Ed_Thanks for the advise. I would like to place puts as well as calls on a number of companies but just don't have enough cash to do much. The margin man is still chasing me. I sense that the big breakout in PMs is close and wouldn't hesitate putting on some far out of the money calls...if I had the cash.
Ed_Good find on the Spring Valley thing...even better speculation that with PZG holders becoming CDE holders they might be inclined to give Coeur a sweet deal.
snook_ I don't recall a water problem with the Sunshine. I recall that they had rung up a sizable debt by converting from tracked ore carriers to wheeled electrical driven (big battery) units. Also, they worked on a come as you go basis and the main ore vein they were in at the time has squeezed down hurting whatever profit they were making with $4.00 silver. Hecla may have bit the bullet at that time had they not invested in a clay company that was quite profitable and was sold for ~$60??million to carry them through the bad price time-frame. That is all I remember. I do agree with you that there is serious concern when dealing with big banks. Convertibles result in massive shorts and possibility of being bankrupted.
snook_Your history doesn't jive with mine...sure you aren't thinking of Hecla? In ~2001 Sunshine Mines was trying to raise $40 million to build Pitiquites (sp?) now SSRI's Argentina 8 million plus silver mine. There was a lot of noise about how the banks knived to destroy Sun's effort to raise that money. I felt the pain as the company went bankrupt.
Hope_ I have looked to see what percentage the silver production is as factored into the gold production as gold equivalent. No luck, I hope that it is relatively large so as to justify (in my mind) why GoldCorp would sell a low cost mine when everybody is looking for profitable mines. Any body have a figure for that ratio?
Bobhal_ The real silver dollars (0.77 ounces of pure silver) are doing quite well on Ebay. Even the common Peace dollars are selling for over $20. For dates other than the most common 1922/1923 range are bringing much higher premiums. I am used to seeing these go for only a dollar or so above the silver value. Still, I am going to keep mine.
fit mary_ good list of options and good points by Kor..35. As an owner, I wold go with a share buy back at this point, Hecla is safe for earnings in the future and doesn't need to worry about covering debt...like most silvers. Share price is as low as it will be for a long..long time, makes shares a steal.
Ed_The answer for me was reading carefully the PGZ news releases put out in Oct., Nov., and Dec. We are so used to seeing over hyped news from explorers that (at least for me) these type of comments roll of our back like water on a ducks back. In this case with Coeur in the true know, they are telling me by offering up a 1/3 of the company for Miguel, this is the real deal and more than likely a 100% replacement for the original Palmarejo. Time (short?) will tell if this time the company got it right.
Ed_Glad I hit close. I am betting on the good results being for Dana.This is what PGZ had to say on Oct. 15:
"October 15, 2014 - Paramount Gold and Silver Corp. (NYSE/TSX:PZG) on the first drill hole of the exploration program recently initiated on its 100%-owned San Miguel Project in northern Mexico has discovered a new high grade precious metals structure called Dana. The new discovery runs about 500 meters west of the Don Ese structure and parallel to it, and has a strike length potential on Paramount ground of about one kilometer. Don Ese is the highest grade and most valuable gold/silver deposit at San Miguel.
The first hole drilled into Dana returned multiple intercepts of high grade silver with gold including 3.6 meters of 157.1 grams per tonne of silver (g/T) and 0.40 g/T of gold, with some assays up to 659 g/T of silver (21 ozs per ton) and 1.18 g/T gold.
Commenting on the discovery, Paramount CEO Christopher Crupi said that the Dana discovery looks exactly like Don Ese in its early stages of exploration. “Like Don Ese, Dana is relatively narrow at the surface but it quickly opens up at depth. Our first hole at Dana intersected an impressive 28 meters of hydrothermal breccia, quartz stock work and quartz veins containing precious metal mineralization. This hole is still high in the system and it’s therefore silver rich, similar to Don Ese at the same elevation. We expect Dana to generate considerably higher gold values as we get deeper into the system, just as we found at Don Ese.” said Crupi...."
Could we be looking at a quick doubling of the Miguel resources? 10+ years life of mine?
The location of Dana favors early development from underground in parallel with Don Ese. “We
good guess as to Ed's teaser. I tend to think that the answer is a little closer in time and tied to the PGZ deal. Looking at resent News Releases I see several possible bomb shells.
On Oct. 23, this year Paramount announced that they had discovered a parallel vein to the Don Ese that might mimic it. The Dana Vein has characteristics similar to the earlier discovery. Preliminary drill resutts show very high grade.
On November 19 they announced discovery of the San Francisco surface surface sub deposits that lend themselves to bulk mining and of a very high grades given the type type of deposit.
On Dec. 10 they again confirmed DANA was real and high potential. They also said drilling on both the Don Ese and and Dana will continue through the winter:
"Paramount is currently drilling the Don Ese and Dana structures with three core rigs as part of its program of moving the San Miguel Project towards a Pre-Feasibility Study. Don Ese and the closely related, parallel Dana are located about 800 meters from Coeur Mining Inc.’s Guadalupe deposit on its flagship Palmarejo Project. Don Ese, Dana and Guadalupe are similar occurrences which appear to be parts of the same mineralizing system."
Of course, the buy out of San Miguel was announced on Dec. 17.
Being that it is to Paramont's advantage (Coeur share holder) to enhance the value of Miguel, I would expect them to continue with drill results news releases. The prospect of another Don Ese is pretty exciting to me. As I am sure you have noted, the reserves at Miguel do not currently match up to the 10 year (expanded) life of mine for Palmarejo that we want to see. I also like the idea of possibly surface mining San Francisco and hauling ore to the mill to get a head start on getting at un-hedged (Franco) ore.
Ed _And a merry one right back to you. Yes, in headier days, most will be forgotten and perhaps some will say...what a deal! Not having looked at the large tech report, I do remember PGZ putting out positive news releases on San M before they actually found Ese. I suspect that once silver gets up where it should be there will be multi millions of tons of ore that will become reserves at the "old" Palo as well as new reserves at Miguel. Thanks for all the information you provide the Board.
Ed_ I have to hold my nose and agree with you. On the face of it, giving a developer 1/3 of a large company with 4 producing mines and a silver equivalent production of ~30 million ounces, is outrageous. Especially when that company has a silver mine in the waiting (La Preciosa) that has over twice the resources of San Miguel. BUT, Coeur needs a stable Palmarejo to carry the company through this period of low PM prices...silver in particular. We simply do not know when we will get the breakout. If in 6 months we are looking at $1,500 gold and $30 silver, management will have a red face and we will look back with regret...Could that damn Bad Luck factor come back to bite again.
You are right though it, saying that it was precisely the low CDE share value that gave Paramount the incentive. For some reason they seem to think Miguel is worth 1/2 $billion. I bet that they would have laughed at a $200 million offer. Even if not so, giving up that cash cushion would have put Coeur in a perilous position. At least we should be pleased that the market has given the deal it's approval assuming Coeur's recent high share trade at price movement equal or better than the peers. Time will tell.
Also, I notice that CDE has an unusually large number (nearly 11,000) of option calls with a strike of $6.00 for expiration on Jan 17. Seems Someone with some cash is pretty optimistic that we will see a substantially higher share price in the next month. I need to look for a similar pattern with the other silvers that showed huge volume today. Should get and idea from that if the big guy(s) are looking for a silver move up or if this speculation is unique to Coeur.
Ed_ I don't see any comments on Coeur volume. 21.5 million traded, WOW, almost 10x average of last month or so. Other silvers up in a similar fashion. I am amazed that they are green with that much activity. Is this the result of option expiry? A battle royal between the longs and shorts?
If one believes Coeur is paying too much in shares compared with how much their CDE shares "should " be worth, why not buy some PZG shares. You will get most of your cost back in Coeur shares when the deal is done, plus the Sleeper and et al other properties to be spun-off . PZG is still historically cheap even at today's ~$ 0.85 price. It was $1.40 as recently as last August before the latest very positive drill results came out for the Don Ese vain.
Geo_ You are absolutely correct. Paul has it right. This is the price we pay for having no long term memory in the USA. I remember the days we in Spokane lived in an atmosphere of being one flipped switch, intentional or not of being obliterated in a nano second. The only thing that has changed is that Russian nukes are more accurate and less are needed to wipe out the US and humanity in general. Putin's response to this bill was to say he was sick and tired of the lies and distortions by the West and warned that Russia does not bluff or paint foolish red lines that can't be supported. Dangerous times!
Mdobilman_ Agree with your conclusion that the US is out or nearly out of gold to honor the SA agreement...but think you are wrong in the statement that :"USA is now self-sufficient in oil". The figures for 2013 show US consumption of ~19 million barrels per day and production of only ~9 million bpd. On top of that, it is generally accepted that the high cost for tight oil production growth needs a barrel price of ~$75, AND continued low interest rates for the hand to mouth funding being used to finance drilling activity.
Edd_ Great history. The ore grade for portions of Martha explains why Coeur could mine ore and send it straight to their Cerro Bayo mill in Chile. The Martha mill must have been built to extract the 11 ounce ore once the supper rich ore was exhausted.
I don't remember, is Lejano saddled t up next to San Joaquin?
Vcar_ I agree with what you say but question if there are any objective information sources out there. All I see are those using TA chanting sell, sell, sell and those fundamentalists who see the bottom basically in and it is time to buy (PM shares), Personally, I smell a reversal for Coeur (not the first time) is in the works. Just seems like there are a number of issues up in the air that might support an increase in the price of silver. Off hand that would include in no particular order:
-the Swiss referendum Nov. 30.
- non-USA central banks printing increases (Japan)
-Silver Eagle mint selling moratorium/two million sold in one day used up their year end surplus
-record (all time) tech fund short position in the COMEX
-likelihood that the new Congressional leadership will shorty step up costly war efforts
- Silver prices any lower than now is more detrimental than beneficial for big banks an/or US government
-Speed that COMEX silver is being moved in and out of the vaults indicating hand to mouth availability
-Stock prices so low that shorts have little to profit from and huge risk in the event of a price surge
-Renewed and intensified fighting in Ukraine and the danger of nuclear involvement might finally sink in
-China had a $36 billion trade surplus with the US in September...and they are not buying US Treasuries
A strong YES to your Rocky comment. He is an exceptional asset to this Board.