Edmund_You best be careful...your liable to become a "New Rocky" and having everyone expecting your quarterly earning estimates two weeks prior to Earnings : )
Good job on your estimates. Hope you are right.
Edmond_If I am reading your numbers correctly, (63 grams per ton?) that would be 10 times the current grade of 0.2 ounce per ton. 63 grams is ~2.0 ounces. Maybe the Jaulin grade is 6.3 oz/ton?
Thanks for your hard corp investigation...and willingness to share your findings.
"Our upgrade of CDE reflects the company's relative financial leverage and valuation in a rising price environment, as well as operating improvements demonstrated over the last few quarters. CDE's net debt/equity remains the highest of the group, which provides financial leverage in a rising price environment (with the risk being that the reverse is also true). Though CDE's share prices have risen 201% year to date, likely due to the company's leverage, we also estimate that the market has yet to fully price in the improvements to operating margins that the company has demonstrated over the last two years, with "sustaining margins" (our calculation of AISC/revenue) improving from 3% in 2014 to 20% in 2016E.
We also estimate the market has not yet fully priced in the royalty-to-stream switch at Palmarejo beginning in Q3/16, which reduces annual royalty payments from $40M in 2015 to $13M in 2017E. We estimate CDE's shares are still trading at 1.2x NAV (BMO prices) compared to the peer group at 1.7x NAV. At spot prices, CDE shares are trading at 1.3x NAV compared to the peer group at 2.3x NAV."
Good to see coverage of The Frqnco deal.
WG_ If you have a better way to protect gains in the event that we have a serous silver smack down, please share your ideas.Or, are you just blowing smoke?
Sandy_ Good followup with the numbers to back it up. The higher the price of silver goes, the less important is the low cost of initial price disparity between the two types of silver production.
Ed_Thanks. Original thoughts on streamers that I haven't seen anybody else postulate. Yes, my June 17 calls for both HL and CDE are doing well. I have 10 contracts of HL with a strike of $2.50. Paid $170 for them...current value is $1,450.
The CDE doing even better. Paid $170 for 5 contracts and they are valued today at $2,010. I also bought 5 contracts for a HL call at strike of f $3.50 for Jan. 2017. Those are now valued at $465. Paid $170 for those too. Your caution to me to not get greedy is ringing in my mind. Might need to know how to place puts for downside protection?. Don't want to make this a two some exchange between us but it might be of interest to someone who is wondering if is complex to "play" the game without risking much cash. By the time Jan next year rolls around it would not be out of the realm to see HL shares at $7.
Edmund_The sale of the NSRs doesn't concern me. I think that the streaming model looses steam as we (finally) see the PM bull become entrenched. No question, it is a winner when miners can't make a profit and unable to secure standard funding sources for necessary development. It begins to fall apart when prices allow for strong earnings by miners, As we have noted before, after reaching profitability, silver miners make the same incremental bottom-line gains as do the streamers. When Coeur makes that final step and enters the profitable level, we should see the company shares move at an ounce per ounce compared to the streamers
Where we are now, the jump that Silver Wheaton got on the miners while they could buy NSRs for silver equivalent ounces at $4.00 is easily seen when comparing the market caps of SLV and Coeur. That would be $7.5bilion compared to $1.08billion for Coeur.....a factor of more than 7 times. Is this disparity due to production? No, SLVs annual production is is projected to be up to 55Moz in 2019. Coeur is more than 1/2 that for this year. In sum, I think the companies employing this concept have done well during this horrendous metal bashing period but may very well seen their best times. Does Coeur smell a coming change that will make their streams less valuable than they currently are?
Edmund_Your silver and gold prices seem as good a bet as I could come up with. Much of it rests on when the most PMs were sold. If most was sold in the first 1/2 of the quarter...bad news. If sold mostly in he second month and one-half, good news. Regardless, we will need assistance from a bull PM and share market to get us through this and the second quarter. I probably should sell my CDE $3.00 June calls. I paid $0.25 each and see they were sitting at $3.02 yesterday. That looks like better than a 10 bagger. Problem is, You never told me how to sell them. Thanks for your continued supply of good stuff.
Well, things have become more jumbled with LENR progress with announcement of Rossi law suit. He has filed against against his prime partner, Industrial Heat for failure to make a required $90million payment and infringement of IP agreements. The crux of the dispute seems to be disagreement over the results of the near year long test run of a commercial grade Low Energy Nuclear Reaction unit. Failure of IH to make payment for a successful run of the devise. Both companies seem to agree that the test results have been submitted in a report only available to the subjects. Rossi reads it to say the unit was a resounding success while IH calls it just the opposite. Also, Rossi claims that IH has sold his IP information to LENR competitors of the Ecat. There is widespread fear within the Ecat support group that this may bury the results of the long awaited test. A bright spot (for Rossi folks) is the documented cases of IH pumping the LENR concept to potential investors.This turnaround in LENR, ready or not could well subject the company of fraud. Guess we will see. Hope everybody is having a good weekend.
Edmond_I felt about the same way at that CDE $1.65 level. After the repeated beatings on all my PMs, I had only a little bit of cash. So, I dug up $125 to buy a 500 share call at a $3.00 strike price. That transaction sets with a price tag of $1,500 at this time. Thanks for putting me on to using options sparingly to avoid being totally left out of a strong move. Now, if HL does a gitty-up, I will feel a little better about my piddly account. When the silver price makes the next big run, it won't take a lot of shares of good companies to make it all better.