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Gold & Silver Mining And Exploration Stocks

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• Helix Ventures Inc (HEL.V)

• Goldcorp Inc (GG)

• Agnico Eagle Mines Ltd (AEM)

• Minefinders Corp (MFN)

• Abington Resources (ABL.V)

• Pretium Resources Inc (PVG.TO)


This past week We saw an Act of God, a rock fall and water fissure that has only happened 8 times in the past 25 years worldwide. As you can see no company is immune from the vicissitudes of nature.

The Goldex property in Quebec, where the incident happened, will be cleared of ruble and de-watered and mining will recommence from the other end of the property early next year. The write off was an accounting maneuver that eventually will benefit AEM. Do not forget Agnico-Eagle has several properties and is acquiring more and has a very low number of shares outstanding, which more easily allows for acquisitions. In addition we believe they have the best gold and silver mining and management staff in the world. We first recommended AEM in 1964 when Paul Penna was at the helm. Paul was a good friend and able operator.

No one likes to see a 25% loss in his or her shares in two days, but things happen. The correction, unfortunately accompanied by lower gold and silver prices, was way over done. We believe the stock is undervalued by $5.00 a share and presents an excellent buying opportunity. About 40% of daily share volume was shorting, which affected all gold and silver shares. A program put together by the government via the hedge funds. It is tragic we have to be subjected to market manipulation by our own government, but that is the way it is, until we can change government.

Gold and silver have begun moving back upward again, so the markets in gold and silver shares are about to move higher again.

Hold your Agnico Eagle, it is the best gold and silver miner in the world and if you can, buy to average your costs.

This was a once in a lifetime event probably not to be repeated. Take advantage of the circumstances and treat these events as another opportunity.

Incidentally, HSBC, Hong Kong Shanghai Bank Corporation had just recently recommended the shares for purchase.

Minefinders (MFN) is a gold and silver miner with 3 sites in Northern Mexico. Currently, it mines from the Dolores location, which contains 2.02 million ounces of gold and 114.52 million ounces of silver, Proven & Probable. In addition, it has 316,000 ounces of gold and 4,500,000 ounces of silver Proven & Probable at a second site, La Bolsa. Minefinders has found high grams per ton measurements in the drilling program at their third site, La Virginia.

The company is headed by an excellent management team with proven mining experience, and it shows in the production results. While a temporary slowdown in the leaching process occurred in 2011, the company has increased silver ounces mined substantially and increased sales of gold and silver ounces substantially this year.

The increased production has led to strong sales growth based off just the Dolores mine. In addition to the current leaching process at Dolores, the company is considering a local mill that would improve gold recovery rates to 90% and increase profitability per ounce. The company is projecting La Bolsa to come on strong in 2013 and has a target of 300,000 ounces (gold and gold equivalent silver) by 2015.

The company has lowered cost per ounces of gold to $450 - $500 based upon the increase in silver mining as an offset. In other words, the silver mined is used to reduce gold mining costs so the company can quote a ‘gold equivalent’ cost of production. This shouldn’t mislead investors into worrying about the differences in gold and silver costs used in production as long as the prices obtained in the spot market are higher than the reference numbers used in Minefinder’s calculations, which they should continue to be in the near future. Mining companies typically reduce cost for production to their main product and as long as the assumptions for this case are known, then investors have little to worry about in transparency of reported cost numbers.

The company has 221 million in cash and not much debt and should have solid cashflow moving forward. Minefinders is currently considering underground mining at Dolores to increase production.

Based upon P&P reserves, cost per ounce and recovery rates, current spot price, cash and expected CAPEX, I am putting a price target of $25 per share. The company is currently trading at $13.33 and I expect in the next couple of years that investors will value the company as per proven assets. In addition, as a bonus not figured into my price target, I expect the spot prices of gold and silver to rise significantly in the next few years, which will increase Minefinders' operating margins, profits, and therefore share price. 

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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