Tahoe's market cap is a full $1B greater than PAAS now. No surprise as they will have the lowest costs in the sector and a humungous long life mine, and its almost in production. They can also have decent earnings in a low silver environment. They should buy PAAS now. It would be less than 50% dilution, but they would be 50M+ ozs producer not a 20M oz producer. Rationalize some of the assets, use PAAS cash hoard, and then go on a junior small cap buying spree and bolt on a few more mines and become a 70-80M oz producer and the unabashed leader of the space. The Tahoe guys ran Glamis and orchestrated a terrific growth ramp up and the stock went to the stars.
Sentiment: Strong Buy
They also settled the claims Rye Gold had staked for a paltry amount. CDE is more leveraged to the gold price than say AG or even PAAS. Kensington is really a drag on them with $1300 gold although they are working to get costs down. If and when the gold price strength is restored, their operating margins will be much better as it's quite a large gold operation there (for a silver company anyway.) If gold went to $2000s Kensington alone would throw off $2 per share cash flow for CDE, but right now not so much lol. CDE is a deep discount to AG now, which is understandable as AG has none of CDE's issues (lack of mgmt credibility, lack of strong y-o-y organic growth, high cost issues at certain mines, nationalization issue at certain mine (bolivia), no debt issues, etc.
Why? Because 100% of nothing is worth less than 1% of something! LOL Think about it.
Take it out of the system and out of harm's way. How much silver should I own? I dunno, but it seems like everything is overvalued, stocks/bonds. Money in the bank has a negative return and you might get hit with a huge loss. Let's see, gold and silver barely levitating over their "all-in" mining costs industry wide.... Hmmm. Do we really thinking buying power of the dollar will increase with stock and bond digital money bubbles blowing up?
Sentiment: Strong Sell
Booya!!! The miracle herb stops cancer DEAD IN IT'S TRACKS. The truth is out there, the cat is out of the bag. Today's Sickcare System is dysfunctional, harmful, and a plague on society. There is no need to take toxic drugs, radiation, and chemo, and then DIE as a result. Mother Nature holds all the keys. Your Sickcare system even poisons your children and grandchildren, maiming them for life as we speak, and the silence and acquiescence continues...
It will definitely be a hostile bid because surely mgmt could never save face at any price in the single digits. How could any major resist buying 1M ozs of production, a 20M+ oz resource base, a large cash position, a profitable, stable long life niobium asset, large ownership position in several junior exploration plays, diversified asset base... and IAG would also bring a lot of technical talent to any major, who are "labor poor" due to the shrinking workforce of competent technical personnel. I think it will happen as soon as the majors get another 10-20% pop in their share prices.
IAG's costs are higher than industry average, but not much worse than what most majors are working with. They could easily scale down the operations during a low gold price environment and get costs down more. An extra 900k-1M ozs of current production would be 20% boost to Newmont. It would be over 30% boost for Kinross. It would increase Yamana's production by 75%. Gold Fields after spinning off Sibanye could use more production and cash flow. Agnico doesn't produce much more gold than IAG, but their market cap is 3x higher. Many possibilities of accretive transactions.
Looking at transactions where IAG could be the buyer, I notice other African peers like Endeavour are set to mine over 400k ozs a year at favorable cash costs and only have a $300M market cap and EV of $600M. This could increase IAG's production by about 50% and they could do it with less than 20% stock dilution. Combined cash costs would also drop and margins increase. Teranga has 200k+ ozs production in Senegal and is making money and their stock is worth squat now. They have a little debt, but it's a pittance to a company the size of IAG. There's a lot of multimillion oz targets all over the place. A good bid for IAG would be a company that has a low cost long life cash flowing mine and perhaps a flagship development stage asset .
PAAS has fallen so low, they are almost a hostile takeover target for companies like TAHO AG or CDE that were once much smaller in comparison. i think they should merge. Combine cash and cash flow, rationalize the asset base, use the stock later for bolt on deals on dirt cheap juniors when the prices recover. Being a 50M oz+ producer when silver rises again would be very exciting. Pool the cash flows to increase development, to later lead to increased earnings and dividends.
And they don't think it is manipulation when they drop 400 tons of gold in a single plop in the illiquid aftermarkets, like when gold was $1600 and they hammered it down to $1300s in 3 days time and triggered every stop on the books!
The regulators work for the owners of the banks. All manipulations fail. In this case, artificial price controls will result in shortages, as the price is just too cheap, barely above all-in mining costs, and it will start to disappear. Just like in places like Venezuela, when the govt uses price controls and sets prices too low, the goods start to disappear, and they go to places that will pay full value for it.
It only takes a couple hundred million ozs of physical silver buying to completely throw the market off balance. I'm not talking about people buying Monster Boxes, I'm talking about institutions and high net worth entities buying warehouse stacks of silver and privately vaulting it.
I believe silver is incredibly cheap at $22. Can it be under $20 again next month, possible, but not certain. What is certain is it will be $50 and beyond that is written in stone. If you had a million dollars you could buy 1 TON of silver and still have 300 grand laying around! 500 ounces of silver bought a nice house in most of the USA in 1980. I'm pretty sure a ton of silver could buy DOZENS and DOZENS of houses in the future. I'd rather have a ton of silver than a $700k jumbo mortgage that's for sure. LOL
What are you people talking about?!? Mgmt just announced a few days ago that they had completely retired the forward contracts. If silver is going back to new highs I don't think many silver miners will make you more money as they are bringing 30M Ag-equivalent ozs to the market. 4%+ to wait with the 50 cent dividend. There are other silvers that I think will do more percentage wise if silver shoots up, but this one is a good conservative steady play regardless of whether silver rises immediately or not until later.
I do agree with gnik about physical silver being the ultimate play, and the safest, if you hold it privately.
Sentiment: Strong Buy
IAG is dirt cheap for sure now, and can still generate profits despite the hammering gold has taken, and offers a leading dividend in the space. I was checking out a company called Endeavour. Endeavor bought Avion Gold last year for chump change after their stock had been pounded down 75%. Avion had a 100,000-130,000 oz mine (Tabakoto in Mali) and a multimillion oz deposit (Houde in Burkina Faso I think.) Endeavour had 2 100k oz mines and a third 100k oz mine in the pipeline (it will come online next year.) This is a 400k+ oz producer with 4 mines in 4 countries. It has a 5th project that could become another large mine and something like 9-10M ozs in all categories. The stock is under 1 dollar and has a little over 400M shares. Do the math. The balance sheet is leveraged, but not disastrous. They have ~$300M debt with a cash position of $50-100M. It's not a problem for them because their cash costs are in the $600s and total all in costs are around $1020 and dropping, so there is a healthy cash margin and cash flow for Endeavour. All of us gold bugs have been damaged in many ways. It's time for the tables to turn. Just like 2008-9 we will rise from the ashes like Phoenix. I tend to think barring any disasters a company that is digging well over 400k ozs per year for a minimum $300-400 cash margin will do pretty well.
IAG shorts are going to burn because if you haven't sold by now, you can trust the true believers are the only ones left. This stock is attractive and only gets more attractive if the price drops more. You can bet your white #$%$ that majors are looking at IAG and licking their chops at being able to take 1 million ozs of current production, a large #$%$et base, and healthy balance sheet for the same price as when gold was half this price. IAG would be over 20% production increase for Newmont and they could easily digest them at this price. IAG could be bought by Kinross and they'd jump up to Newmont size
Sentiment: Strong Buy
Dolores isn't worth $1.8B anymore, but it's still worth a pretty penny and you'd think with all the other silver assets that it's pretty durn cheap with such a large cash balance and pristine balance sheet. Things will look a lot different when silver has a $3# handle again, which could happen in a short time frame. If silver pulls back a few dollars in order to retest it might be a fantastic time to fill a low priced order. There is zero chance of $18-25US being the long term price for silver. PAAS really did it's investors a favor paying a dividend that actually makes it worthwhile to hold the stock. There's a company I like operating in Mexico and with a new silver mine coming online in Texas that has been beaten down 75-90% that I think PAAS should buy and get near term 5-6M oz bump in silver production. They could do a cash deal with no dilution. It would really push PAAS beyond CDE and AG who are nipping at PAAS heels on the production side. PAAS is really cheap. If Tahoe were smart, they'd leverage that huge market cap and buy PAAS with stock and pay a decent premium. They'd instantly be 50M+ oz silver senior. Even though PAAS mines are higher cost, the blended average cash cost for the company would still be in or near the bottom quartile I would think. PAAS has a LOT of cash. Do something. Don't just sit it out and wait while the market has mad A LONG TERM BOTTOM. Buy low. Not at market tops, as so many majors have learned the hard way. This logic applies to individual investors as well. LOL
Sentiment: Strong Buy