+ Watch MVG
on My Watchlist
My thesis is that silver will not remain below $30/oz for long in the coming months, if at all, and that volatility will continue. I would not encourage anyone to invest in silver itself in this environment. However, young primary silver miners are something else completely. As long as the price of silver remains safely above production costs, silver mines have incentive to reopen, and exploration companies are motivated to look for new potential mineable areas.Even if silver does drop under $30 for an extended period of time, the increasing production of many primary silver miners and silver explorers/soon-to-be producers will far outweigh the drop in silver price in terms of earnings. Looking out 12 months and beyond, even in a protracted environment of, say, $20-25 silver, many explorers/young producers will easily mitigate that potential drop in silver price with their growing production, and share prices will follow suit upwards. I'm giving a Fool's thumb up to several silver miners, b/c I believe that silver will trade above $35 later this year, and will rise over time from there. However (full disclosure), I am personally invested only in the following, due in part to their extreme production growth potential (and many of them have quite low production costs, too):Currently Producing:*Silvermex*Alexco*AurcanaNot Yet Producing:*South American Silver*Wildcat Silver*Sabina*Bear CreekAlways do your DD, and don't forget to have fun. Fool on!
back at a good value level
Gold is overbought, silver is the canonical penultimate inflation-hedge for a lot of people.
If Mag silver is not taken out by Fresnillo, the massive silver holdings will make it an easy "double/triple" when analysts compare MVG to other silver miners.
-3 May 10 5 put
WILL DOMINATE THE S&P 500
MAG Silver Corp (AMEX:MVG and TSE:MAG) has really underperformed compared to other silver companies in the past year and it could be a good candidate for a quick gain. However, ever since the "takeunder" bid from Fresnillo (LON:FRES), their joint venture partner and operator of their main asset, the Juanicipio property, they have languished. It seems to me MAG picked a very good spot and have found very nice grades right next to Fresnillo's massive silver property and thought that they would get a decent return for the solid exploration work they put into it, but the problem is Fresnillo does not want to pay a fair price. They want it at their price and are big enough to wait MAG out. Also, it seems no other silver company wants to have to deal with an uncooperative partner like Fresnillo, so no other bids for MAG's property have been made and MAG was relying on Fresnillo to develop the property. It is very unclear how things will work out going forward with this property and for this reason it seems MAG is making an effort to establish other viable projects through acquisitions of promising properties in other parts of Mexico.
Gold & Silver are ready to pounce as this econony is will continue to struggle at best. Be prepared and buy & store the real thing. See http://www.fool.com/investing/general/2009/01/13/mag-silver-eludes-pursuer-for-now.aspx For analysis.
4CAPS Stars.at $4.63 the company is valued 25% lower than it's proven Silver reserves. Look at the various CAPS blog comments on the stock...
Silver and Gold have been heavilly shorted. The shorting of silver has lowered the spot price dramatically closing many smaller silver mines. The demand for silver has risen with the pending dollar collapse. The combination of increased demand and decreased supply will propel silver over 30$ an ounce.
On June 11, 2009 at 5:42 PM, FleaBagger (99.01) wrote: I don't think I can do a better pitch than Chris Barker (TMFSinchiruna), so let me just say that economic distress and inflation are just beginning, and silver is undervalued relative to gold, MVG is undervalued relative to silver (having lagged all other silver stocks I've seen in the last few months), and they have a lot of really good silver veins in the ground (Chris said one mine had ore grades as high as 10,000 grammes per tonne [I love those Euro-spellings] - that's huge! That would be outrageously profitable in the event of $25 silver, let alone the $75-100 silver that I expect in the next year or two.) I expect rough times for at least the next 5 years, but company-specific problems could beset Mag in the meantime. Still, ownership of these mines is enough to value this company much, much higher, in anticipation of higher silver prices. Caveat: if silver prices do not rise, MVG would probably be a poor investment.
http://www.fool.com/investing/general/2009/01/13/mag-silver-eludes-pursuer-for-now.aspxhttp://www.fool.com/investing/value/2008/12/04/the-mr-scrooge-of-silver-miners.aspx"Fresnillo already owns 19.8% of MAG shares after a big purchase back in October, and now seeks to consolidate its interests throughout the Fresnillo II development project. With "bonanza" ore grades above 1,000 grams of silver per tonne, the joint venture's 238 million ounces of inferred silver resources and 480,000 ounces of gold makes this one of the choicest silver-bearing ore bodies this Fool has ever seen.Interestingly, these figures exclude the results of exploration in 2008, which encountered ore grades as high as 10,000 grams per tonne at Valdecanas, and more than 4,000 g/t in the nearby Juanicipio vein. High ore grades make for highly profitable mines, as the operating costs associated with processing ore into its metal components are significantly reduced."
Finally, all that glitters. Need I say more?
O/U 40% - 90%
rudoplh steiner and silver
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