Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)

Apex Silver Mines Ltd.(NYSEARCA:SIL)

The Wall Street Analyst Forum

August 14, 2007 11:10 am ET


Gerry Scott - President of Wall Street Analyst Forum

Jeff Clevenger - President and CEO


Gerry Scott

Our next company in this morning's program is Apex Silver Mines Ltd. They are a mining development and exploration company. The company is nearing completion of its flagship 65%-owned San Cristobal silver, zinc, and lead project, which is located in southwestern Bolivia. Operations are scheduled to commence in the third quarter of this year, with full production to occur during the fourth quarter. In addition to this, San Cristobal, Apex Silver holds an extensive portfolio of exploration properties located primarily in the traditional precious metal producing regions of Argentina, Peru, Mexico and Bolivia. Apex is traded on the American Stock Exchange under the symbol "SIL".

Just a reminder for the management, for the benefit of webcast attendees during the Q&A session to repeat the questions so that when the webcast attendees hear the answer, they have it within the context of the question. Thanks.

Jeff Clevenger

Thanks. I'm Jeff Clevenger. I am the CEO and President of Apex Silver. Welcome. Thanks for having me. We'll run through the slides and if you will, let's keep it a bit casual. If you'd like to ask questions as we go along, let's deal with them.

We've all studied this slide many times, I'm sure. What is Apex Silver? Well, right now, we're developing the largest developing silver and zinc mine, and it is in southwestern Bolivia. It's in the startup phase now. We've been commissioning since about December. We started up with the primary crusher and started mining at just about almost two years ago now, uncovering the ore and removing the overburden from the large open pit that will ultimately be developed in Bolivia.


The Wall Street Analyst Forum, a leading conference host for public corporations to address analysts/portfolio managers and professional investors, sponsors four annual conferences in NYC for large, mid and small-cap companies. Seeking Alpha readers may attend Wall Street Analyst Forum conferences free of charge if you pre-register. See the full conference schedule and attendance information.

Read all Wall Street Analyst Forum conference presentation transcripts here.

To learn more about sponsoring investor conference presentation transcripts see here.

We've picked up our exploration program. We were fortunate in attracting Sumitomo as a partner with us in Bolivia. We thought that was extremely important for a number of reasons, not the least of which was to give us some flexibility with the balance sheet, to give us some cash and probably more importantly, to have a very strong international and well-respected partner in Bolivia.

And the Japanese have a foothold in Bolivia for many years back, since, I think it was World War I. There are about 10,000 to 12,000 Japanese immigrants in that country, primarily in the agriculture sector. When the current President in Bolivia, Evo Morales was elected, Japan forgave just about $600 million in debt, and as you can imagine, that was favorably viewed. And recently the Japanese Government has been entertaining notions of resuming foreign aid. They have a policy of base -- when they forgive a large amount of money like that, they have a policy of not resuming foreign aid immediately, but rather to give it a bit of time and they're investigating potentially continuing that as well as investing in the country probably largely on infrastructure type projects, be it power, there is geothermal project that I know the Japanese Government is interested in.

By doing that transaction with Sumitomo, we were able to accelerate our exploration program. It's a large portfolio, a lot of which was established many years ago. We have sorted out the portfolio, if you will, we've let some properties go. When we let them go, we try to maintain an interest in case somebody sees something that we didn't think we saw. And we've picked up new projects, primarily with our entrée into Argentina, and we've emphasized Mexico much stronger lately.

The balance sheet is okay. The debt structure, we have $290 million of subordinated notes, low coupon, 3% and 4%. They would convert at 28.60 should that occur in the near future. And we have a 65% of a $225 million loan facility that was led by Barclays and BNP Paribas.

I can sit up here and talk forever about the wonderful management team, but you probably hear that from everybody. Just a little snapshot of where we are. We are in southwestern Bolivia not that far really from the big mines in Chile, copper mines, Chuquicamata, El Abra. You can see the hatched line there, it's the railway that goes from the port of Antofagasta and Mejillones, and comes across the border and ultimately up to La Paz.

We've built a 60-kilometer rail spur down to the site to haul our concentrates to the port of Mejillones, and we've built a dedicated facility at Mejillones to store our concentrates while we await a ship. We've made our first shipment. Those concentrates have arrived in Mejillones. So, all systems have basically been checked out.

Bolivia has a long mining culture. There has been a lot of, what we would call, mom and pop miners for hundreds of years, and they are really a powerful influence in the country. They were instrumental in helping Evo Morales get elected, but basically causing some havoc, road blocking, blocking roads and disrupting the economy of the country, and they are perfectly capable and of a mind to do that again should the government treat them unfairly, let's say.

I joined this company in October of 2004. I had retired for a while. I've been with Phelps Dodge and Cyprus Amax. Before that I ran Cyprus Amax's copper division. We built the El Abra mine in Chile, and the Cerro Verde mine in Peru. I've built my dream house and decided it was time to go back to work. And as I looked around, here was a company that had moved into Bolivia in mid 1990s and really set themselves up properly by taking care of the local community, helping the citizens develop programs, a sustainable development, moving a town of about 90 people some 20 kilometers away, drop them away from an area where they had no running water, no electricity and no heat. We set up a new town and moved the people into it, moved the church stone by stone and had basically done the grassroots type of effort that is required to succeed in a remote area. So, it looked like fun.

You probably have seen a lot of these. We all know what's happened to commodity prices and the commodities that we'll be producing are the same. The surprising one to me is lead, which is pretty surprising. It is almost the price of zinc. But as you can see, I mean, there's strong fundamentals. And interestingly enough, I mean, you take mines today, the price at which mines drop out now is going to be much higher on the downside than what it used to be because of commodity inflation.

People today are paying orders of magnitude, greater cost for tires, fuel, grinding balls, consumables and reagents. So, I guess I used to believe that, when I was in the copper business, the price will always go higher and the price will always go lower. I am not too certain that the price will go lower than it's ever been in our fundamental metals as we go forward.

Just to give you a snapshot of where the San Cristobal mine shapes up in terms of its production, this one is in silver. It's not the largest silver mine in the world, but certainly a significant contributor. The same is true for zinc. Not the largest, but the biggest one that's coming on line.

This slide here really gives you just some numbers that you can noodle with on a back of an end load basis. We have started production with the SAG mill and one ball mill. We'll have two ball mills in the circuit. The second ball mill is being commissioned and it will be up and running in September. And based on the success that we've had so far of maintaining 19,000 tons a day with one ball mill and the SAG mill, we're very confident in that 40,000 ton per day number. In fact, I would tell you, I think, it has some pretty good upside because we are now running the hardest ores being the intrusive and there's two types of ore. There is Lake Valley sediments and intrusive rock.

And you can see over the first five years, this is just an average of the payable metals, silver about 17 million ounces, zinc 225,000 tons or about 500 million pounds and lead 82,000 tons or roughly 200 million pounds. When we account for this project, we're going to do it on a co and by-product basis. The co-products being silver and zinc and the by-product being lead. So, in other words, the lead revenues less their cost will go as a credit to the silver cost. When you see that $2 per ounce of silver that we estimate for the first five years of production, that was calculated at $0.35 lead. Today, lead is something around $1.30, that cost should be negative. The zinc cost should flow through as is portrayed on the slide.

Again, we're starting production, we're ramping up. We think that sometime during the fourth quarter, we'll achieve full production and then the first quarter of 2008 should be a sustained quarter at the 40,000 tons per day rate. We'd like to be a little bit conservative. We'd rather surprise the street with good news as opposed to bad news. The mine has opened up the ore. There is about 3.5 million tons of sulfide ore stockpiled waiting delivery. Some of it’s lower grade, so we can pick and choose as we get the circuit balanced up and throw the high grade towards the mill as soon as things settle down a bit and we're comfortable that we're on a sustained basis.

This is a shot just rendering of what the current design of the mine would look like at the end of mine life. And you can see this area here Animas and then these areas around the pit. The Animas area has about 22 drill holes in it and some underground workings. We're fairly comfortable that there is certainly a mineable deposit there. And if you take a look at the, kind of, that ridge between the rendering of the pit in the Animas area, we have some holes in there as well. We did not hit ore. It’s possible that it’s deep. But we have to be realistic and we know this is a relatively low grade, large volume type of ore body so that in the longer term it’s probably less likely that that would be mined if it’s even there. But there's good enough indications in the Animas area that indeed we will have something to mine there.

If you look on the right hand part of that slide, the lower quadrant of that is where the old town of San Cristobal used to be. It, again, has been moved and we had already done the drilling when the town was moved and we didn't see any real motivation having, over 200 million tons in front of us to go in there and drill that, but rather focus our attention on building the plant and training people to run the plant.

And you can see an area just kind of up the bottom left, that's area as well called the Colon area and it has indications of possibly producing some high grade ores. We'll be drilling those areas in the next couple of years. We need to first get the plant up and running, see exactly what it will do, how much better than 40,000 tons a day we can get, identify exactly what the bottlenecks are and see what it would take to de-bottleneck them, and that would all be coupled with the drilling and an analysis as to the viability of an expansion.

Toldos is an area that's been mined in the past. It was primarily underground and then crushed heap leach, silver operation. We've got good values of silver over there. But that’s something that we'll be addressing in the next couple of years.

This is a picture of the mill, primarily as it looks today. It’s a little dirtier now, I'm pleased to say and that’s because it's operating. We achieved mechanical completion in the month of June. And again, we've made our first shipment of concentrates to the port in Chile.

This is a picture of the SAG mill. it's about 37 feet in diameter, about the largest one that is made. We kind of looked out. In 2004, we pre-ordered the long lead time expensive items, which include the SAG mill and the two Ball mills and some of the flotation equipment. Had we not done that, this project no doubt would be well over its budget. But by doing that and fixing the price and guaranteeing the delivery times, we were able to proceed.

This is just a picture of the flotation section. Everything is essentially running except the number two Ball mill. Here are some of Bolivian employees, learning how to operate the plant. It’s all computer process control. It takes very, very few people to run this plant. I would tell you that based on my experience we over-manpowered this thing, and there's a reason for that, because we need to keep the local grassroots support that we have and essentially employ those that we can put to work doing constructive tasks.

We thought we'd have a problem ramping down from 5,000 construction people to under a thousand. It's turned out better than we thought it would. We have 5,000 people with really no other place to work. We thought that could be somewhat of a stressful occurrence for us and for them. And fortunately, that's turned out fine. And again, I can't overemphasize the value of the local support that we have in the community.

We are hooked to the Bolivian grid. We ran a power line 180 kilometers to the Northeast and tied into that grid that is supplying the power for the SAG and the Ball mill. The bottom picture shows you a train that came in -- the initial train that came in to bring ballast to put between the tracks. In the background you'll see the mill facility and then even further back than that up a bit higher you can see the mine in the background.

There is your new slide. This is a shot actually just two weeks ago. We were down there visiting the team, congratulating them on a number of things. Not only startup, but achieving 12 million man hours without lost time accident. As far as we know, that's all time record in the industry, unheard of. So, we're pleased to say that we like to think we're setting a standard for safety and people working together and looking out for one another.

Here is a shot of the concentrate containers. This is a bit different. Most mines that I've been around in the past, when they do ship by rail they typically load them into hopper cars and then they will go to their destination, with some of the product actually blowing out of the cars or it can rain hard and it will turn it all slimly and wet and the ships will turn it down.

We decided to build these sealed containers for a couple of reasons. One, the concentrates are going across the driest desert on earth, the Atacama Desert. So, we don't want lead concentrates blowing around in the desert. We don't want to lose our product, and we also were able to now be able to hold these concentrates instead of having to build the fleet of hopper cars we could put them on flatbed cars and secure them for their journey down to the coast.

Here is a shot of the port facility. It's a dual port. You can see a large black blob in there, that's a big pile of coal. There's a power plant there. We're just to the right of that in a triangular shape building, which will store the concentrates. The concentrates come out of that building and then right as they get to the shore line there, it's a conveyor that actually rolls itself up and becomes a tube. So, here's the conveyor coming along flat and then it hits to this mechanism that makes the conveyor roll up so that the concentrates are secured as they go out to the ship for loading.

We've got some, little roughly a dozen contracts for our concentrates, both lead and zinc and it's catered throughout the world from Australia to Europe to Korea and Japan.

On the left, you can see the church that was moved stone by stone. It actually was put back together in better shape than it was from where it removed from, and I say that because we discovered that behind some of the layers of paint in the church were some minerals that the local residents had never seen. They apparently have been painted over a hundred or more years ago. Through the help of the local communities and with participation of the government, we got an expert that knew how to renovate such a thing, and he was able to strip paint off and now there's been absolutely spectacular ancient mineral inside the church that was always there but you couldn't see it because of the paint.

In the community, we've done a number of things. We've set up some businesses gas station, hotel that has a little bar. There is a greenhouse that's quite large. It grows vegetables for three communities. We've helped train people on how to grow vegetables and of course, we've built the facility for them. Drinking water supplies, again, I mean, people now have running water, they didn't have that before. They have toilets, they didn't have those before. There is modern school. We focused in the early years on healthcare and setup clinics. The infant mortality rate in the local communities is dropped from something greater than 50% to less than 5%, and so, we went into Bolivia and behaved ourselves.

We say, we're well financed for growth. What will that growth be? We don't think that, we've got anything -- we don't have anything smarter than what the street has, I mean, the street is able to value companies. We don't see that for us to go out and buy somebody for the sake of buying makes any sense. It would have to be something that indeed where the two of us combine together produced some synergies, if you will, and that could be a number of things.

We've got a seasoned operating team with many years of experience. We might identify something that we could do differently to make operations better or conceivably we may find something that is in an area that we're in and if we could do some consolidation on land positions. There's nothing really generating in the hopper today, but we've always got our eyes open.

We beget obviously that in the very short term within the next month the operation will be self sustaining and outside of the operations our deal with Sumitomo includes payments or essentially royalties based on silver, zinc production and price.

In silver, if you take 8% of the total production of silver and multiply it by the price of silver that comes to Apex as a payment from Sumitomo outside of Bolivia. In terms of zinc, if you take 7% of the zinc production and multiply that by the difference between whatever the prices of zinc is, an $1800 a ton that also is the payment to Apex outside of Bolivia. At today's prices, I don’t know, they'll stay there, but that’s in the neighborhood of $40 million plus a year.

Again, we've unlocked the exploration program. We've picked up new properties. We've depleted ourselves of older ones that didn’t make sense for us, and we started drilling. And we've now drilled something in the order of six to eight projects. We either have drilled or are drilling a couple of which or at least one primarily that definitely warrants more drilling. At the risk of being bold, I would tell you that it's likely a discovery. We'll see when we get enough drilling to do a feasibility study and to see if we can build a mine there. But that would be the El Quevar project in Argentina, and we have several others in Argentina of interest as well as in Peru and Mexico primarily.

Our work in Bolivia on the exploration front is basically on hold. There was a supreme decree issued some months ago by President Morales that said that any future concessions would be granted through the state company Comibol. But however, he did acknowledge that existing concessions, which is the case of San Cristobal, are fair and valid. So, that will probably get challenged in court as to its constitutionality, but it certainly did indicate where President Morales is thinking in terms of San Cristobal and some other investments that companies are making.

This is a project in, the El Quevar project in Northern Argentina. We started out with a joint venture with Minera Hochschild from Peru and some of you may know them or may not, I think they did an initial public offering about a year ago on the London exchange. It's kind of a family oriented, operated company lead, zinc, silver out of Peru.

The deal, we had a large chunk of ground in this El Quevar area, as did Hochschild. And to really take a look at it, before you start to take a look at it, you have to figure out, well, how are you going to get the land you needed to if you found something in? So, we talked to them and we arranged a joint venture and we said, hey, look, if we find gold, you can earn 65% of refined silver, we can earn 65% of silver, has been the mineral that’s been identified.

We have drilled over 30 holes there now and the geologist would tell you that most of those are ore grade. Well, I'm mining engineer, ore grade is, if you can prove that it's economic that a definition of ore. But having said that, their definition of ore grade was something greater than three ounces per ton.

I know it looks good, and we have got some cross sections here. It's a large area it's about 150 square miles. There is a different series of veins. This particular one that we have drilled is about a kilometer and a half long. So that's roughly a mile, and we've got drill holes almost a kilometer apart. This particular section here, I don't know if you can read that, but we're showing some of those intercepts are up to 50 feet of 15 ounces per ton.

There is another intercept there. It's about 30 some feet of -- they are about the same. And there's also some bonanza type grades in some of the other drill holes. This is the first target area. Again, there's a couple of these systems of veins as well as there's a large bridge poking up out of the ground that's partially covered. That's something we need to drill as well. And I'm kind of big mind guy, so I'm kind of anxious to look at that bridge and see if we can find something. This is good but, I mean, to make up really large impact in a big mine you need to start looking at the bridges which we will be doing.

Just another shot this one again almost a 1 kilometer away, 750 meters, 32 holes again out of 36. We have hit this type of mineralization and it's encouraging to say the least, and we haven't even hardly started exploring it with 32 holes.

This is another project in Argentina, you can see where that is. It's basically southeast of that El Quevar project. We've really just started working on this. We just picked it up, so we don't have a lot of information. The geologists are on the ground doing their mapping and trenching but there was some work done years ago.

A few holes drilled here and there and you can see some of the drill hole intercepts on the property, 100 meters, that's over 300 feet of 1.6% zinc and a couple of ounces of silver and different samples from different parts of this area that we'll be exploring. So, we'll see. We need a lot of work to do to see what we have there but it certainly, from surface indications and past work, is most encouraging.

In Zacatecas which is a large silver-bearing district in Mexico, it's been mined for probably back to the Incan days and by all calculations over 1 billion ounces of silver has come from the district. We control about 60% of that district. And you can see that lineation on this map identified as the Muleros Target. If you come south, there is another large area, south from that another large area and the shaded areas is the Apex ground condition.

We have started drilling the Muleros Target. Unfortunately, it’s taking a long time to get turn around on assays and that's because the assays labs are so busy with the prices the way they are. But visual indications are that indeed the vein has the minerals that we're looking for.

And this is just some of the proposed drills and some of the trenching surface samples have shown indications of up to 15 ounces per ton and there's multiple veins just in this one lineation and of course, we've got those other lineations to the south.

This is the first hole. Again, we don't have assay data, so there is not a whole lot to be quantified in this, but it did look like we get about 30 feet of mineralized vein and when we get the assays we'll be certain to share them with you.

Another project is Santa Isabel project, which is located just south of Silver Standard’s La Pitarrilla project. That's a project with about 50 million ton or 4 ounce material. We think that with similar geology, similar mineralization and we have actually drilled a couple of holes here. It's a good size land position. You can see ours down there in the red, silver standards to the north and a couple of targets that we've identified.

And here is the first hole we drilled. Does it make a mine? No, not yet, but it's a certainly a good indication when you've got 5 meters or over 15 feet of 10% zinc, 4 ounce silver and then following down the structure with some other smaller intercepts. And some of the other holes by visual indications looked very similar. So, we're encouraged to that one.

Our immediate goals are to get San Cristobal up to full production sometime during the fourth quarter, and I'm optimistic that we can beat that, but that's what we're saying and we will bank on that. We say that, not only do we have a partner with Sumitomo, we really do have an alliance.

I go way back to the 1980s, I worked with them when I was with Phelps Dodge, and they are a partner of choice. They are just a great partner and moving forward, I think it’s both of our intentions to do more together. We need to identify what's in this large exploration package that we have, and start unlocking some value in it and if not, we need to move on and get rid of those projects and pickup other ones.

Questions, no questions?

Question-and-Answer Session

Unidentified Audience Member

Yeah, any indication of when the mining attachment other continued degree or whatever they call them in Bolivia are going to stabilize and would you know exactly where you stand? Any idea when that will shape up?

Jeff Clevenger

Well, I'm suppose to repeat the question. The question is, do we have any idea of when the mining decrease, mining taxes, mining code would stabilize in Bolivia. And I think the direct answer to that is, no. We're certainly working with the government. We're working with the help of our Japanese partner. We're working with the help of the Japanese ambassador or the American ambassador and others to get a strong dialogue with the government so they can recognize the position we're in. I mean, we've got a large hedge book that we don't like one bit. But the reality is, we have it, and it was necessary to get the $225 million loan.

And it was put in place right before metals prices began their ramp up to where they are now. So, that's something we can deliver against. There is no margin calls on it other than a bit of money, $90 million that we agreed to put in the holders that the hedge fund, Barclays and BNP into their bank as somewhat of collateral for three years with one-third for giving over each year. But other than that, there is no call on it as long as we deliver. So, for us to deliver is extremely important.

Back to the question, I mean there has been ever since President Morales was elected, there has been a lot of talk, there has been a lot of comments, there has been a lot of arm waving that in my view was directed at appealing to his constituency. And he jumped up on the back of the truck and nationalized the oil sector a year or more ago. In reality, it wasn’t nationalized. That’s the word that is used, but contracts for the oil companies were basically solidified and put to Congress to approve, which is what is required by the constitution and that's ongoing.

In terms of mining, definitely there is an effort afoot to increase state control, and to-date, that’s been done with the kind of the rebirth of Comibol, which is a state mining company. We haven’t had anything changed for us and in fact, we were able to get about $22 million to $23 million of tax exemptions that we were uncertain if we would get, but we did, and that certainly helped us, as we are building the project.

There is a stronger effort afoot now to change the mining taxes. And if you look at that, it’s a significant increase. I mean, the tax rate now is 25%, it adds 12.5% to that and it changes some of the deductibility of some of the other taxes, if you will. There's other taxes that are called the Complimentary Mining Tax, which is essentially historically has been based on metal’s price and it could go up to 5% or 7%, and go as low as 1% in low price environment. That has been creditable to income tax in the past. So, part of the latest proposal, and look, we've run numbers on it, at least a dozen different proposals that have come along, that would change in the current proposal.

We've been talking to them. This potential bill has past the lower house, it passed very quickly. And we now are working through the senate to get some modifications to that bill. Our position is that we made a huge investment in Bolivia, in our local communities, and in the operation that we've built. And we did that with a bit of faith and a bit of trust in the Bolivian people and the Bolivian government to treat us fairly and honor and respect the tax regime that was in place when we made that decision. So, that’s pretty much the position we're taking, and hey, we'll see where it goes. But so far, nothing is changed.

Unidentified Audience Member

My understanding is that the Minister of Mines was somewhat helpful in that case or --?

Jeff Clevenger

We've had helpful indications from him. But until it’s all signed, sealed and delivered, it remains to be seen. But we've had positive indications from the man. We've had positive indications from the Minister of the Presidency, who is very close to President Morales. Yes?

Unidentified Audience Member

[Question Inaudible].

Jeff Clevenger

No, it's not an issue. We built 60 kilometers spur to Rio Grande, which ties in with the railroad. We've made our first shipments and so far so good.

Unidentified Audience Member

So you're not trucking, you are delivering by rail?

Jeff Clevenger

No. The trucking would be huge.

Unidentified Audience Member

The other thing is, your charts show an explosion of when the zinc prices at a certain point compared to the factors you discussed, the factors that led to that and the prospects of future growth into that?

Jeff Clevenger

To the prices?

Unidentified Audience Member

Yeah. Well, what caused that spike up? Are those causes likely to be with you?

Jeff Clevenger

I think the question is, what caused the spike in prices for the commodities that we are producing lead, zinc and silver, and what is the crystal ball for the future of those prices? And a couple of comments, I mean, what caused the price to sky rocket of course, I mean, it’s obviously, it’s demand and it’s coming from China following up from India.

The other thing that caused it was, I mean, if you take a look at in the case of zinc, I mean, zinc prices were depressed for a long time, so nobody invested in the business. And without sustained investment, it's a matter of time till the balances of supply and demand catch up. Now, is that going to change? There is more zinc production coming on line. I can speak better to zinc and lead because I understand it a little better. Silver while there certainly is industrial demand and uses for it, there's a lot of, if you will, emotional influence on the price, much the same as gold.

But in terms of zinc, my personal opinion is, I don't see turning that engine of growth around in China. I mean, those people are starting to get accustomed there to having toys and cars and motorbikes and modern day things, and I'd be very surprised if that stops. I mean, a lot of people worry and panic about the growth rate in China slowing down. Well, so what if it slows down. It still established a new basis, a new benchmark. It's much, much greater in terms of consumption of basic commodities than it used to be. So, will it go down? Sure, it'll go down. I don't think prices in these commodities will ever go as low as they were before. And I'm sitting here to tell you that five years ago I never would have made a comment like that.

Unidentified Audience Member

Besides the batteries which I could imagine what are the uses of lead and zinc?

Jeff Clevenger

Well zinc is largely coating for steel and that's not just cars, but it’s infrastructure. I mean, with the power poles, and the bridges, and the buildings, and the iron buildings that are being built, it's primarily zinc coated. Lead, I mean it's mostly batteries and one would think over time that recycle stream is going to catch up with the market. It hasn't done it yet. There have been some problems in the supply chain and prices are far beyond what anybody ever dreamed they could be. I think lead will subside some what. Zinc, I'm fairly bullish on zinc, which is good because that's mostly what we're making.

Unidentified Audience Member

But they do come together. So the cost of mining would increase if by itself, a possibility.

Jeff Clevenger

Yeah, that’s true. And then here when we discussed the by-product, co-product accounting we're doing, co-products are zinc and silver with lead being a by-product of silver. So, it's going as a credit to the silver cost. So, [Pablo] will get you a handout and in the presentation you will see a chart that shows the average production over the first five years, and the cash cost of that production assuming zinc is $0.35, today's zinc price, the silver cost is actually negative. No other questions. Thank you very much.


The Wall Street Analyst Forum, a leading conference host for public corporations to address analysts/portfolio managers and professional investors, sponsors four annual conferences in NYC for large, mid and small-cap companies. Seeking Alpha readers may attend Wall Street Analyst Forum conferences free of charge if you pre-register. See the full conference schedule and attendance information.

Read all Wall Street Analyst Forum conference presentation transcripts here.

To learn more about sponsoring investor conference presentation transcripts see here.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to All other use is prohibited.


If you have any additional questions about our online transcripts, please contact us at: Thank you!

This Transcript
All Transcripts