lance sjogren

Why Silver Beats Gold as a Precious Metals Play

Forgot to mention.

Sabina has embarked on an extensive exploration program this year- they very well may be able to rack up expansions of their silver/base metals and gold deposits.

Also they acquired a large amount of additional property in the region as part of the acquisition of the gold deposit, rendering them the dominant property owner in the area, one which very well could prove to be a major mining region in the long term.

Why Silver Beats Gold as a Precious Metals Play

Long term I do expect silver to far exceed gold, although they have had a recent run so don't discount the possibility of short term correction.

In my view you don't necessarily need to make a choice. In my estimation, the biggest bargain in silver is Sabina Silver which has a deposit in northern Canada containing 230 million ounces.

With zinc and other base metals along with the silver, it is pretty decent grade for a deposit that will largely be open-pittable. (a little over 3 ounces silver per ton plus a comparable value in the base metals)

Oh, and by the way they recently acquired a 2 million ounce high grade gold deposit in the same geographic area.

All their minerals add up to an in-situ value of $9-10 billion.

The fully diluted market cap is about $130-140 million. They have about $30-35 mil cash, so fully diluted enterprise value (not including the cash they would get from warrants, etc being exercised) is about 100 mil.

So you have close to a 100 to 1 in-situ value to enterprise value ratio.

That means you are paying $10 per ounce of gold equivalent or $0.15 per ounce of silver equivalent.


Why so cheap? It is in a remote area of Nunavut province and there is a need for a port to be constructed at Bathurst inlet and a road built to the properties.

However, with their recent acquisition of the gold deposits, they are building a larger resource base on which to support the capital costs.

(although I hope that when the time comes they sell the properties to a large mining company rather than engaging in a "do it yourself" operation)

There are some other mineral deposits in the area owned by others that could help provide a broader resource base to fund infrastructure- e.g. the Chinese acquired two base metals deposits in the region from Oz minerals earlier this year.


It's the cheapest silver I know of, and you get some high grade gold and base metals thrown into the bargain.

Short Squeeze in Silver - How to Profit

I like silver, my main silver stock is Sabina Silver.

In my view they are the best choice if you prefer to invest in an exploration-only company that is sitting on a known deposit.

Their net cash position is a large portion of their market cap, if you back out the cash you are getting silver in the ground in a large deposit with a good grade of silver and other marketable minerals for something like $0.10 per ounce of silver equivalent. Plus, the deposit is in politically-safe Canada. It is in a remote area, however, so whoever eventually develops the deposit will have to incur major capital cost. But the deposit is big enough to be able to support such capital expenditures.