Update: Silver Bull Resources Provides An End-Of-Year Update For Its Sierra Mojada Project
- Silver Bull Resources' Sierra Mojada Project remains compelling in spite of low silver prices given its high grade large resource and zinc offsets.
- Management's expectations exceed those I put forth this summer.
- I like this stock as a silver/zinc option but before buying recognize the speculative nature of this stock.
Update: Silver Bull Continues Its Efforts To Develop The Sierra Mojada Project
- Silver Bull is currently working on a zinc-focused resource estimate at Sierra Mojada.
- This isn’t a surprise as back in September the company announced it was investigating the potential to become a zinc mine to cover an expected zinc supply shortage.
- The investment thesis doesn’t change, but I’ll be looking forward to see a zinc-focused PEA.
Buy Silver Bull Today, Get $2 Billion Of Free Zinc
- Silver Bull is an exceedingly rare asset: a huge resource in a mining-friendly area with great infrastructure.
- As zinc prices climb higher and the forecast calls for a supply deficit, Silver Bull is complementing its silver story by advancing the company’s 2.2 billion pounds of zinc.
- M&A in the mining sector has been perking up, and we think Silver Bull is an extremely attractive company for an acquirer to own.
- Silver Bull offers incredible optionality on higher silver prices, although the reversal in silver this year is a significant challenge to the company.
- We provide an interview with the company’s CEO.
- Silver Bull Resources is going to shift its focus to zinc in the face of a weak silver market and a strong zinc market.
- I had not anticipated this in June.
- This doesn't really change the investment thesis, which is that the Sierra Mojado Project's value is in its optionality.
Update: Silver Bull Will Now Focus On The Zinc Zones
- As the silver price is quite low at the moment, Silver Bull will investigate if the zinc zones could be mined as a standalone operation.
- This doesn't surprise me, as the fundamentals for zinc are looking better than for silver.
- The investment thesis won't be influenced by this news, but will have to be revised negatively because of the low silver price.
- Silver Bull Resources reported a loss of about $0.7 million in the second quarter, which is better than the second quarter a year ago.
- The company has a little less than a year's worth of working capital before it needs to go to the market assuming a constant rate of expenditures.
- As I argued in June, the stock's appeal is in its silver price optionality, and its recent weakness reflects this.
- The Sierra Mojada Project continues to lack appeal at $19/oz. silver and $1.04/lb. zinc making it a poor investment (but again, an excellent speculation vehicle).
Where Almost Counts: Horseshoes, Hand Grenades, And Silver Bull
- Silver Bull is one of the largest and most attractive independent silver resources around.
- The company has been advancing towards production and silver prices have been moving up, yet the stock price has moved down.
- Silver Bull has over $2 billion worth of zinc which it gets little credit for. Zinc is near a 3 year high.
- We argue that even critics would have to agree that this company is worth multiples of its current market cap.
Silver Bull Resources Is For Silver Bulls Only
- Silver Bull Resources appears undervalued compared with the company's stated value of its Sierra Mojada Project.
- However this stated value ignores several things that are vital from the standpoint of a conservative investor.
- While the project is worth more than the market cap of the company, this ignores financing risk, and the inevitable dilution that will hit shareholders.
- As a result the stock isn't undervalued, and I don't think it makes for a compelling investment.
- It does, however make for an interesting silver option proxy considering the leverage the project provides to the silver price.
Silver Bull: Another Cheap Silver Stock That Is Priced Like An Option With Major Upside Potential
- Silver Bull shares have drifted far below fair value and could be poised to rebound sharply with silver prices.
- Silver prices have shown signs of having bottomed out and could be poised to finally rise, as industrial demand increases due to global growth.
- The "smart money", which includes hedge funds, mining giant Coeur d'Alene, insiders and others, are invested in this company.
- Silver Bull Resources is debt-free and is developing one of the largest remaining silver deposits in North America - the "Sierra Mojado".
- The value of this deposit could be worth well over $2 billion, with roughly 164 million ounces of silver and 2.2 billion pounds of zinc indicated.
Silver Bull Resources Is Getting Its Ducks In A Row
Nov. 13, 2013, 10:05 AM
- Copper futures tumble to their lowest level in more than three months on concerns about the pace of Chinese economic growth; December futures fall more than $0.06 (-2%) to $3.17/lb., hitting their lowest level since late July.
- Copper and other base metals are suffering from rumors that the China will lower its 2014 growth target to 7%, says Commerzbank commodities strategist Eugen Weinberg.
- Meanwhile, China's eagerly awaited Third Plenum offered little support for markets, outlining only vague economic goals.
- ETFs: JJC, CPER, CUPM.
- U.S.-traded copper miners: FCX -0.8%, SCCO -1.8%, TCK, GMO, SVBL, TLR.
Jul. 28, 2013, 2:27 PM
- BHP Billiton (BHP) is betting strong returns from its copper business, even though copper prices are unlikely to rise in the near term, CEO Andrew Mackenzie says in an interview today.
- The China shift to a consumer-led economy from a construction-led economy will reduce demand, but it might not be as bad as had been thought. "I don't like to comment on prices, but we have to prepare for a copper outlook around the current price, or perhaps a bit lower, that is around $3 per pound," he says.
- Copper ETFs: JJC, CPER, CUPM
- U.S.-traded copper miners: SCCO, FCX, TCK, GMO, SVBL, TLR
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