Use access key #2 to skip to page content.

XMFSinchiruna (26.55)

The Secrets to First Majestic Silver's Success



March 21, 2012 – Comments (13) | RELATED TICKERS: AG , SLW , FSM

There can be no doubt about it: First Majestic Silver provides one of the standout success stories from this silver bull market cycle. And during the PDAC conference in Toronto, I had an opportunity to sit down with the company's top brass to discuss how it was that they were able to execute such a phenomenal build-out to date, as well as the perhaps under-appreciated scale of the growth that remains in store.

If you want to condense a 9-year success story into a single, pivotal moment; I think the story of how the decision was made to build the company's first mill at La Parilla is as classic as they come.

I hope you enjoy the article. 

13 Comments – Post Your Own

#1) On March 21, 2012 at 9:04 PM, XMFSinchiruna (26.55) wrote:

Also, for anyone who may have missed it, here is my write-up of Endeavour Silver's year-end results:

Report this comment
#2) On March 22, 2012 at 2:00 PM, outoffocus (22.84) wrote:

I made it only halfway thru the EXK article yesterday. I will try to finish it today.

Report this comment
#3) On March 22, 2012 at 2:07 PM, SN3165 (< 20) wrote:

I just bought kimber at .89 and feel pretty good about it. Only thing is  cash balance is running low :-(

New Gold at $9... Can you say buying opp? Can it go lower? Brigus all the way to .75 but I simply can't throw any more money into that one.

Report this comment
#4) On March 22, 2012 at 2:23 PM, texasflyfish (76.80) wrote:

Christopher, as I watch Primero's stock slowly go down, I was wondering if you have had any change in your opinion about their prospects.  Is this the market being irrational, or is there some new development that will affect their production?

Report this comment
#5) On March 22, 2012 at 2:57 PM, dcgatlanta (36.35) wrote:


I enjoyed the First Majestic article.  I have two OT questions that I'd welcome your input...

1)  Was the BRD operations update so bad?  The grades being reported seem in line with grades reported by ABX on a flagship mine.

2)  The bear case on TC is their significant Cap Ex coming over the next 18-24 months.  Are they expected to fund it through existing operations / cash on hand, or is an equity offering likely to come?

Thanks for your great coverage! 




Report this comment
#6) On March 22, 2012 at 6:42 PM, XMFSinchiruna (26.55) wrote:


I wrote recent comments on Primero beneath the article here:


The BRD update was actually quite positive, as the company is still guiding for production within the range I was anticipating for this year well before the reccent setback. You are witnessing the first stages of the operational turnaround, met by a marketplace that has lost all patience and ascribes no credibility. The result is, of course, deep value with a capital "D".

But one thing I need answered now before I can discern a timeline for achieving profitability is the impact upon the cost structure of this new development push with modified mining methods and an increased number of stopes. Obviously development costs have climbed, but we need to see where other aspects of operational costs come in.

On TC, I personally think the market has overreacted to the cost escalation issue on a valuation basis, but in the event that a modest amount of additional financing may be required, if that happens before the stock climbs out of its presently impaired state, it is conceivable that the value could grow deeper still. But between existing cash, further royalty payment from RGLD, and cash flow from ops with an expanded Endako, on the back of my envelope I see only a minor potential funding gap.


New Gold is a good company, but its stock is not among the better bargains IMO.

Report this comment
#7) On March 22, 2012 at 6:49 PM, XMFSinchiruna (26.55) wrote:

SLW Earnings... the perfect cure for what ails us after a day like today. :)

Report this comment
#8) On March 22, 2012 at 7:27 PM, XMFSinchiruna (26.55) wrote:


On second thought, I hadn't seen that PPP closed down >8% today. That does present a fascinating compulsion to average down, since even in a worst-case scenario of major lost ounces (more likely to be minor, I believe), the current share valuation will still be viewed in hindsight as the one of the industry's truly great bargains.

Remember, Goldcorp thought it was worth $500 million when it sold the asset, and continues to hold its 36% stake. Goldcorp was aware of the royalty issue and the resource model deficiencies at that time. I'm not sure many folks realize that important point. If I hadn't already redeployed my cash, I'd be adding to my position here.

$2.28. That's shocking!

Report this comment
#9) On March 22, 2012 at 9:30 PM, SN3165 (< 20) wrote:

I agree with your thoughts on NGD however I think the 17 warrants a worth a strong look, especially if they dip below $3. A leveraged play on gold with low risk IMO - You've got five years here of a play on gold and the company is launching a new mine this year that will really drive cash costs lower. Strike of $15 until 2017 - I see the stock reaching $15 as HIGHLY likely (well before then too) barring any unforeseen setbacks.

Warrants can be really great addition to any portfolio - quite frankly, the only reason my portfolio is still up on the year 10 percent is because of the Sandstorm gold 2014 warrants. I have the Primero warrants 2015 strike $8 which obviously don't look good here but I still have faith... I will probably buy the common stock tomorrow if it's still around $2.20 b/c that is a JOKE. 

Report this comment
#10) On March 23, 2012 at 1:32 PM, SN3165 (< 20) wrote:

Report this comment
#11) On March 23, 2012 at 2:17 PM, dcgatlanta (36.35) wrote:


Thanks for your take on BRD and TC.  Great commentary again. 

Report this comment
#12) On March 26, 2012 at 9:20 PM, SN3165 (< 20) wrote:

I bought Primero common around $2.35 but I am just about out of cash.. :-(

Report this comment
#13) On April 03, 2012 at 10:46 PM, skypilot2005 (< 20) wrote:


April 03, 2012
First Majestic Announces Friendly Acquisition Of Silvermex Resources


Sky Pilot

Official Web Link Assistant to Sinch

Report this comment

Featured Broker Partners