As mining companies suffer through rough market conditions, royalty and streaming counterparts...

This news story has 8 comments:

Register or Login to rate comments »

jobehr Comments (19)
 
So, why isn't silver prices moving higher?
7 Feb, 01:18 PM Reply Like

frevcan Comments (6)
 
can you say bank & fed manipulation 3x fast!!!!1
7 Feb, 04:02 PM Reply Like

CCC999 Comments (15)
 
SLW is Merrill's top pick in the entire precious metal sector.
The recent gold streaming deals have since been announced and look to be a home run. I wouldn't be surprised if there was a short squeeze coming in short order.
7 Feb, 02:45 PM Reply Like

haleiwahu Comments (3037)
 
Personally I don't know if it's a homerun now or not. It appears to be overpriced based on todays prices and the volume of gold & silver needed to extract to bring SLW at a breakeven point. Check out the volume of PMs expected to extract at Vale.
8 Feb, 01:18 PM Reply Like

Sharplikecheddar Comments (78)
 
Hi haleiwahu,

Always enjoy reading your comments from the sidelines. One author on SA who I follow and has proven to be quite dependable in the past recently posted an article about SLW and VALE. I was curious to see if you read it and what you thought about his analysis as it is quite contrary to yours.

Just interested in both points of view and trying to conclude for myself. Thanks for all of your input and education you have provided in the past especially on Aluminum.

Here is a link to the article. http://seekingalpha.co...
8 Feb, 01:41 PM Reply Like

haleiwahu Comments (3037)
 
Aloha Sharp - no, i didn't read Chris' article but after your post, I did. I do very much agree that "gold, and to some degree silver and platinum, tend to have an inverse relationship with the dollar. The debt crisis in the United States that is eating the value away of the dollar over time further strengthens the case for the precious metals" and the fact that Global central bank stimulus will undoubtedly debase currencies worldwide, and thus, the tailwinds are in place to sustain a long-term bull market in precious metals all show positive reasons why SLW may have made a killer contract with SLW.

My concern is the high cost to acquire their purchases. SLW will pay Vale just under $1.9 billion in cash as well as give Vale 10 million warrants to the company for a term of ten years, at a premium price of $65 each. SLW will also pay ongoing allotments of $400 or the market price, whichever is cheaper, for each ounce of gold delivered. The beauty, is that SLW can than turn around and sell that gold and market and pocket the difference. SLW expects the deal to add 110,000 ounces of gold a year over the next 20 years (equating to 2.2 million ounces). And this is my only concern. Fiats losing hold is a positive factor which will undoubtedly increase price of PMs and i believe that this was the driving force behind the SLW pricing for the Vale purchase. Also taking into consideration that this contract spans over 2 decades is a strong positive.
11 Feb, 08:54 AM Reply Like

Sharplikecheddar Comments (78)
 
I see. Well I appreciate your feedback and input. Will be interesting to see how this all plays out. Thanks again for your response.
11 Feb, 12:06 PM Reply Like

Blest Horseman Comments (5)
 
thanks.
We first bought SLW in july of 05 at $3.15 a share. We added from time to time, but not on a regular bassis. We have allso sold at the wrong times but are very plesed with the company.
My wife & I were both born in the first Quarter of the last century,
and have not been able to invest much.
11 Feb, 01:15 PM Reply Like