold, silver and base metal ore reserves in the Coeur
d'Alene Mining District of northern Idaho also known as the Silver
Valley - one
of the world's richest silver districts.
EPZ.V ESPZF.PK (ESPERANZA SILVR)
30.5 mil shares fully diluted (July 29, 2004)
@ $.45/share Cdn x .79 US/Cdn = US $.35
$11 mil MC
"Esperanza Silver Corporation is solely dedicated to the
identification, acquisition and exploration of new silver
projects." Looking for high grades.
Additional comments: --"MAG Silver Corporation enters the silver market as a powerful force.
MAG combines a seasoned management team with two drill-ready geological
extensions of high-grade world class producing districts. MAG controls
100% of the Juanicipio property adjacent to the Fresnillo District in
currently producing over 12% of the world's silver from high grade
The geologist, Peter K.M Megaw, is also working with EXN.V, another
high grade silver project. Peter's philosophy was that it makes
sense to go after very high grade silver projects that will be
profitable regardless of the silver price.
EXN.V EXLLF.PK (EXCELLON RSCS)
http://www.excellonresources.com firstname.lastname@example.org 144 mil shares fully diluted (Aug 27, 2004 corporate profile)
@ $.205/share Cdn x .79 US/Cdn = $.16 US
$23 mil MC
indicated = 63,400 t x 2738 g/t x .03215oz./g = 5.6 mil oz. silver
inferred = 2100 t x 1,433 g/t x .03215oz./g = .1 mil oz. silver
"gross in-situ value of mineralization is $31.4 million."
EXN to own 51% of the project. Apex is the joint partner. 51% x
6.2 mil oz. = 3.16 mil oz.
Additional comments: "Excellon ...is exploring and developing".... "a
Bonanza grade Silver deposit in Mexico." The geologist,
Peter K.M Megaw, is also working with MAG.V.
Excellon completed a 9000 unit
financing for $9.9 million. A "silver debenture". The holders of
each unit can opt to receive cash or silver bullion based on 200 oz. of
silver per U.S. $1100. Thus, Excellon has "hedged" and pre-sold
1.8 million ounces of silver at $5.5/oz. Each unit also comes
with 1000 warrants for Excellon stock at $.325.
DNI.V DMNKF.PK (DUMONT NICKEL) http://www.dumontnickel.com email@example.com
60 mil shares outstanding (April 15, 2004) does not include options and
@ $.235/share Cdn x .79 US/Cdn = $.185
$11 mil MC
Dumont stilll needs to raise and pay several million to Clifton Mining for
50%-60% of each property, and there are many properties. (See
Clifton for more specifics on the JV agreement.)
Additional comments: Dumont has been acquiring many
properties, which is making Clifton's original property that much
bigger. Dumont is Clifton Mining's JV partner, doing active
work right now.
They just released their Technical Report Utah 2004
Technical Report Utah 2004 (11.5MB PDF)
and their Annual Report 2004
Annual Report 2004 (0.7MB PDF) see http://www.dumontnickel.com
not like JV agreements due to the complexity of trying to determine
ownership which is contingent upon many unknown factors that might
change in the future. One man recently offered me an interesting
suggestion. He simply said, "Why not buy both companies?"
* KRE.V KREKF.PK (KENRICH ESKAY) (I own shares) http://www.kenrich-eskay.com/ firstname.lastname@example.org
Toll-free 1-888-805-3940 or (604) 682-0557
29.2 mil shares fully diluted (July, 2004)
@ $.50/share Cdn x .79 US/Cdn = $.39 US
$12 mil MC
Recently completed a $2.3 million financing for exploration. Kenrich
Eskay's "Cory" property (25,000 acres, 100% owned) is 10km south of
Barrick's silver property, Eskay Creek, which is "the fifth
largest silver producer in the world", with
a reserve "at the beginning of 2001, 1.42 mil tons, grading 1.5
ounces/ton of gold, and 68.3 ounces/tonne of silver, 3.2% lead, 5.2%
zinc.--That's Barrick's Eskay Creek property. Kenrich Eskay is
hoping to find something similar nearby. (See 5th slide of http://www.kenrich-eskay.com/images/KRE-Presentation_files/frame.htm
70% of the rights to
The Property was once almost bought by Homestake (which was acquired by
Barrick) for $35 million in 1996, and
Homestake was going to fund all exploration and development. The
buy out ended when metals prices collapsed, and Bre-X hit, and when the
majors cut back on exploration budgets to stay alive. This
means the market cap of KRE.V may be worth 100% / 70% x $35 million, or
$50 million, plus exploration and development costs, to a major mining
company, and likely worth much more today, due to inflation of the
dollar, and the rise in the price of silver!
GPR.V GPRLF.PK (GREAT PANTHER RES) http://www.greatpanther.com email@example.com Robert Archer, President, & Kaare Foy CFO: 604 608 1766
25.9 mil shares fully diluted (8-20 news release, 2004)
@ $.37/share Cdn x .79 US/Cdn = $.30
$8 mil MC
"Great Panther Resources Limited has combined experienced
management, access to capital and high quality projects in Mexico.
Silver and gold prices gained 26% and 21% respectively in 2003 and GPR
intends to leverage this through the acquisition and development of
high quality silver and gold projects."
--Option on the Topia Silver Mine
in Mexico, formerly owned by Penoles, closed in 1999. Est. 5
years worth of resources left. needs payments totaling about $2.5
million over 3 years.
EGD.V EGDMF.PK (ENERGOLD MINING) http://www.energold.com/s/Default.asp firstname.lastname@example.org
Fred Davidson President (604) 681-9501
16.8 mil shares fully diluted (June 30, 2002)
@ $.59/share Cdn x .79 US/Cdn = $.47
$8 mil MC "advanced
silver project in Mexico" Real de Belem -- property has "all the
permits required for the commencement of a 200 tonne per day mining
operation." A range of 571 to 3,713 g/t Ag. (may not conform to
Canadian NI43-101 standards.) A 16 hole, 1500 m drill program is
currently underway. At any time during the currency of the Option
Agreement, Energold will have the right to acquire a 100% interest in
the Real de Belem project for an additional US$5.0 million.
GNG.V GGTHF.PK (GOLDEN GOLIATH) http://www.goldengoliath.com/ email@example.com
32.4 mil shares fully diluted
@ $.27/share Cdn x .79 US/Cdn = $.21
$7 mil MC
Additional comments: Silver Explorer in Mexico in the the Sierra
Madre mountains: Uruachic.
They hope to take a collection of old
mines and make them open pittable. They have some very high
from chip samples from the tunnels, ranging from 100g to 500g all the
up to around and over 1000g/ton of silver.
LEG.V LEGCF.PK (LATEEGRA RSCS) http://www.lateegra.com firstname.lastname@example.org
Michael Townsend, President Toll Free: 1-866-669-9377 Richard one of
the IR guys.
38.7 mil shares fully diluted? (Jan 7, 2004)
@ $.14/share Cdn x .79 US/Cdn = $.11 US
$4 mil MC
see also Teuton Resources Corp (TUO.V)
--involved with 7 exploration projects, one near the Eskay Creek Silver Mine, one in China.
TBLC.PK (TIMBERLINE RES) http://www.timberline-resources.com
Company contact: Bill Hoyt, director.
4.88 million shares outstanding.
$4 mil MC
The Company has acquired seven
mineral prospects to explore. These prospects are located in Nevada,
Idaho and Montana. Timberline to Lease Montana Properties to Sterling MiningThu, Aug 26 - Business Wire
The Montana property is near the property owned by Mines
Management. Silver Property: Minton Pass
project: 20 claims containing Revett formation silver/copper project in
Northern Montana. At least 5 drill holes were drilled on or near
claim group in the 1970s and 1980s. A 1971 geologic report
that mineralized outcrops of Revett quartzite containing bornite and
other copper minerals could be traced for about 1 mile along strike of
the outcrop.A short adit was driven to expose the
mineralization.Sampling results showed a stratographic thickness of
16.7 feet that averaged .7% copper and 1.78 opt silver.
Detailed work plans are under development, pending acquisition and
study of prior exploration data.
* PDO.V (PORTAL DE ORO RS) (I own shares) http://www.portalresources.net email@example.com
Phone: (604) 629-1929 Reg Advocaat
9.45 mil shares fully diluted (mid 2004) 5 mil shares owned by management!
@ $.56 Cdn x .79 US/Cdn = US $.44
$4.2 mil MC
$500k Cdn cash in the bank; To be spent on exploring two properties in Argentina, $200k each. In Argentina, in Chubut
Verde Gold/silver Project. Option
to own 100%, need about another $1 mil or less to exercise
option. Property was explored a bit, and now, will be
re-explored. Planning to do a 3000-meter reverse-circulation
drill program, to go deeper, looking for the "boiling point", hopefully a wider higher grade area..
--Possible open pit, no historic workings, 200km to the east of IMA's
properties. The property was formerly owned by Minera Andes
recently, and Pegasus, who ran out of time and money at the bottom of
the market in 1999. In Argentina, in Mendoza, San Rafael project (Gold and copper in Argentina) 700 sq. mile prop., 30 drill targets... Portal Resources Ltd.: Commencement San Rafael Reconnaissance Thursday August 19
(I own shares of PDO.V)
* AUN.V AUNFF.PK (Aurcana Corp) (I own
shares) http://www.aurcana.com/ -- NEW updated website firstname.lastname@example.org
CEO Ken Booth 604-331-9333
42.7 mil shares fully diluted
@ $..095/share Cdn x .79 US/Cdn = $.075 US
$3 mil MC
Cash $650,000 Cdn, no debt
Drilling to commence on high-grade, gold-silver targets. (in Mexico) 6 properties. Real de Catorce--Historically, more than 220 million ounces of silver was mined from five million tons of ore on this property, approx. 48 ounces of silver per ton
(I own shares of AUN.V)
ASLM.PK (AMER SILVER MINI)
2.75 million shares issued
$4 mil MC
Claim between CDE and the old Sunshine mine.
JV with CDE subsidiary untill 2017. ASLM to receive 20% net
& if silver prices reach $16.50 an ounce or above, the profit
sharing goes to 40%.
Coeur d' Alene, Idaho
BGS.V BLDGF.PK (BALLAD GLD SLVR) http://www.balladnet.com email@example.com
16.3 mil shares outstanding
@ $.19/share Cdn x .79 US/Cdn = $.15 US
$2 mil MC
Bonanza grade "grab samples" in southern Argentina near IMA.
32 oz./T gold and 22 oz./T silver grab samples.
GRG.V (GOLDEN ARROW RESC) (I own shares) http://www.tse.com/en/mediaNews/newsreleases/news7116.html firstname.lastname@example.org
Sean Hurd (800) 901 0058 (604) 687-1828 (same # as for IMR.V, which spun off Golden Arrow)
4.3 mil shares outstanding.--number from Sean Hurd.
$750,000 Cdn in the bank.
@ $.78/share Cdn x .79 US/Cdn = $.62
$3 mil MC
35 exploration properties
Argentine & Peru Property portfolio
--Spun off from IMR.V (IMA Exploration)
BBR.V BBRRF.PK (BRETT RES) http://www.bmts.bc.ca/bbr/
17.2 mil shares fully diluted
@ $.16/share Cdn x .79 US/Cdn = $.13
$2 mil MC
Yukon --grab sample of 611 g/t Ag
Argentina --samples from 31 to 5640 g/t Ag
CLZ.V (Canasil Resources Inc ) http://www.canasil.com/
22.4 mil shares fully diluted (July 2004)
@ $.16/share Cdn x .79 US/Cdn = $.13
$3 mil MC
Exploration properties in Mexico and B.C.
IPT.V IMPJF.PK (Impact Minerals) http://www.impactmin.com/
Frederick W. Davidson, President (604) 681-9501 email@example.com
12.5 mil shares fully diluted (From website, Sept. 2004, but date unknown)
@ $.27/share Cdn x .79 US/Cdn = $.21 US
$3 mil MC
IMPACT is exploring the extensive
Zacualpan Silver Mining District in central Mexico. IMPACT signed
agreements that include options on two operating mines and a processing
LSM.V LASCF.PK (Langis Silver &
Cobalt Mining Co Ltd) no web site: Patrick Sheridan Jr. President and
Secretary-Treasurer Phone: (416) 628-5936
shares. (not fully diluted)
@ $.18/share Cdn x .79 US/Cdn = $.14
$2 mil MC
CBP.V CPBMF.PK (CONS PAC BAY MIN) http://www.pacific-bay.com/
Guilford Brett, IR (604) 682-2421 11.2 mil shares outstanding (not fully diluted) (Jan 1, 2004)
@ $.13/share Cdn x .79 US/Cdn = $.10
$1 mil MC
--CBP.V is the smallest market cap silver stock that I know of. It is truly a "penny stock".
Final Category: Silver stocks FOR YOU and I TO RESEARCH further:
I strongly recommend you try to "get ahead of me," and research these
stocks to see if I left out any great values. I probably
did. I simply did not have time, or could not yet find
information (without using the telephone) on all the two key figures
needed to get the "price per oz." in the ground. You need:
1. The number of shares fully diluted x share price to get the
market cap. Then, 2., you need an estimate of the oz. in the
ground. Usually, I've been finding the oz. in the ground
resource estimates right off the company webpages, and I
get the number of shares by looking for it burried in the financial
statements like the quarterlies or annual reports, which are also
usually right on
the company webpages. Have fun researching for silver
companies, and let me know if you find any good ones, and I'll add them
to this list.
new one : helena silver. it is trading should have website soon.
UNCN.OB (UNICO INC) http://www.uncn.net/
Ray Brown, 530-873-4394
Andrew Beyer (909) 587-8072
90 mil shares (about, in June, 2004) today, unknown.
Three main properties:
Bromide-- 372,000 ounces
Silver Bell--15 mil oz silver?
Deer Trail --287,000 ounces
of gold and 27 million ounces of silver... but the lease
on the Deer Trail will expire August 31, 2005 ($3 million more total due), so they need
to raise a significant amount of money.
49 mil oz. total.
You get options and leases ...
Additional comments: Current share structure and debt situation unknown.
Mascot Silver Lead Mines MSLM.PK http://www.mascotsilver.com/
Coeur d' Alene, Idaho
"Though we have reserves and could conceivably mine them, it frankly
makes no sense to do so at current prices. ... The end of the silver
bear will bring a number of the now-dormant small companies back to
New President, still trades under $.25/share.
Silver Buckle Mines Inc (SBUM.PK)
Coeur d' Alene, Idaho
Merger Mines Corp (MERG.PK) --Leased by Sterling Mining, who is exploring their property,
and owns 14% of
2.7 mil shares outstanding. (Sept, 2004)
Coeur d' Alene, Idaho
Signal Silver --hopes to trade by next year.
Mineral Mountain Mining Company Delaine Gruber, 208-664-3544 www.minmountain.com
Coeur d' Alene, Idaho
Coeur d' Alene, Idaho
Metropolitain Mines Ltd (MEMLA.PK) --next to the Sunshine in
Coeur d' Alene, Idaho
216,559,942 Fully Diluted shares
oxus will spin off: Khandiza is a high-grade zinc, silver, copper
and lead deposit located in the Sariasia region of southeast Uzbekistan.
Silver Mountain Lead Mines Inc (SMLM.PK)
Silver Verde May Mining Co (SIVE.PK)
Silver Surprize Inc (SLSR.PK)
Standard Silver Corp (SDSI.PK)
Horn Silver Mines Co (HRNS.PK)
Andean American Mining Corp AAG.V ANMCF.PK http://www.andeanamerican.com/
--concentrates solely in Peru
Peru currently stands as the largest gold producer and second largest
copper producer in Latin America as well as the second largest silver
producer in the world.
Here are a few more stocks to look up. I don't even know if some
of these are silver miners.
Lfex - Lucky Friday Extention
Kcpm - King of pine creek
Vins - vindicator silver,
Royal Silver Mines (RSMI)
Bunker Hill-- owned by new bunker hill mining company, stockpiling ore.
Articles like this one, that present opportunities like these, can tend
to move the markets in these stocks. So, be careful when buying. If you
place any market orders at the open for any of these small stocks, you
might end up buying at prices that are significantly higher than you
intended. Limit orders might be better, but then, you run the
risk of your order
not being filled if the stock price exceeds your limit. And bid /
ask spreads such as 15% on small cap silver stocks are not
Markets can especially be moved given the wide readership on the
I've seen markets moved even by small private newsletters such as
lemetropolecafe.com and silver-investor.com (I subscribe to both). Some
of these stocks can
move up 15%, 30%, 50% or even over 100% in a single day. Thus,
can change very, very quickly. So, be careful, and re-check the numbers
the prices move up. Do your own math.
Also note, the majority of these companies have an emphasis on
silver. Most silver is produced as a by product of other mining,
like lead or zinc or copper mining. Those companies that
primarily produce other minerals are not featured in this report.
This also helps to explain and prove, that silver is undervalued.
If silver miners cannot mine silver profitably, and this report shows
that to be true, then something is wrong with the
silver price. It must go higher.
This report, and my method of valuing silver companies, depends on a
much higher price for silver than exists today to be most accurate and
most successful. If silver prices go up significantly, my picks
will do well. If silver prices remain flat, then many of my picks
should not do well.
Many people have told me that they don't get information this good even
when they sign up for annual newsletter subscriptions from others that
cost from $100 - $300.
The beauty of the internet is that it is helping knowledge to increase,
and it is a form of communication that those who commit crimes of
monetary fraud upon us cannot control. Please make the most of
it, and please forward this on to others.
Final Disclaimer: I have not received any compensation from any
public silver stock company for writing up my weekly report on "Silver
Stocks--Comparative Valuations". I own shares of the following 25 silver stocks: APM.V, CFTN.PK, IMR.V, ABI.V, CZN.TO, EXR.V CSG.TO, GRG.V, ASM.V, CMA.V,
PLE.V, PDO.V,AUN.V, EDR.V, KG.V,
MGN, CBE.V, NPG.V,
SVL.V, MMGG.OB, TM.V, OTMN.PK, FCO.TO, KRE.V, FR.V. These are
required disclaimers by the SEC: whether I've
been paid, and what I own. I believe the SEC intended this to be
a cautionary note that I own these shares, not as a recommendation or
endorsement. I reserve the right to buy or sell any stock at any
time. I believe the SEC does not require a disclosure regarding
finder's fees. Nevertheless, I receive "finder's
fees" from silver companies on occasion.