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Silver Wheaton Corp. Message Board

  • chemaes44 chemaes44 May 13, 2008 11:10 AM Flag

    The new silver reserves

    With SLW having acquired an extra 1 million ounces per year, I guess 250,000 ounces this year, and the potential for 75% of this property, SLW will be a laugher next year, laughing all the way to bank.

    Don't ask me why, I just get the feeling this is a final shakeout today before bigger things.

    I think SLW might finish positive for the day, as crazy as that sounds

    Cheer up guys & girls!


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    • SLW down a bit in Toronto.
      Not pretty, uptick on NYSE is only forex dollar weakness, no demand for SLW.

    • SLW is like a call option with a $3.90 strike. Main differences are that there is operational leverage with SLW. Any company that uses debt to finance future cash flows is employing leverage. In additon, there is no expiration date on the "SLW calls" like there is for OTC options. So yes, SLW is riskier than SLV which is riskier than physical. But with increased risk comes increased reward. From the standpoint of risk one play is only better than the other in regard to a specific investment objective. If your goal is minimal risk & potential reward then definitely avoid SLW. Physical Gold or real estate are probably the closest thing to "riskless assets " out there.

    • I don't know how you can say an in the money call has no leverage. I bought some calls at $1.25 and sold today for $2.70. I more than doubled my money, while SLW moved about 15%
      Pretty good leverage as far as I'm concerned.

    • May I interest anyone in a 4% pop within two hours?

      Anyone? Bueller?

    • that is totally false and misleading. Take off the tin foil hat and read the facts.

      I could counter and say what happens when silver soars and miners tear up their contracts with SLW? What happens if Peru or Mexico nationalize their mines?

    • What happens when Barclay's goes bankrupt and your SLV shares drop to zero? What happens when the price of physical silver sky rockets while the price of SLV drops to zero? SLV is riskier than the miners or SLW. THere is no physical silver backing's just paper derivatives.

    • Just some quick bullets (I'm swamped at work):

      - Nice thread to all participating. It is nice to see respectful, insightful dialogue for a change from varying perspectives.

      - If I understand the arguements being made "con" SLW leverage to POS due to the $3.90/oz. compensation offered for extraction, then wouldn't it be true that a miner would actually have more incentive to get that silver out now before energy costs make the extraction impossible/cost prohibitive?

      -Each mine(r) has it's own formula as to which ore is most profitable to mine based on the deals they have made for the ore(s), the concentrations of those particular ores & their locations & extraction costs. This being said, the previous arguments seem far too general in nature to be used as a measuring stick for SLW's leverage to POS since it is expanding it's supply base.
      (to be cont.)

    • Your points are well taken.

      Miners will, when ALL METAL prices are high, concentrate on previously less profitable ores to extend the life of the mine.

      And yes, the ozs mined will therefore be less as the profits however continue to roll in.

      I guess I just continue to dream of a dividend and silver prices substantially higher than today.

      Good trading

    • Not sure we are comparing apples to apples here. Looks to me like the leverage comes from the time component, that is, betting on a certain price move in a short time.

    • I prefer SLW over miners because it is lower risk

      I prefer SLV because it is lower risk over SLW with virtually the same performance.

      I prefer silver in my hand to all the above. I have way more physical than SLV.

      The Ted Butler arguments all make sense and may be true but seem to only come into play in the worst case scenario == the scenario no one wants. In that scenario, I'd rather have physical than SLV than SLW, than a miner.

      so if you are going to play the paper game and assume the Ted Butler scenario just won't pass, then own SLV. IF the Ted Butler scenario happens, you may fnd all your accounts frozen for a bank holiday. In that case, it doesn't matter if you own SLV, SLW, IBM, whatever.

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