Financial side of the story is clear; dividend cut would be natural here. The obstacle comes from management; they are stubborn. How long can they continue being stubborn? Who knows. It can continue long enough; this company has cash. It may happen that people, waiting on sidelines, see the situation, eventually, when dividend is cancelled, finally, but company cash got depleted to the point when risk is too high.
Actually, PAAS management is not the worst in the sector; though one should remember that average level of management in PM miners is just awful. This company has better than average operating performance; i.e. these guys can move stuff around mines. The problem is that beyond mining they behave like the most stubborn goldbugs.
Regarding possible improvements, firstly, they should cancel dividend. The whole idea of paying money out of treasury is not healthy and with worsening operating numbers it would be the most logical thing to do for any financially literate managers. Regarding operations, mothballing unprofitable mines etc, it was mentioned correctly that it is impossible to do it overnight. However, it is something that could be done in two years, for sure, and, in this respect, management wasted last two years keeping heads in sand, dreaming about sudden return of silver bull market.
Will they do something now? Firstly, it would involve admitting mistakes and, again, they are stubborn. Also, any operational changes will take time with count starting only when it really starts. Dividend can be still cancelled at once. Most likely, it would cause another drop in share price; it makes unreasonable to buy right now; that's investor perspective.
Continuing on investor perspective, bear market persists and financials worsen. It dictates continuing reduction in investor interest in this sector. It is always possible to try a quick TA trade here or there, but risks continue increasing. The whole sector is not worth of anything serious now.
Final notes: PM miners have zero control over metal price and it comes by very serious reasons. There is no chance for improvements on this issue. Also, I agree with you that "cash cost" is a ridiculous measure; it is a very old issue with this industry. By the way, "all-in" yardstick, started few years ago, quickly loses credibility too.
Good message, Silvercomments. I do not agree with all points but I support many of them. By and large, miners play silly games by promising and delivering record production at silver prices guaranteeing capital losses. What other industry could afford it?
This bear market continues for 2 years already (by the most optimistic count) and companies show no real signs of adjustment. It confirms chronic problems in corporate development; these companies are made for bull markets only.
I didn't notice any relative outperformance in AG share price comparing to other miners. Holding fraction of production on hold for a quarter won't affect market silver price at all. It is enough to say that pure silver producers deliver less silver than copper and zinc miners. However, taking operating steps, such as closing the higher-cost mines, would reduce production gradually and it could become a factor in due time.
Also, I would suggest you to think a bit before giving out estimates of other people experience or abilities. Communicating with people in careless way will just reduce your chance to hear better informed opinions.
Companies have to sell below cost because they have to make payrolls and pay vendor bills. The alternative means closing the business. Hopefully, you understand that in case business is closed, shareholder equity goes to zero.
Despite the general consideration above, PAAS and other silver miners could take few steps to address low silver price. After all, low silver price is not something new, it continues for long time already. The could consider closing the worst (higher-cost) mines and canceling dividend. It seems that most mining companies prefer to swim along hoping than metal prices will recover without any actions on their part.
Sorry, I am not a TA expert. Looking at fundamentals I don't see it as oversold, though it doesn't mean anything for short-term.
I don't think that the message meant 2013. If it did then I apologize for misunderstanding it.
However, I still believe that the message implied that silver price was below $10/Oz in early 2000s, before last bull market, and PAAS price was about the same as it is now.
That's correct: silver price was lower when PAAS was under 10 before 2005. This "discrepancy" has an explanation, but it might be a bit lengthy and/or complicated.
It would be more concise to say that present share price is under pressure because of bad earning numbers. Company has negative earnings and, if dividend /buyback taken into consideration, negative cash flow. It is not an exception, all silver miners are in the same situation and so all of them have depressed share price, in many case similar to numbers predating last bull market.