Well, they had a negative gross margin of $1.6M in Q1 with 195,000 oz Ag-eq production, so their cash cost were in the low $40s.
However, cash costs in the infancy of a new mine are not something you use as a guidepost. The company will have double the output in Q4 (they plan to end the year at 400k oz per quarter run rate.) So costs will come down by about half as production doubles in the next 2 quarters.
The real game changer will be 2013, when the mill expansion is taking effect and output goes to 3.5M Ag-eq ozs per annum and hopefully over 4M in 2014 as mgmt is guiding. At that point, cash costs will be in line with peers, margins will be wide, and cash flows substantial.
Mgmt has been guiding since the beginning of the year that Velardena becomes cash flow positive in 2H using $1500 gold and $30 silver, so obviously cash costs will be in the $20s at worst.
Of course by that time, silver will have completed its bottoming, turning up, finish consolidating the $30-49 area, and then go to all time nominal highs.
The Treasury market, and sovereign debt in general is the biggest bubble in financial history. Gold and silver will be the winners.
Don't believe the propaganda from MSM news, or internet trolls. It is well known fact that a major US bank (owned by Buffet LOL) was paying people to trash precious metals on the internet, it is widespread and industry wide practice.
THEY HATE IT WHEN YOU PROTECT YOURSELF WITH REAL MONEY, AND THE ONLY COMPANIES THAT CAN PRODUCE REAL MONEY.
Be prudent, people are still afraid to buy and reverse the trend. Things can go lower, and JPM can short sell another 100 billion ozs of silver LOL. And a rogue trader will be blamed when the loss is realized. Regardless of whether things go lower, even substantially lower, anyone buying here will be whole and then some by next year, IMO.
i am fully aware where the price of silver(and all tangible items) is heading, I am just trying to find the best way to take advantage of this. SLW I feel is probably the best way to play it(in the silver space), but some of these actual miners have become super cheap and I want to dip my toe in here.