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Silver Wheaton Corp. Message Board

  • yourdeadmeat69 yourdeadmeat69 Apr 30, 2011 5:41 PM Flag

    New Deals at These Levels?Randy Said No

    New Deals? At the CC Smallwood said he was waiting for silver to "stabilize." That's codespeak for "precipitously decline for a short period" so as to unnerve miners so markedly, they might seek financing the SLW way, upfront big money for mining, silver streams in payment to SLW near free.

    Things have to look dicey to silver for a mine to seek financing using that stream for upfront money.

    Remember Barnes hinting more than $4.95/ounce as payment? That's one reason Barnes voluntarily retired---all the low hanging fruit is gone, however plentiful those old trees may harvest crops already on the books. And there's another easy double for SLW in older deals, no doubt, look at the predictions on SLW's website.

    One small miner buy back its rights already. Ore miners who didn't succumb to SLW deals are patting each other on the back. No, we're waiting for a pullback to make new deals--other ways like self financing are attractive.

    That's where we get killed twice. Silver declines and the POSLW takes a hit. Then, SLW shouts out a deal. Capital out of the SLW valuation--remember, that investment hits the stock FIRST, that capital the very stuff we are looking for more dividend.

    SLW can mitigate the hit by announcing a dividend up a penny, but that is a double whammy, and why I hate dividends.

    Existing mines may feel frisky enough to ask themselves, we may mine zinc and copper, is silver a
    " byproduct or ANOTHER stream?

    Enter Joesixpac. Ever late to the table, Silver's "discovery" last February by Joe has the metal at 32 to one ratio to gold, on its way from 82 a few short months ago, parabolic in case nobody's been watching.

    It may go to 16, an older stochastic we all quote here. But it is getting lofty. Pundits Jopesixpac listens to, jerks but convincing, are crying "overbought".

    New expensive deals loom, a change in CEO, parabolic silver, these are good signs, but heady places to be. Silver mines are cringing before a large wall of worry.

    So welcome to $100 silver, at a 16 to one ratio against gold, inflation adjusted price based on peak silver 1980 prices. Maybe $125.

    But suspect higher chance for hiccups in future.

    Will it be sell in May go away time this month? Last year was a boomer for us anyway.

    Me? I hold alot of silver stock. The mini sell off Friday, with London closed, is a sign of shaky shaky to some, but stability at the high to others in the wake of Bernookie saying "inflation is a blip" at the premiere last week of "lie to me" Bernookies talk after the Fed decision. He called inflation transitory.

    TRANSITORY? $4.50 gas, prices for food are skyrocketing at 8% A YEAR, all so banks can become solvent with funny money lent to overbought housing markets?

    At 8% a year, fixed income is cut in half in buying power in NINE years, not 24.

    Endgame here? Silver $100 is assured, but SLW climbs a wall of worry, new deals, a dividend to worry about, a blip on the horizon for silver prices pick and shovel miners will turn to SLW for financing.

    It's 29 April, and I'm just sayin'.

    GLTA

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    • Yea you are probably right. I am not selling my core positiion though. Earning's next week will be great though. If one sell's, you will be putting one's self in a declining asset of cash. Near 0% short term interest rate's is a hard nut to crush!

    • YDM, two things:

      (1) "Randy" only said no deals likely until things stabilize - no mentioned was made, nor need any inference be drawn, that a rapid decline or even any decline at all from present levels would be required. Indeed, a plateau coupled with nervousness that a drop MIGHT be imminent would be all it would take to get a few base metal miners make the right kind of deal.

      (2) I do not happen to share your view that dividends are bad, and in fact, what I would like to see is the company stockpile silver rather than cash (until the cash is needed) or better yet, giving the s/h the option of distributions in silver.

      But, of course, reasonable minds are entitled to differ!

      • 2 Replies to commr51
      • Sorry, but I respectfully disagree--everything has flipflopped--the Fed is transparent and the CEO's are speaking in tongues.

        I have been all over the technicals, and all point to a plateau once we reach $73 as the next target after fifty bucks, in the POS, but we have to get there and fifty is a nominal resistance point, even if it is only $22 in 1980 dollars, when silver last hit $50 and took a dive in some months thereafter.

        Over the weekend, silver has lost a little more than a dollar on profit taking in Mumbai India, where silver has been the poor man's gold amongst that gold loving community. Gold has resurged it's dominance, and that may spin the Indians back onto the silver warpath, but not Monday IMHO.

        Not exactly a bloodbath, but not exactly a positive spin either.

        Silver fair market value in this 2011 time frame is closer to $128 peak.

        But Rand-a-la is not going to make a deal that isn't beneficial to the company, and May may be that month.

        Again, if he waits to test the bottom line at about $43 to make a mine an offer they cannot refuse, we face a 10% retraction in share price followed by 10% dilution.

        Traders will scream, holders will yawn, and wait for the next degradation of the dollar. It won't be QE3, which to some is another headwind against the price of silver, but through real inflation that Bernookie won't be able to stop because he's tied to printing as a solution.

      • I like the idea of stock piling, as well as paying monthly dividends based on the price of silver, or silver equivalent ounces such as nat gas royalty trusts. It will be interesting to see how this all plays out. They have the money and experience necessary. I also believe that they are committed to share holder value.

    • So, what does the new and improved purchase agreement look like? There are a lot of options. SLW is sitting on a boat load of cash, with lots more coming. Are the banks lining up at the doors of miners to lend? Stay tuned, same Bat time, same Bat channel.

 
SLW
26.71+0.69(+2.65%)Jul 25 4:02 PMEDT

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