Global Partners LP Message Board

It is not a question of lying it depends what you read. The important message is how much money SSRI is going to be lost during 2013. Selling silver and not making money from producing mines just reduces your reserves at any mine that is currently producing. How would like to sell any product and not make money selling it. This is not a good business. Miners have trouble making money when the foreign jurisdictions raise taxes on production, labor asks for more money and benefits and insurance and health care goes up in cost every year.

SLw does not buy silver at $4 and sell at $22. The real cost is much higher. Look at the books!!!
They paid $2 billion for the existing contracts to acquire silver at $4. That is "2" with a billion. SLW pays the miners part of the mine capex expenditures which is then capitalized on the balance sheet of SLW. It is going to take a lot of years to make that $2 billion back after taxes paid on the revenues generated each year.

Share price is expensive if you consider that at the current price of the stock shareholders are paying $8 billion dollars for the silver contracts based upon price of the shares. That is triple what Silver Wheaton paid for the contracts.

The share price looks cheap from the high but this company said in their annual report they need $27 an ounce to break even. Even if they get $30 an ounce they only make 10% on their costs.
Mining is going to get more expensive over the future years as governments are looking for more revenue. Insurance and medical care for this industry type is expensive and only going to get more expensive.

Book value means nothing. SSRI said in the 2012 annual report that their costs including all development is $27 an ounce to produce silver. They are not able to make any money and are actually negative on every ounce of silver they are selling at this time. Even if silver gets back to $30 an ounce they are hardly making any money at SSRI.
Even at $30 an ounce silver they are only making 10% profit on each ounce of silver they sell.
In my opinion the costs of mining are going to increase as governments look for more sources of revenue. Also mining is dangerous so insurance and medical costs to these companies is going to increase.
I do not see SSRI being profitable during the next year.

T

The First Nations in the are do not want the mine. They were able to get the federal government to kill the mine after the province had approved the mine.
There is probably only a 50% chance this mine goes forward and if it does not the share price could fall 50% from here.

If it is approved there is no guarantee that this management can bring in the mine without cost overruns which would require that more shares be issued to raise money.

I have lost 50% of my equity in this position and I do not have confidence in this management to perform. If you want to add additional money to a miner which has a nice dividend try FCX.

What are talking about? This is not a real natural gas company because it is a piggy bank for the government. Russia gets about 20% of its budget from its oil and gas companies and has proposed increasing taxes 22% on the oil and gas companies and siphoning off $22 billion more a year to pay the government budget.
The government decides what is left for shareholders.

jsteveco,

Show us your intellect. Two of the largest shareholders in this company: Malone and Berkshire Hathaway each have positions of over a billion dollars and the net worth of Malone is around $20 billion and the major shareholder of Berkshire has a net worth of $50 billion.

Are you saying these two guys do not know what they are doing?

Tell us something brilliant other than the previous statement you published on this board.

I'm talking rough numbers on the acreage. Forget the acreage for a moment, CHK owns oil and gas service companies and has investments in a GE joint venture, a gas to liquids project and CLNE energy which are probably worth more than the entire SD.

Most that has purchased SD or CHK during the last few years are in a bind as the companies issued more and more shares and took on more and more debt. These are the dogs of the energy industry but I maintain that one is in worse shape than the other.
Look the CEO of each company took over $100 million in pay during a period of declining results. At least the $100 million taken by the CEO of CHK was at a company with $13 billion in market value and 15 million acres of leases, while the CEO of SD took the same kind of pay with a much smaller company.

I really appreciate your input.
With the Argentine currency in constant decline against the dollar and this company's debt denominated in U.S. dollars this is going to be tough to make money for others than management and other insiders.
Uruguay just decided to pass an agriculture tax that will get around the Supreme Court in that country. The tax will raise $60 million a year from farm land. Once you start a tax you usually raise it over the years.
Another nail in the coffin.
CRESY might be the better farm land investment due to the dividend.
thanks for the info.

Uruguay just passed a tax to tax farm land to raise $60 million a year. Once you start down that path you usually keep raising taxes as you need more money.

With the socialist regime in Argentina it just seems that this company is going to have a more difficult time. Stock markets around the globe have had a great couple of years except for this company, that says a lot to me.

You are right. I would not be surprised to see the share price hit $4 this month.

Book value means nothing when the cost to mine silver is $25+ per ounce. Silver miners just do not make much money mining silver.

Much better to invest in oil and gas and earn dividends or MLP distributions of 5-10%.

Easymoney,

I dumped this stock a couple of years ago.
Seriously, look at the performance of this energy company during the last 4 years and ask yourself what is wrong with a company that goes sideways or down for almost half a decade. Something is wrong.
I see a company that has more shares and more debt and lower share price over the last few years. All of these are negatives for most investors.
If you are going to be a cheerleader it might be wise to diversify into companies that have better performance components or elements.

Take a look at the book value of the assets purchased. Book value is around $8 1/2 per share yet investors buying at $14-16 per share are paying a premium of almost 100% over the price of those businesses when CODI acquired their interest in them. That is a hefty premium.

why buy this company when they have had difficulty making any serious money during the highest copper prices in our lifetimes over the last 3-4 years.
There are copper miners out their that have better dividends, share price appreciation, etc.
This is one of the few holdings I have that has lost me money during the last three years while 90% of my positions are up significantly over the last 3-4 years.