Key points that stuck with me: 1) Del Toro produced silver last quarter at $8.20 cash costs which is excellent and unheard of for a large new mine to come on so smoothly. Grade is noticeably better than expected. They are at 1000 tpd. Going to 2000 tod next year and eventually 4000 tpd and 6M ozs per annum.
2) La Guitarra cash costs were reduced massively just in the first 90 days since they took it over, and they have further reduced it to $12/oz at 500 tpd run rate. The eventually want add a cyanide flotation circuit make it 1500 tpd and a produce dore instead of concentrate, at lower costs. This scenario has La Guitarra producing more like 3M oz instead of current 1M.
3) La Luz will be the next mine after Del Toro, in permitting now.
4) 2014 will be a cash generation year, with FCFs accruing now that capex is largely in rear view mirror. Keith said $40M capex planned at Del Toro.
5) Company has ONLY raised $180M since public and they have generated tremendous production and cash flows out of that small amount. Company has brought a lot of money into Mexico
6) Company is purest silver producer, and has a single country focus. If you don't like silver you won't like AG. If you don't like Mexico, you won't like AG.
7) Now a senior producer although with tremendous growth unlike other seniors which are steady state producers. Company will be at 16M oz production in 2014 and a real shot to get to 20M organically with Guitarra rampup and La Luz. La Luz has decent economics and not terribly expensive to develop.
8) Money from the judgement can go a long way to develop these new projects, plus cash generation will be sufficient even at $20 silver.
9) Company has more than doubled silver production since the 2008 market takedown from 5M to 11Moz, with another 5-10M ozs in organic growth on the way in the next few years.
I was just thinking last night. ALL the gold that exists in the world today (5 billion ozs) is worth only $6T marked to market. That's less than Obama deficit spends in one 4 year term. Another way of looking at it is ALL THE GOLD IN THE WHOLE WORLD WOULDN'T EVEN PAY 40% OF THE USA NATIONAL DEBT! It's a really easy logical exercise to deduce that gold is extremely undervalued when all the gold in the entire world is less "money" than the Fed creates in one presidential term!
With silver it's EVEN MORE CRAZY. There is only 1 billion or MAYBE 2 billion ounces of refined silver in the world. Market to market that is $22B to $44B at today's price. Folks, thats only 1 to 2 weeks of QE. Do the math. You could buy every ounce of annual mine supply for about $15-16 billion. (700M ozs) That's not even 1 week of QE! Why people aren't catching on and hoarding silver more widely is beyond me, but it will eventually because FACTS ARE FACTS AND REAL MONEY IS MONEY. And silver's dual demand makes it even better than gold since it is actually used and depleted aggressively by industry in addition to its monetary demand.