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speedybure (< 20)

Add This Core Position – Deep Value In Silver Mining



September 01, 2011 – Comments (85) | RELATED TICKERS: SVMLF , AG , SLW

Silvercorp – Silvercorp has and continued to remain one of my core holdings to hold throughout the cycle and it is currently priced to perfection. It has been a serial outperformer, making it hard to recommend despite my conviction in this company, patience has finally paid off, at least for those who have yet to gain exposure to Silvercorp (if it fits ones investment profile). While Silvercorp continues to fire on all cyclinder it has suffered from “the baby being thrown out with the bathwater”,  falling prey to a weak equity market augmented by  the Sino-Forest Debacle (which caused some investors to avoid Chinese stocks), knocking the price down below $8 just days ago. Silvercorp has been able to take advantage of this via repurchasing 10m shares in the open market at what views as bargain basement prices. As of the second week of July, Silvercorp has completed just over 20% of this buyback with more likely to have already taken place in the $8’s. This will allow Silvercorp to re-issue these shares when they start to trade closer to fair value, a strong sign in the mining industry (rare to see this unlike mainstream US stocks who do it for the press release).

Silvercorp has been one of the best stories among primary silver producers, mainly due to the strong management team who have a very keen eye for high quality properties with plenty of exploration upside which they have illustrated over the years. I consider Silvercorp one of the best explorers among current producers with expectations that the 2 recently acquired companies, including the XBG project, will add material long term growth to what is already an excellent production growth profile.

Management is and always will be the most important attribute in any great company but doesn’t always equate to a good investment. In this case you have both given the unwarranted slide from $16/share to approximately $8.50 as this is written. While those who criticize Silvercorp for the “just 70%” of revenue derived from silver, one needs to also take into account its negative cash costs which are estimated to be approximately -$6.20 for the FY 2012 (which began a few months ago). Silvercorp also happens to be one of the best ways to play China as its flagship operations include the the Ying mining district in Henan province, which is comprised of four mines and set to produce 5.6m oz silver in 2012 and 4k oz gold. Other growth assets include the GC project and BYP, the latter which has substantial exploration upside. Complementing its China operations include the advanced stage silvertip project in B.C

The XBG project is located on the same regional mineralization belt as the Ying mining camp, which also happens to be one of the most lucrative in China. To date, exploration has identified 12 primary silver veins (with gold, lead and zinc bi-product) and 3 gold veins. With several of these veins having similar mineralization relative to Ying, the prospects of XBG being a medium-large growth driver in the future look bright. With one of the strongest balance sheets among primary silver producers relative to capitalization, Silvercorp has the means to make further land or company acquisitions. Following the end of the share buyback program and the approximate 10.4m spent on acquisitions, Silvercorp should still in excess of 160m in cash and no debt.  

I will add a DCF which yields $18+ using a 10% discount rate & $40 silver 

85 Comments – Post Your Own

#1) On September 01, 2011 at 4:23 PM, SN3165 (< 20) wrote:

Speedy quick unrelated question - I know youlike the '17 new gold warrants but what about the "B" (April 2012 expiration) Currently just .10, Strike of $15.  leverage approx. 13x. Obviously more risky but may be worth a small play?

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#2) On September 01, 2011 at 4:31 PM, BillyTG (29.42) wrote:

Wow, incredible timing.  About 4 hours ago, I wrote a bunch of puts on SVM (september 2011 $7 puts, going for $.45), after seeing that very trade mentioned on Terd Ferguson's website.  Looked like a no-brainer risk-reward trade.  In a few weeks I'll score 100% profit on the trade, or have to buy SVM for $6.55, a very deep discount to its current price.

speedy, what's your take on HL and PAAS?

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#3) On September 01, 2011 at 4:33 PM, speedybure (< 20) wrote:

Thats up to you. I can just tell you I returned 50% on the 17' just in August

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#4) On September 01, 2011 at 4:45 PM, speedybure (< 20) wrote:

I like PAAS but prefer the likes of an SVM or AXU here. 

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#5) On September 01, 2011 at 6:30 PM, XMFSinchiruna (26.44) wrote:

+1 I liked their Silvertip purchase as well.

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#6) On September 01, 2011 at 6:32 PM, XMFSinchiruna (26.44) wrote:

Hey speedy,

Not sure you were aware you appeared to get two CAPS members confused in the comments section to my article.

The ludicrously named "goldminingXpert" was the individual that penned the retracted SA piece on GPL, not the hsolliday member you directed your question to.

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#7) On September 01, 2011 at 6:44 PM, speedybure (< 20) wrote:

Oh okay, I was actually asking if that was the person as opposed to saying it. I read the article and it is really why I have really cooled down the writing for SA. Well that and taking a job as the portfolio strategist for a new hedge fund 100% focused on PM's except for SND, which I;m sure you gathered I;m a huge fan off and have a hefty stake. I know we were both pushing the royalties and streamers such as SLW, IRC, GLW, FNV, RGLD, SNDXF, etc. I never got your thoughts on SND. I just see a huge competitive advantage being the first to the game and a longer time to accumulate streams before its respective commidities take off. They have now finished 10 streams, the last two being absolutely spectacular. I know this may take another year to garner attention, this is the ideal entry point IMO. 

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#8) On September 01, 2011 at 6:49 PM, mihrtrn (< 20) wrote:

Hedge Fund must have their people working OT bashing SVM on Yahoo message board.

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#9) On September 01, 2011 at 7:02 PM, speedybure (< 20) wrote:

I love every minute of it. The shorts will end up eating crow. 

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#10) On September 01, 2011 at 8:00 PM, mihrtrn (< 20) wrote:

Thanks for this excellent article. Chris and yourself do a great job !!!   Keep up the GREAT WORK !!!!. How come this excellent article doesn't appear on Yahoo ? The Seeking Alpha negative BS on the options is there every day. Also, does that Seeking Alpha guy with the negative story on the options disclose his positions ??? Thanks again !!!!!!!  Let's get some more of these SVM articles which are TRUTHFUL !!!!

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#11) On September 01, 2011 at 8:18 PM, Frankydontfailme (28.77) wrote:

Hey speedy, if you have time I hope you continue to write blogs here. I always looked you up first at SA. I would highly recommend people looking up author "hyperinflation" at for some great articles.

Speedybure, and Sinchurina are a fatal 1,2.

Heck, half my DD is finding miner's that you guys agree on.  

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#12) On September 02, 2011 at 7:15 AM, jwebbzor (< 20) wrote:

Haha Frankydontfailme, I totally agree. I've spent time doing my own DD on these miners, but I don't understand the mining companies like TMFSinchurina and speedybure. I probably trust their judgement more than my own.

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#13) On September 02, 2011 at 8:17 AM, djemonk (< 20) wrote:

I did a quick DCF analysis and came out with this being slightly overvalued at current share price.

What are you looking at that gives you a 125% higher valuation than current?  I used a 9% discount rate and assumed 10% growth in FCF consistently for 10 years.  Even bumping that up to 20 years leads to less than a 10% margin of safety, in my estimation.  I also assumed that the entire company could be instantly liquidated for cash at the end in 2011 dollars.

Basically, i made some pretty optimistic assumptions and it still looks fairly valued at best. 

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#14) On September 02, 2011 at 8:19 AM, djemonk (< 20) wrote:

What am I missing?

I guess that's my question.  I'm a value investor, and you guys know miners better than I do and you're saying this is undervalued.  I'm probably missing something and looking to understand what it is.

Are you guys expecting a higher growth rate of FCF? 

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#15) On September 02, 2011 at 9:13 AM, mhy729 (30.27) wrote:

Silvercorp Notes Large Short Position in Stock and Receipt of an Anonymous Letter Attempting to Discredit the Company and Manipulate the Share Price

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#16) On September 02, 2011 at 9:27 AM, goldminingXpert (28.71) wrote:

I have been waiting for the fraud allegations to go mainstream. Been short for awhile and waiting for the dirty laundry to go public.

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#17) On September 02, 2011 at 9:40 AM, XMFSinchiruna (26.44) wrote:


I assume you're referring to the gold vehicle SNDXF?

I love the SNDXF story, and you have to like that management knows the drill from prior involvement with SLW. I merely grew a bit concerned about valuation earlier this year.

I bought a decent-sized chunk near $0.80 at the beginning of the year (in fact I think one of your blogs or articles may have been the final catalyst there), but I sold the entire stake over $1.30 this summer. Part of the reason was that I was in cash-generation mode more generally, but my valuation-related concerns made SNDXF an easy selection at the time.

The following post summarizes my thinking on the matter as of early July. But please, by all means, convince me the stock is not richly valued, as I would love to be able to justify some exposure since I believe in the story. :)

"I like Sandstorm very much, and own a bit, but at $421m for attributable M&I resources (including reserves) of 470k oz (market value $705m), I find the shares richly valued at present (mcap =50% MVM&IR). I seek the cheapest gold ounces available, and even after accounting for exploration upside at several of those fine properties, the value proposition just isn't deep enough to earn a spot in my top 10 just now."

"By comparison, SLW attirbutable M&I (including reserves) = 1.3B ounces silver X $35 = MVM&IR $45.85. mcap of $12.2B is only 26.6% of that, so based upon resource valuation alone I view SLW as approx. twice the bargain of Sandstorm."

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#18) On September 02, 2011 at 9:44 AM, goldminingXpert (28.71) wrote:

SAIC filings are available for around a hundred bucks. You simply cannot invest in a Chinese company without making sure its SAIC filings match its SEC filings.

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#19) On September 02, 2011 at 10:18 AM, speedybure (< 20) wrote:


 You are very correct using that measurment but have you taken a close look at its properties in terms of likely upside potential? I would almost guarantee Aurizona and Black Fox end up becoming 20+ yr mines. Aurizona has been releasing great drill holes on after another showing the potential and I don't really need to say anything to you on Black Fox + Grey fox/pike. Mentanor is also showing promise for a 10+ mine life as the latest 43-101 was done by another company yrs ago and in my opinion doesn't do it justice. St. Elena already has plans for an U/G operation which should add significant reserves at time passes which compliments its aggressive 5-phase expansion project, which will bring annual output from a currently estimated 30k to over 55k year (ex-U/G). I;ve had the chance to really look at the prospects for Bracemac-Mcleod (which they get 17.5% of gold and silver from) and think this could be a very long lived operation. Im sure your also familiar with Rambler and the upside potential there both to increase the NPV through increased output as well as extending the LOM. Summit though I'm not crazy about but for 5m, what the hell? Mgmt, from what they have told me has plenty avenues of financing to acquire what will be its biggest stream (if they close whatever deal is in the works). I understand where you coming from but I also have a lot of faith in management which has made me (and I'm sure you as well) some ungodly amounts of money. If your hesistant , I would definitely rec the warrants which are levered about 2:1 and have expiration dates of mid 2014 and mid 2015. I have seen mine go from 31 cents (CAD) to approx 90 cents currently in less than 1 yr. Valuation wise there are some other factors to take into account such as having an effective tax rate similiar to Slw of under 5%. I also agree with your take on SLW and it has and remains my largest holding for two reasons 1) they will inevitably make more acquisitions to push them over the 50m/yr mark combined with almost unlimited upside potential at Penasquito and Pascua-Lama, the former which I think can eventually deliver 40mm oz a yr silver (call me crazy) if they build and U/G op. 2) I'm much more of a silverbug than a goldbug.  

I am, however more bullish long term on Sandstorm Metals and Energy and think that is easily a 10-20 bagger in the making over the next 5 years or so.  

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#20) On September 02, 2011 at 10:26 AM, SN3165 (< 20) wrote:

@Jwebbzor @Franky  I second that. Though I'm sure there are plently of other good PM analysts/writers out there...Sinch and Speedy are the only two I trust. 

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#21) On September 02, 2011 at 10:29 AM, speedybure (< 20) wrote:

BTW Sinch,

 I meant to get your opinion on of my favorite advanced stage companies, Colossus minerals. Any thoughts. Personally I see massive potential in a great play on brazil.  

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#22) On September 02, 2011 at 10:33 AM, Frankydontfailme (28.77) wrote:

Any thoughts on Sandridge Minerals guys? (SGC)

It's a development project in Eritrea (I know but the potential reserves are excellent) 

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#23) On September 02, 2011 at 11:12 AM, 100ozRound (28.56) wrote:

GMX - why don't you go write an article about it?

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#24) On September 02, 2011 at 11:50 AM, SN3165 (< 20) wrote:

Speedy did you see the video  of ATNA on CNBC the other day?

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#25) On September 02, 2011 at 12:07 PM, jwebbzor (< 20) wrote:

Would today be a good day to add SVM, or will it fall further while these fraud allegations fizzle out?

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#26) On September 02, 2011 at 12:15 PM, speedybure (< 20) wrote:

No I didn't see the Video. What were the contents? I'm very impressed the pulled off the Pinson transaction at still think $2 is more than achievable. 


I would dollar cost average 

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#27) On September 02, 2011 at 12:34 PM, Frankydontfailme (28.77) wrote:

I meant Sundridge

don't own it yet, but am considering if dips.

I've been hoping ATNA pulls back but it hasn't recently :( 

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#28) On September 02, 2011 at 12:41 PM, speedybure (< 20) wrote:

It got a lot of momentum following the Pinson news, its already incredibly cheap on a CF basis. 

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#29) On September 02, 2011 at 12:52 PM, SN3165 (< 20) wrote:

I didn't see the whole thing just caught a quick climpse, but it looked like just a positiveupdate on the company. I was quite surprised to see it

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#30) On September 02, 2011 at 1:05 PM, speedybure (< 20) wrote:

Well they wee able to acquire the 70% interest in this property Barrick held, Which dramatically enhance its growth profile both in the short term and in he aggregate. I wrote a small blog update here.

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#31) On September 02, 2011 at 1:19 PM, Jbay76 (< 20) wrote:


Do you know what the USA ticker symbol is for Sandstorm Metal and Energy?

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#32) On September 02, 2011 at 1:22 PM, speedybure (< 20) wrote:

I have posted a link to my article on SA which has what i see a fair valuation given I used fully diluted shares depiste them having a during of 15 months and 40% out of the money as well as assuming nat gas doesn't rise not the other commodities.  

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#33) On September 02, 2011 at 1:26 PM, Jbay76 (< 20) wrote:

Never mind, I found two: STTYF and SND.  They are ~ 0.02 cents off from each other FWIW...

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#34) On September 02, 2011 at 1:45 PM, INVESTWISE2010 (< 20) wrote:

How does one play Silvercorp in the current situation, when allegations (till now unsubstantiated) apparently are being made about management fraud and the share prices have experienced a steep fall. Would appreciate advice on this from anyone, including particularly the experts.

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#35) On September 02, 2011 at 1:56 PM, goldminingXpert (28.71) wrote:

No interest in writing about SVM. I do not in any way want to be associated with the shorters here until I see their evidence ... sending that letter could get he/them in quite a bit of trouble if it is inaccurate. All I know is that there was chatter that their SAIC filings did not match, which in and of itself is sufficient cause to get short, since this has been a flawless predictor of accounting irregularities ever since John Bird exposed the CSKI shenanigans.

If you buy SVM here, your odds are about as good as if you bought CCME, RINO, SinoForest, or other mismatching SAIC Chinese filers.  

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#36) On September 02, 2011 at 1:56 PM, speedybure (< 20) wrote:

Silvercorp has what I consider one of the best mgmt teams in the silver arena and highly doubt these allegations will prove correct. The focus here is the different reporting to china vs canada. I;m still waiting for a call back from what has been a very open company but this could be cause by Silvercorps subsidiaries or something comparable. There are some other things in these allegations, but I put for confidence in mgmt than "Anonymous" at this point albeit everything is subject to change. The odd thing here is as opposed to Sino Forest is why wouldn;t the "anonymous" whistlelower or whatever you want to call it didn't reveal themselves while Muddy Waters did vs Sino.  

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#37) On September 02, 2011 at 2:04 PM, speedybure (< 20) wrote:

The SAIC website ( A) discloses the following for Silvercorp’s four Chinese operating subsidiaries: (i) Henan Found filed net after income tax profit for Calendar year 2010 of RMB514,786,392; (ii)  Henan Huawei filed a net loss of RMB6,091,388; (iii) Guangdong Found filed a net loss of RMB4,758,879; and (iv) Anhui Yangtze filed a net loss of RMB1,214,663.  On a consolidated basis, the net profit of these four Companies is RMB502,721,462 (US$ 73 million).  In addition on the cover of each filed SAIC document there is an anti-fraud code displayed which readers can use to independently verify those reports on the Chinese Certified Professional Accountant website ( Further information to reconcile this China GAAP consolidated total net profit with the US$66 million figure will be posted on the Company’s website. The anonymous author’s numbers are clearly false.

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#38) On September 02, 2011 at 2:10 PM, goldminingXpert (28.71) wrote:

The anon person was going to reveal themselves, they stated they would disseminate via internet postings. So I am confident they will bring out the full case fairly soon.

The SAIC defense is fairly weak, several Chinese companies have modified ... read faked .. their SAIC filings after having their filings questioned. Both Citron Research and Absaroka Capital have been accussed of faking SAIC filings, but in neither situation has the company proven or attempted to sue to back up their allegations. 

Most fraudulent Chinese companies attempt to defend themselves for awhile. If you are willing to run a scam to defraud people, you are not going to give up the moment someone tries to expose you. Assuming the company is telling you the truth when the short case is not even aired is rather presumptuous. 

The risk/reward here is way in favor of the Chinese company lying. If a Chinese executive lies to Americans, he cannot be prosecuted. If a short seller lies, he loses his gains and may even go to jail. Simple logic supports the idea that a company has less to lose from lying than a short seller. 

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#39) On September 02, 2011 at 2:20 PM, speedybure (< 20) wrote:

The full 97 page defense with all the documents 

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#40) On September 02, 2011 at 2:23 PM, speedybure (< 20) wrote:

Would you call something like Aurico a Mexican company because I view them as a Candian company. BTW, are you the one that published then retracted that great panther article?

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#41) On September 02, 2011 at 2:23 PM, silverminer (30.02) wrote:

"I do not in any way want to be associated with the shorters here until I see their evidence"...

Allegations wholly unsupported by the factual record has always been enough for this blogger in the past. While it's tempting to conclude the individual may have learned from past mistakes, that capacity has also not been in evidence at any time during the past several years.

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#42) On September 02, 2011 at 2:24 PM, silverminer (30.02) wrote:

Yes, speedy ... I've been trying to tell you ... it's the same individual!

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#43) On September 02, 2011 at 2:29 PM, speedybure (< 20) wrote:

Okay, Then does he think his comments will be taken seriously by anyone? I like the quote (paraphrased) "this will turn out like Sino Forest" wow, I just fell out of my chair. 

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#44) On September 02, 2011 at 2:31 PM, goldminingXpert (28.71) wrote:

All the top management of Silvercorp is Chinese and are likely immune to prosecution in Canada if they have committed fraud. That is why so many Chinese frauds come public here rather than in their home country, legal immunity.

Yes, I did write the GPL article, and I did retract it because source material I quoted from was inaccurate. You can blame me for quoting inaccurate material if you wish. I genuinely had no idea what I was quoting was inaccurate and I was more than happy to back down, even though most of my article was accurate, because I had made a mistake. 

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#45) On September 02, 2011 at 2:31 PM, INVESTWISE2010 (< 20) wrote:

I would like to add that there is some comfort in the management's decision to establish " a task force of independent directors consisting of Dr.   Robert Gayton, Paul Simpson, LL.B.   and Earl Drake, Canada's former ambassador to China, to work with regulatory authorities to immediately investigate" the matter as reported on their web site.


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#46) On September 02, 2011 at 2:42 PM, silverminer (30.02) wrote:

He was forced to retract the article, and tries to make it sound voluntary.

It is a laughable farce for the individual to then claim that "most of the article was accurate". It most certainly was not. It had, as Great Panther CEO Bob Archer described, "more holes in it than the Titanic".

The individual never conceded the falsehood of allegations of questionable cost accounting also leveled against the company by his pal Otto without a shred of documentary evidence. I proved that allegation to be 100% false, but the individual continued to repeat the allegation. Facts and evidence mean nothing to this individual, and therefore reasoned and rational discourse with this individual simply IS NOT POSSIBLE!

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#47) On September 02, 2011 at 2:48 PM, goldminingXpert (28.71) wrote:

I quoted errant material, and the concentrate sales problem was also resolved. With two premises of my article out of play, there was no reason for me to leave my article out there. That said, I have no concerns about the other material I quoted regarding Lebed, cash costs, and other matters discussed there. 

P.S. Otto recently stuck a buy on GPL citing cash cost clarity, resolution of the concentrate problem, and an upcoming good Q3. We bears are willing to change our minds if the situtation dictates it.

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#48) On September 02, 2011 at 2:56 PM, speedybure (< 20) wrote:

Either way, you should have made sure your quoted material was factually correct or left it out altoghether. I'm not familiar with your work except for that but its enough to make me dismiss anything you say. I;m sure almost all out there are doing the same.

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#49) On September 02, 2011 at 2:59 PM, silverminer (30.02) wrote:

Here is the individual's latest short pitch:

goldminingXpert (99.74) Submitted: 9/2/2011 9:23:14 AM : Start Price: $8.95 SVM Score: +14.85

Biggest Chinese RTO fraud yet? Sure seems like it may be. Always do fundamental research rather than just buying something cause it has silver or gold in its name.


So from one face comes a statement that the individual will reserve judgement until he reviews the evidence (something that has not been evident as a recurring practice), while from the other face comes a highly inflammatory allegation like the one leveled in the short pitch.

Proactive short traders do not require evidence to promote their desired result. They need only to create fear or uncertainty.

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#50) On September 02, 2011 at 3:07 PM, silverminer (30.02) wrote:


There is years worth of archived CAPS content from this individual all carrying the exact same MO! That is why I will no longer engage the individual in direct discourse of any kind.

And every allegation leveled against GPL had been previously leveled by his pal Otto in a series of similarly unsubstantiated hit pieces, all with the exact same lack of documentary evidence. So his perspective was 100% unoriginal, and after the piece sends the stock price diving and gives the shorts a chance to cash in, his blogger pal suddenly reverses a multi-year tirade against the company.

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#51) On September 02, 2011 at 3:08 PM, goldminingXpert (28.71) wrote:

In my retraction, I showed the three places I pulled the errant data I cited from. At a newspaper, you only have to doublecheck. Did I make an error. Yes. Did I have to retract. Yes. Should you crucify me for it, when I have only had to correct three and retract one out of seventy articles I have written? In my opinion no, but you are of course to free to judge as you wish. 

Sinchy: I was short SVM, and as such, I was excited to see the SAIC filings not matching hit a newswire. There are no Chinese stocks that have survived mismatched SAIC filings without shedding much value, so I figure SVM is a fairly slamdunk short. Could SVM be the exception. Sure. Absolutely. Are the mathematical odds on my side of the bet? Unless you ignore the last two years of Chinese RTO fraud entirely, yes. 

I write about and trade Chinese RTOs to pay my bills. Gold stocks are, by comparison, just a hobby for me. 

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#52) On September 02, 2011 at 3:14 PM, goldminingXpert (28.71) wrote:

Neither Otto nor I were short GPL. We did not cash in on anything. And he did not recommend buying the stock until it was back over where I had written about it.

The unsubstantiated allegations lacking documentary evidence street goes both ways, ya know.

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#53) On September 02, 2011 at 3:24 PM, silverminer (30.02) wrote:

I have seen enough over the years from this individual to know the real score. I think the longstanding members of this community likewise know the score. The Great Panther article was simply the most eggregious example within a pattern of leveling unsubstantiated, spurious claims against companies over the years without ever backing the claims up with comprehensive research or reasoned debate. The individual has been calling himself a "goldminingXpert" on this site for more than 4 years.

Since the individual's biographical profile at SA states: "graduated with a degree in economics from Colorado State University in 2010", that would suggest the individual thought himself an expert on gold miners from about his Sophomore year.

I have exposed the individual's complete lack of expertise on the topic of gold and gold miners at very turn over the past several years. He chimed in on the AUQ/NXG deal's valuation, but knew so little about Northgate that he misinterpreted a news blurb and assumed Young-Davidson had been delayed to 2013. But rather than just regurgitate the news blurb, he sought to characterize the attitude of longstanding Northgate investors as being fed up with "long delays" at Young-Davidson to make it sound as though he had been following the development all along. That's just another instance of where he exposed his paltry understanding of the industry. And the individual even saw fit to boast about making the "right call" on AUQ with a recent short pick, without bothering to concede that his 2011 target price for the stock that he issued in July 2010 had been $2!!

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#54) On September 02, 2011 at 3:25 PM, INVESTWISE2010 (< 20) wrote:

Really appreciate the insightful comments from these very knowledgeable experts. The have provided an excellent perspective. Many thanks !!!

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#55) On September 02, 2011 at 3:27 PM, silverminer (30.02) wrote:

December 11, 2008 (SLW at $4.33 per share) [Note that his admitted lack of knowledge about the company did not stop him from recommending that investors take profits (possibly persuading some to miss an ensuing 761% gain).]

"sell half, keep the rest if you like it. I've never bothered to try to figure out SLW's opaque financials, but as a corporate offspring of Goldcorp, I have to assume the worst. With no cash and lots of debt, they are highly leveraged to the silver price cycle... if you are a bull on silver here, you probably like this stock. If like me you are neutral on silver, than the debt risk is just too much, take your profits with at least 50% of your shares as this market is so tough, take the profits when you got 'em."

May 5, 2011 [2.5 years after the above post, it's clear he still has zero understanding of how to value Silver Wheaton]

"The important thing to realize, though, is that the market is not using fundamentals to value SLW. Any attempt to trade it based on fundamentals will only leave you confused. SLW trades as a high-leverage proxy for the price of silver -- as if it were an ultra vehicle. Nothing more and nothing less."

"A large number of SLW supporters no know about the company other than its basic and admittedly interesting business model. Easy money in, easy money out... momo momo just like 1999 all over again. SLW is more of an AMZN (way overvalued, good business, good management, will be a good investment again in the future) rather than a though. ;)"

[The above post also contains another sampling of classics that I compiled from the archival record after another of his consistently unsubstantiated sets of claims]

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#56) On September 02, 2011 at 3:29 PM, silverminer (30.02) wrote:

February 12, 2009:

"The gold bugs make money by profiting off the destruction of our economy. I feel no shame at enjoying their suffering."

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#57) On September 02, 2011 at 3:30 PM, silverminer (30.02) wrote:

June 22, 2010

"There's still some gold companies such as SA, NG, ANV and GRS that you can safely short if you long a good miner and make it a pair trade."


[I have no particular love for SA or NG, but note the confident language portraying short positions in gold explorers and miners as "safe". As I have properly maintained since I began posting here at CAPS, there is nothing safe about any short position in any gold or silver-related instruments in the midst of this secular bull market. Less attractive names are to be avoided, but definitely not shorted. Since he declared those stocks could be "safely shorted", ANV and AUQ have both doubled, NG is up about 40%, and SA is down about 18%.]

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#58) On September 02, 2011 at 3:34 PM, silverminer (30.02) wrote:

March 14, 2011; short pitch for ECU Silver

"Are you all nuts? Collective delusions? This ongoing scam is a specially built vehicle to bilk gringos of their investing capital. Slap the word "silver" on a corporate shell, mine a piddling amount of metal at considerable losses, operate at negative cash flow eternally, and pay yourself fat salaries while constantly diluting shareholders.Anyone thinking this company is worthy of its $300+Million market cap doesn't really know much about mining I'm afraid."

[In the discussion that followed, he posted a link to another hit-piece by the same blogger who ran the hit pieces against Great Panther referenced above. Again, I did my homework and looked into the facts behind that blogger's allegations against ECU Silver, and found they reflected a similar lack of understanding of the mining sector at large and the procedures by which resources are estimated throughout the mining industry.

And there again, instead of conceding that the facts did not support the allegations leveled by his favorite source for unsubstantiated allegations, he resorted to share price performance as evidence he was right about the company. That particular stock is presently mired in weakness, and he will undoubtedly claim that is indeed confirmation that his "analysis" was correct, but as with his allegations against Great Panther the factual basis for his claims IS NOT THERE!

I am not strongly bullish on ECU Silver, as I have been duly unimpressed with the company's progress to date, and I am concerned with the management that it is now teaming up with. But thoser are separate matters than the allegations leveled by the blogger in question regarding fraudulent reporting of resources.]

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#59) On September 02, 2011 at 3:35 PM, silverminer (30.02) wrote:

August 11, 2008:

"TMFSinchiruna has a negative score here and a CAPS rating below 50, Dwot and I however have a much better track record. GDX might not be a bad play here if you want to buy something. I put an outperform on it today in hopes of a snapback rally. I also grabbed some calls on Barrick (ABX). However, the long-term picture still isn't real friendly. As I've said before, this is a trader's market."

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#60) On September 02, 2011 at 3:35 PM, silverminer (30.02) wrote:

February 4, 2011 [GMX was not even aware that his beloved Jaguar Mining had discontinued operations at one of its mines without so much as a press release; yet he loves to bash AuRico ad nauseum for its prior temporary closure of El Cubo.]

"Which producing mine disappeared Silverminer? I see that Sabara isn't on the dropdown menu, but it is still on their site."

[addressed to me]: "Help me understand this. The Sabara mine still shows up on google search and leads to that page, which still loads from their website. What's a ghost link?"

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#61) On September 02, 2011 at 3:39 PM, goldminingXpert (28.71) wrote:

TMFSinchurina/Silverminer/Christopher Barker

You can make anyone look like an idiot by cherrypicking out their bad pitches. That is why I quit writing pitches for most companies I thumb here. I do not have time nor desire to go through all your articles and picks and find every error you have ever committed, but I could find a whole bushel if I cared to. Making mistakes is part and parcel of the analyst business. Any analyst who thinks they will always be right would be delusional. I make poor trades frequently, and I rely on readers and collaboraters to always help in improving my thinking.

My track record at Seeking Alpha ... which has gotten me various consulting work for hedge funds ... speaks for itself. It certainly is not perfect, but I am happy with it. If you want to twist my track record to meet your own ends, go ahead. 

Furthermore, I will not drag your name through the mud for years in the future because of your past bad calls, including SVM should it turn out poorly. You criticized me in the past, fairly, for judging you based on your at that time low CAPS score. I apologized and have not again done so. You have a solid track record, and I see no point in finding your mistakes and trumpeting them repeatedly.

All that said, your repeated invective against me will not help out your underwater SVM position. I recommend you do some reading on Chinese RTOs. There is quite a bit of good information about them over at Seeking Alpha.

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#62) On September 02, 2011 at 3:44 PM, silverminer (30.02) wrote:

Let the public record show I tried for quite some time to forgive this blogger of his past transgressions in a spirit of forgiveness. After the individual posted this:

... I thought perhaps the young college grad had matured a bit and was prepared to turn over a new leaf.

Subsequent developments have more than adequately proved that is not the case.

So therefore, rather than engaing the individual in further dialogue, I simply reiterate my relevant determination:

I've decided I'm done engaging directly with GMX. Attempting to reason with him in discussions of fact have proven to be a complete waste of my time over the past several years. Although it's a simple task for him to level baseless allegations against companies, my wish to ensure that my fellow Fools not fall victim to unsubstantiated claims or misinformation has compelled me to rebut those drive-by attacks as I have here above and throughout the CAPS archives. For the record, I have put in my time in that pursuit, and I am now done.

So let this serve as fair warning to all members of CAPS who may in the future be tempted to permit their opinions of a company to be even remotely impacted or swayed by this individual's posts: you risk walking into a world where facts are not welcome, where research consists of a link to some dude's blog, where prior failures never yield a less authoritative tone, and where shorting stocks against the tide of our generation's most powerful secular bull market is somehow not considered folly. Only you can protect yourself from that world by not walking through that door, because I will no longer carry responsibility for revealing the emptiness or carelessness of his future allegations.

I'll leave a sign hanging on the door: "Danger: do not enter!" But I will not be there to stand guard. Enter at your own risk.

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#63) On September 02, 2011 at 3:48 PM, goldminingXpert (28.71) wrote:

P.S. Quit lying about Jaguar. They did state that Sabara was shut down and to expect no further production from it last year.

I apologized for the gold bugs comments years ago, I apologized for criticizing your score. I sincerely meant those apologies and have not repeated these actions. I was, am, and appear likely to continue to be right about ECUXF, and I have stated that I was wrong about SLW. 

In case that is not clear, I will say it again. I was wrong about SLW. I was wrong. Wrong. Incorrect. Mistaken.  

Yet, I am sure you will continue to quote me from years ago about SLW to discredit me in the future. That is your MO. 

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#64) On September 02, 2011 at 3:48 PM, silverminer (30.02) wrote:

When the individual ceases to bash mining companies with unsubstantiated allegations, changes his username to one more befitting of reality, and adopts a less authoritative tone with his careless and poorly constructed perspectives, I will cease my efforts to warn the CAPS community regarding the individual's abysmal historical record.

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#65) On September 02, 2011 at 3:51 PM, speedybure (< 20) wrote:

Silverminer/Sinch - 

Don't waste your time with this. I;ve seen your excellent calls for yrs now and given this person's track record , I can see you obviously have nothing to gain.  

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#66) On September 02, 2011 at 3:51 PM, silverminer (30.02) wrote:

"I apologized for criticizing your score. I sincerely meant those apologies and have not repeated these actions."


From 2 weeks ago:

"Successfully calling green thumbs on all miners during the greatest bull market in metal history makes you look like a genius for a time. However, touting dogs such as Novagold, ECU Silver, GPL, etc. will end up making you look like a fool when the market finally corrects. Chris has successfully tied his beta to the correct market, but proof of alpha remains to be seen. Remember his abysmal record during the gold mining correction in 08.

Chris: Do you speak Spanish? Do you read local news accounts of what the Latam mining companies are up to? I cannot imagine anyone being bullish on Gammon/Aurico after reading local newspaper coverage of the company, and same goes for ECU.

Chris is not a bad mining analyst, per se, but he needs to learn to be a little more cynical. He reminds me of all the analysts that Casey Research hired earlier this decade specifically because they had never seen a bear market before. They were hired specifically because they would be more effective promoters of stock. Eventually their wellintentioned gullibility will catch up to them though. After Chris learns the lessons of a real bear market, he could be a special mining analyst, we will see. Not willing to learn from mistakes (and making a low-margin poor management team led companies like GPL top picks) indicate he is still somewhere in the teaching process and that he needs to listen to criticism rather than densely blowing it off."

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#67) On September 02, 2011 at 3:55 PM, silverminer (30.02) wrote:


I'm done. :) Sorry to have derailed your blog post with all this crap, but the truth matters, including having investors know where they can reliably look for it.

I'm off to enjoy my weekend. Happy Labor Day everyone!

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#68) On September 02, 2011 at 4:03 PM, goldminingXpert (28.71) wrote:

It is always fun. With CAPS participation down and traffic ranking on the decline, giving the community some entertainment is more important than ever.


Good luck to everyone with SVM positions. 

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#69) On September 02, 2011 at 4:03 PM, jesusfreakinco (28.21) wrote:

The timing of the anonymous tip is highly suspicious IMO; just after management goes after the short sellers via the share purchase.  Smacks of retaliation by the EE IMO.

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#70) On September 02, 2011 at 4:07 PM, jesusfreakinco (28.21) wrote:

And I am putting my money where my mouth is... took a decent sized position in SVM today.  The fundamentals are strong for both this company and the silver market in general.  Silver VERY strong today breaking out of its recent range.  Many that I have read are predicting a strong upmove to test 50 again - and have predicted it will take out 50 with force - some have even said this will happen this month.  If this happens, we could easily see SVM double from here - in traded near 16 a few months back when silver was around 40.  I don't blame mgt for defending their stock price and feel its about time!


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#71) On September 02, 2011 at 4:11 PM, jesusfreakinco (28.21) wrote:


Hold your head up man!  GMX is an condescending two-faced idiot (I'll say it even if you are too nice to say it...).  

Don't let the actions and words of the minority take away from all the good things you have done for the FOOL community.  

Have a great weekend.   You deserve it!


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#72) On September 02, 2011 at 4:12 PM, goldminingXpert (28.71) wrote:

If SVM is really what they claim to be it is worth far more than eight bucks a share jesusfreakinco. How familar are you with CCME, RINO, CHBT, SNOFF, CEU, SHZ, ONP, LIWA, etc. etc.? They all looked way undervalued as well. China is producing an absurd amount of frauds. Is it worth sticking around in SVM for the big gain that will occur if the company is legit, or is it better to invest in a safe silver company with a little less upside like Fortuna?

Disclosure: Short SVM, Long FVITF *and looking forward to a new ticker symbol soon* 

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#73) On September 02, 2011 at 4:27 PM, goldminingXpert (28.71) wrote:


Sorry you think I am a condescending two faced idiot. If I ever run into at church or elsewhere when I am back home in Colorado, I will take you out to lunch and try to repair my reputation with you. I have always enjoyed your blogs and contributions to the Fool community, even including when I have disagreed with you. Have a great weekend man, and enjoy the great mountain views for me while I am here in NYC.

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#74) On September 02, 2011 at 4:28 PM, HealthyInvestor (27.97) wrote:

Healthy investing to all!

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#75) On September 02, 2011 at 4:40 PM, goldminingXpert (28.71) wrote:

Likewise, healthyinvestor.

I sincerely wish the best for all SVM investors, either on the long or short side, and I hope longs that are not familiar with Chinese fraud in general became acquainted today and traded accordingly. 

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#76) On September 02, 2011 at 7:33 PM, jwebbzor (< 20) wrote:

GMX, I don't think you did anything wrong in this blog. You simply pointed out that the anon tipper and the short sellers have alot more to lose than management.

speedy, thank you for providing information that clears these allegations.

I'm going to spend some serious time this weekend looking over the numbers. A pretty large percentage of my portfolio is SVM, and I cannot take any chances.

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#77) On September 02, 2011 at 8:00 PM, jwebbzor (< 20) wrote:


In their 90 page report, SVM discloses their bank statements. If they faked those, we will surely find out by Tuesday.

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#78) On September 02, 2011 at 8:33 PM, speedybure (< 20) wrote:


I have spent several hrs looking through the biggest allegations as well as few from the casey team and this is looking more and more like a complete hack job.  

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#79) On September 03, 2011 at 8:25 PM, uub777 (< 20) wrote:

GMX why do you think SVM is a fraud besides thinking they could have faked their SAIC?

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#80) On September 04, 2011 at 10:45 PM, jesusfreakinco (28.21) wrote:

GMX / Others,

As a former auditor, I can tell you one thing that happens during an audit - cash balances are confirmed independently with the banks.  If these bank statements with western banks are indeed valid, then SVM's auditors have been verifying their cash balances independently each year since the inception of the company.  This includes a 147,224,000 balance reported on their 10K less than six months ago - March 31.  Same would be true of their S/T investments 59,037,000 as of March 31.  This isn't Enron with the potential for a bunch of off-balance sheet entities to hide liabilities.  

GMX - mano a mano... are you short SVM (in any way, puts, naked, etc)?  When did you intiate a position, if so?

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#81) On September 05, 2011 at 10:35 AM, XMFSinchiruna (26.44) wrote:


He states above he is short SVM. (Comment #72)


Look elsewhere for well researched, reliable information on the company. You will not find it from the source you approached above.

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#82) On September 05, 2011 at 4:35 PM, speedybure (< 20) wrote:


BTW, I spent some time this weekend calculating the pro-forma NAV of AUQ+NXG. Using 1700 gold, 40 silver, dr - 10% and elevated cash costs at fosterville & statwell, I came up with just over $18 share on a fully diluted basis. 

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#83) On September 06, 2011 at 4:29 PM, mihrtrn (< 20) wrote:


SVM destroyed the credibility of this anonymous letter alleging fraud in the areas of cash overstatement and others with the posting of the bank statements. I think the fraudulent letter should have been signed using the name SWISS CHEESE. I'm still waiting for the fraudulent weasel letter writer to disseminate / come out of the closet. I guess I'll have to wait for the shortie / hedgie perp walk.

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#84) On September 07, 2011 at 10:23 AM, XMFSinchiruna (26.44) wrote:

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#85) On September 09, 2011 at 2:10 PM, traderbach (< 20) wrote:

Hey Sinch & Speedy

This situation w/ this GDMX character is totally out of control now.  I realize that the guy is infuriating but merely by entering a blog post conversation he is managing to sabotage the great & valuable discussions that we who are interested in PMs & miners have in this arena.  You both have many times over proven & cemented your credentials in this sphere.  I would like to respectfully suggest that you do not reply multiple times to the entry of this person.  It is sufficient to all of us familiar w/ your work that you merely state once something like "I refute this individual's allegations which I further think may be motivated by self-profit alone & will not enter into further discussion on his point that may detract from the value of the current conversation".  Just writing that last in quotes showed me how difficult it is to deal w/ intentional sabotage & yet remain appropriate in my language.  But seriously he's got way too much power when he can hijack the whole thread which involves many highly-respected members. If anyone has a better way of dealing w/ him that would be effective in the real world (no 'tar & feathers' please) then please make it known so that we all no longer have to deal w/ this lunacy (advisedly). Looking forward as always to your posts/comments.

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