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The_Muns

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IN REPLY TO A POST BY The_Muns, Monday 26/01/04 07:00am   [READ POST]

With all the bullish talk on silver over the past few months.

Do we have any good companies around with silver in there inventory ?

Hi Muns

 

I don't know too many, but check out BSG (Bolnisi). They seem to be uncovering a lot of silver in Mexico. That also means the costs are likely to be in USD as well so they will not be affected by the rising A$ quite so much.

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IN REPLY TO A POST BY theflasherman, Mon 26/01/04 10:18pm   [READ POST]


Hi Muns

I don't know too many, but check out BSG (Bolnisi). They seem to be uncovering a lot of silver in Mexico. That also means the costs are likely to be in USD as well so they will not be affected by the rising A$ quite so much.

Theres also Anvil (AVL), with copper and silver in the DRC.

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IN REPLY TO A POST BY The_Muns, Mon 26/01/04 05:00pm   [READ POST]

With all the bullish talk on silver over the past few months.

Do we have any good companies around with silver in there inventory ?

Hi Muns

MMN have a deposit of silver in Texas (of all places) http://www.asxboard.com/html/emoticons/biggrin.gif

 

Nice looking chart too.

 

Tex.

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thanks for bringing MMN to my attention!!! See below for some possible substantial upside.

 

MACMIN SILVER

By Nikki Todd

BRISBANE, Jan 28 AAP - Macmin Silver Ltd could make a decision on whether to press ahead with development of its silver mine near Texas, Queensland, by mid-year, managing director Bob McNeil said today.

Mr McNeil made the comments came as he predicted the company would enjoy its best year in 2004 since listing more than a decade ago.

The silver and gold explorer put plans to develop its silver mine near Texas, on the Queensland-NSW border, on hold about a year ago, in anticipation of escalating silver prices.

Mr McNeil said today the company would make a decision on the mine's development once the precious metal passed the $A9.00 mark.

The latest prices from New York overnight show the COMEX March silver price trading up 25 US cents at $US6.55 an ounce, or about $AUD8.40 an ounce.

"We have said we will make a decision when silver is over $AUD9.00 and is sustained over that for at least a month or so," Mr McNeil said.

"But it is all ready to go, because we have the mining lease granted and all the environmental approvals are in place.

"We believe (the decision) probably will be made by about mid-year but that is a guess, I must emphasise that."

Mr McNeil said general market consensus expected the precious metal to make significant gains in coming months, with the decision to hold off the mine's development one of economic prudence.

"There are lots of people out there that think that silver is going to go as high as $US20 or $US30 or even higher, and a very large number of shareholders now believe that," he said.

"So we have a lot of pressure not to go in and start production at lower silver levels, because they feel we will basically sell the asset at an undervalued price."

Until the decision is made, Macmin will continue to explore and map out its resource base in the area, with revised resource figures expected by early March.

Meanwhile, Macmin's investment in Canadian-listed company New Guinea Gold Corp was progressing well, with production from one deposit expected to begin by early 2005, with a second deposit to begin producing later in 2005.

"So all in all ... we think this will be our best year since we floated which was in 1993," Mr McNeil said.

"That is based on the gold in PNG, the silver here in Australia, because we have resources in both, and the fact we think metal prices will keep on increasing."

Macmin closed steady at 20.5 cents today.

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The reason why MMN is waiting for a higher Silver price is that the cost per ounce is up there as well. It is probably economic on current silver prices, but they want to make sure the value is maximised.

 

Below is a summary of MMN's business, including cost structure:

 

BUSINESS SUMMARY

 

 

Macmin Silver Limited (MMN) is a minerals exploration and development company focused on exploration for silver and gold in Queensland. The company's main project is the Texas Silver Project, located in southern Queensland. The company also has a substantial investment in a New Guinea based gold exploration company.

 

 

Texas Silver Project: Reserves and resources at the project as at April 2003 were estimated at 7.85Mt @ 64.6g/t Ag equivalent for 16.3Moz Ag Eq and 19.1Mt @ 51.1g/t Ag Eq for 31.4Moz Ag equivalent. A four phase development plan has been adopted, commencing with higher grade ore and expanding as resource categories are upgraded. Costs of production vary from $5.15 to $6.50/oz of silver equivalent, depending on the development scenario. In March 2002, under the guidance of advisers, Macmin decided that the best course of action in the near future would be to focus on defining and proving up further reserves and to conduct further feasibility study work.

 

 

New Guinea Gold Corporation (NGG) (65%): In June 2002, MMN reached an agreement with NGG for the sale of wholly owned subsidiary Macmin (PNG) Limited to NGG. In consideration MMN will receive NGG shares and a royalty on any future production. NNG is a Canadian listed company. Macmin (PNG) holds title 7 exploration licence and 1 mining lease in PNG. In November 2002, MMN announced that bulk trench samples had returned up to 424g/t Au at the Imwanuna Project. Sehulea/Weioko Gold Project (NGG 100%): In August 2003, the inferred mineral resource was calculated at 1.7Mt @ 1.36g/t Au for 75,000oz Au and 12.3g/t Ag for 676,000oz Ag, using a 0.5g/t Au cut off.

 

 

Ecobond Pty Ltd (40%): An environmental remediation metals technology company.

 

 

TasGold Ltd: MMN completed the spin off TasGold in April 2003, allowing the company to focus on the Texas Silver Project.

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  • 2 weeks later...

IN REPLY TO A POST BY theflasherman, Wed 28/01/04 10:57pm   [READ POST]

The reason why MMN is waiting for a higher Silver price is that the cost per ounce is up there as well. It is probably economic on current silver prices, but they want to make sure the value is maximised.

Below is a summary of MMN's business, including cost structure:

BUSINESS SUMMARY


Macmin Silver Limited (MMN) is a minerals exploration and development company focused on exploration for silver and gold in Queensland. The company's main project is the Texas Silver Project, located in southern Queensland. The company also has a substantial investment in a New Guinea based gold exploration company.


Texas Silver Project: Reserves and resources at the project as at April 2003 were estimated at 7.85Mt @ 64.6g/t Ag equivalent for 16.3Moz Ag Eq and 19.1Mt @ 51.1g/t Ag Eq for 31.4Moz Ag equivalent. A four phase development plan has been adopted, commencing with higher grade ore and expanding as resource categories are upgraded. Costs of production vary from $5.15 to $6.50/oz of silver equivalent, depending on the development scenario. In March 2002, under the guidance of advisers, Macmin decided that the best course of action in the near future would be to focus on defining and proving up further reserves and to conduct further feasibility study work.


New Guinea Gold Corporation (NGG) (65%): In June 2002, MMN reached an agreement with NGG for the sale of wholly owned subsidiary Macmin (PNG) Limited to NGG. In consideration MMN will receive NGG shares and a royalty on any future production. NNG is a Canadian listed company. Macmin (PNG) holds title 7 exploration licence and 1 mining lease in PNG. In November 2002, MMN announced that bulk trench samples had returned up to 424g/t Au at the Imwanuna Project. Sehulea/Weioko Gold Project (NGG 100%): In August 2003, the inferred mineral resource was calculated at 1.7Mt @ 1.36g/t Au for 75,000oz Au and 12.3g/t Ag for 676,000oz Ag, using a 0.5g/t Au cut off.


Ecobond Pty Ltd (40%): An environmental remediation metals technology company.


TasGold Ltd: MMN completed the spin off TasGold in April 2003, allowing the company to focus on the Texas Silver Project.

being a high cost producer also results in greater leverage to the price of the underlying asset.

 

eg :

 

low cost producer

 

cost of production = $1.00/oz

POS = $5.50/oz

Profit = $ 4.50/oz

 

 

high cost producer

 

cost of production = $4.00/oz

POS = $5.50/oz

Profit = $1.50/oz

 

if the Price of Silver rises $0.50 to $6.00/oz, then low cost producers profits increase 11%, but high cost producers profits increase 33% !!

 

thats probably a simplified example but you will understand the logic. be careful however the reverse still holds in a falling price situation.

 

 

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