Hopefully it'll change. Why mine your asset at a loss? First of all, Pan American Silver�like other silver producers�continues to produce silver at a loss or virtually no profit. And to make matters worse, Pan American is now hell bent on becoming the largest primary silver producer in the world�.producing more of their shareholder�s silver at a loss�or little profit. What do they expect to do�make it up on volume? Just asking.
And if the yearly silver deficit is shrinking/gone (according to the new silver �cook book� from GFMS), why is Pan American so anxious to close the gap between consumption and production that has existed for almost sixty years? Any rational intelligent silver mining executive would not produce one ounce more than they had to (at a loss) until there was a high enough price to justify it. This logic is obviously lost on Mr. Beaty�which is probably one of the reasons there has been almost a 100% senior management turnover at the company in the last couple of years.
It would be my bet that virtually every shareholder in Pan American Silver (and every other silver company for that matter) just wishes that the silver companies would spend as much time trying to bring the silver price manipulation to an end as they spend time digging our silver out of the ground at a loss. Don�t expect that question to ever show up on the yearly proxy vote that you get in the mail�but hope spring eternal that at least one company will consider their shareholder�s wishes on this issue. However, I can absolutely guarantee it won�t be coming from Pan American Silver.
While the subject of digging precious metals out of the ground at a loss is still on the table, I�m reminded of an incident that happened at the natural resource conference in New Orleans last November. Rick Rule�who may have been born at night, but it wasn�t last night�was introducing three mining company executives who were to speak on the merits of their respective firms.
During the introductions, Rick appeared to be taking great delight in admonishing mining company executives that were digging silver and gold out of the ground at a loss, and leaving nothing but a big hole in the ground and no profits for their shareholders when prices finally did rise. Then he introduced the person from the first company who was seated right beside him�his �good friend� Ross Beaty. While Rick was speaking, I thought I could see that same look on Ross�s face that I saw when I was in his office many years prior�he didn�t want to be there. The next person at the speaker�s table was the president of Silver Standard Resources, Mr. Bob Quartermain. He looked pretty happy to me; and rightly so, as all his shareholders� silver is still in the ground�which will only be mined when the price warrants it. The third executive was from Cambior, a poster child of the hedge book blow-up when the first Washington Agreement was signed.
Pan American Silver once again came to the fore on July 3, 2005 when Ross Beaty was interviewed by Paul Luke, a reporter for The Province, a British Columbia newspaper. Here are the first seven paragraphs of that story�
Silver zealots might be a little worried about Pan American Silver Corp. chairman Ross Beaty's attitude.
I see your logic and see why it is attractive but what it misses is very important.
In recent months several shortages have become apparent in the mining industry men, machinery, tires, etc. The most important one is qualified mining personel from the CEO on down. As such it is a sellers market for qualified mining personel. So if you have a company with massive resources but they are undeveloped then when it is truly time to Rock and Roll they will find it tough sledding to get those oz out of the ground. It takes time, men, money, working machinery to get a mine in production.
I certainly would prefer that they hold their silver back and wait for higher prices which would help toward that end no doubt. But the fact that they ar eready to go has greater thanis commonly known.