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Silver Wheaton Corp. Message Board

  • JohnnyCanuk JohnnyCanuk Jan 9, 2006 9:11 AM Flag

    La Copia silver flow ...

    In 2005, La Copia produced about 4 million oz of silver, along with gold of course ...

    Placer owns 50% (Kinross the other 50%) so the attributable silver to Placer is about 2 million ounces ...

    With the GG acquisition of this 50% of La Copia if the deal goes through, then SLW should pick up that 2 million annual ounces ...

    If SLW can get Kinross in on the deal, maybe SLW can get the whole 4 million annual ounces ...

    La Copia is a high cost producer and actually *lost* $2 million in Q3/05, despite the high price of gold and silver, so maybe Kinross would like to either get out of La Copia altogether and sell their 50% interest or at least take the up-front money for the silver ...

    I just thought of another possibility ...

    How about if SLW buys the Kinross 50% then GG and SLW will own the mine as a joint venture with the gold production going to GG and the silver production going to SLW ...

    Just a thought ...

    jc




    Yeeaaaaa ... !!!!

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    • Placer's share of La Coipa silver production is actually over 3 million ounces if I'm not mistaken. I really like your idea of using the most recent private placement to buy out Kinross and cutting a separate deal with pappa Goldcorp for the rest of the silver.

      http://placerdome.com/operations/chile/lacoipa.htm

      • 1 Reply to dibble_1
      • From the Q3/05 financials ...

        "At La Coipa, production for silver was 1.9 million and 0.5 million ounces for the nine and three months ended September 30, 2005, respectively, and 2.6 million and 1.2 million ounces for the comparative prior-year periods."

        The "1.9 million ounces" was for 9 months, not a full year, my bad ...

        So your "3 million" ounces is closer to reality ... and a possible "6 million ounces" if SLW can get the whole thing ...

        I'm not overly concerned at the loss there and the high cost as that may actually be deliberate ... as you are probably aware, in mining during the good times of high metal prices, the management will deliberately add lower grade ore into the mix at the same volume throughput ... this way, they can benefit from ore grades that are generally uneconomic to mine at lower metal prices ...

        Yes, it hurts immediate earnings and the stock price by processing lower overall head grades, but it can greatly extend mine life and better maximize the overall return on the deposit ...

        Good trading ...

        jc

    • "Maybe i'm getting old but i just cant comprehend what that statement means."

      Lol, and you expect me to know what I mean ... ???

      In Oct, 2004, SLW entered into a contract with Luismin to buy a minimum of 120 million ounces of silver over the following 25 years at $3.90 per ounce ...

      At that time, silver was selling at $7.00 per ounce, so why would Luismin do that ...

      The answer is that SLW paid to Luismin on Oct 15th, 2004, an amount of $37 million in "cash" **PLUS** 108 million "shares" of SLW which on that date were trading at $3.20 (all US dollar figures) and were worth about $346 million ...

      So, SLW made an **up-front payment** to Luismin of a grand total of $383 million for the right to buy the next 120 million ounces of silver from Luismin ...

      If we divide that $383 million up-front cost by the 120 million ounces, we find that SLW paid Luismin an up-front amount of $3.10 per ounce under the contract ...

      Now, take that $3.10 up-front payment and ADD the on-going $3.90 per ounce that SLW pays Luismin for each ounce delivered under the contract and we come to a total $7.00 per ounce of silver ... which is, surprise, the price of silver at the date of the contract ...

      The $3.90 per ounce that SLW pays for each ounce delivered is to cover the "production cost" to Luismin ... the $383 million up-front payment was to give Luismin their profit "now" for the right to buy all that silver at the fixed cost ...

      With silver now at $9+, SLW is making out like a bandit ...

      Hope that answers your question, the purchase of a silver flow is expensive ...

      jc

    • Thanks, i get it.

    • More fudged results? Our investment in BCM is taking a hit.

    • Are you on the right board?

      What's the problem?

    • Some problem with reported silver content.
      Just caught tail end on Rob TV

    • This is first part of NR-- I"m sure jc is on top of this---

      VANCOUVER, Jan. 10, 2006 (Canada NewsWire via COMTEX) --

      Bear Creek Mining (TSX Venture: BCM) ("Bear Creek" or the "Company") has learned that the preliminary cyanide bottle roll leaching results for the oxide mineralization at the Corani project reported to the Company by Plenge Laboratories in Lima, Peru and detailed in its news release dated 14 November,'05 contained assay errors. To confirm the earlier work performed by Plenge, samples were collected for shipment to Salt Lake City for testing at Dawson Metallurgical Laboratories. The initial Dawson test work still shows that the material responds to leaching but indicate that recoveries for oxide mineralization are on the order of 55% to 70% compared to the 75% to 95% in the preliminary report from Plenge. Testing at both labs is considered very preliminary. Further testing, including cyanide leaching and flotation, is ongoing at Dawson to determine the appropriate metallurgical process for the Corani mineralization. The metallurgical work will progress concurrently with the resource calculation being performed by SRK Consulting.

    • Interesting ...

      The difference in the testing results is a concern, of course, but this drop in price is an overreaction ...

      The metallurgy of an ore is always different in every deposit around the world and while there are basic standard methods to separate the metal from the ore, each deposit requires its own special formula, modifications to the basic methods in order to maximize the recovery percentage ...

      Sometimes these are very simple and you get 95% recovery, some are very complex and even a 50% recovery is considered good ...

      What will happen now is that the company will reevaluate the process used in the testing labs in both places and work on a modified process to increase the recovery percentage ...

      Will they be able to find a better process ... ??? Yes, I suspect they will ... the initial results looked good so there was little need to fine tune it, but now a testing error has been found and so they work on it ...

      Disappointing for the share price, of course, and a bit of a set back for the company and the project development, but this is far from over ...

      Hang in there ...

      jc

    • JC...if you were way over weight in SLW shares would U switch into TRE today as insurance just in case the BCM flu hits panicky SLW shareholders......

    • <<<hits panicky SLW shareholders....>>

      I have an unfilled order at $5.25 I will raise to $5.50 soon so by all means lets hope weak hands trade out. We did hit $5.70 for a second this morning but moved higher and now appear to be closing in the black.

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