February 5, 2012

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Another China-Focused Silver Mining Company Comes under Attack

September 20, 2011 By Leave a Comment

Another silver mining company is being accused of fraud and inflated earnings. This time, Silvercorp, which operates silver mines in China, is the latest in a string of North American-listed China-focused companies to come under short-seller attack.

A group of short-sellers, who earlier this month accused miner Silvercorp Metals of fraud, outlined new allegations against the company on Monday.

In a new anonymous posting on alfredlittle.com, the short-sellers accused the company of inflating its earnings and provided details on some earlier allegations.

Complaints center around murky finances, or items in corporate filings that the short-sellers say cannot be substantiated. The company has dismissed all the anonymous allegations of fraud and accused short-sellers of attempting to run a “short and distort” scheme designed to drive down its share price.

Silvercorp shares were down 4.6 percent at C$6.50 at 11:10 a.m. (1510 GMT) on Monday on the Toronto Stock Exchange, while its U.S. listed shares were down 5.4 percent at $6.64.

This is definitely some interesting news, as Silvercorp is not the first – nor will they likely be the last, company that has had some serious allegations brought against them.

Keep an eye on these developments as they unfold. For now, you may want to stay away from doing any business with Silvercorp until this matter is resolved.

Filed Under: Silver Mining, Silver News Tagged With: , ,

Investing in Silver Mining Companies

September 10, 2011 By Leave a Comment

Investing in silver mining companies is an interesting prospect for many. However, if you do find a silver mining company that you want to invest in, then it is always important two remember some key factors before making you final decision on whether or not to invest.

Two main questions to consider are:

  • How Much Silver Does the Company Have in the Ground?
  • How Much Does it Cost to Extract That Silver and Refine It?

The answers to these two questions will weigh very heavily on your final decision.

Once you find out the answers to these questions you can put in a simple formula that will allow you to see if your investment will be good in the long run, or if you should turn around and take a long run away from the silver mining company.

Equation

The equation is simple. You find out how much silver the mining company has title to, as well as how much silver the mining company has in the ground (as stated above). When you have the number, you divide the market capitalization of the company (whatever it may be at the time) by those ounces. The number you get will be the cost per ounce of production. You can see then how much you are paying for what you get. This will tell you if the particular mining company is a good investment or not.

Remember, company CEOs will try to convince you that their mining company is a good investment no matter what. This is often not the case. If you take your time to do some research and implement the simple equation given above, then you should be able to make an educated decision on whether or not a silver mining company is a good investment or not.

Filed Under: General Information, Silver Mining Tagged With: , , ,

Silvercorp Mining Purchases Majority Equity in Two China Mining Companies

August 22, 2011 By Leave a Comment

Silvercorp just announced that its 77.5% owned subsidiary, Henan Found Mining Co. (“Henan Found”), signed a share purchase agreement to acquire a 90% equity interest in Zhongxing Mining Co. Ltd. (“Zhongxing”) and Chuanxin Mining Co. Ltd. (“Chuanxin”), two local private mining companies, with common owners, in Luoyang City, Henan Province.

We have already written about China starting to get involved more passionately with the financial sector of the world. They have also made the jump to being more involved in precious metals. It seems even big mining companies are heading to China to dig around some.

Henan Found’s total cash payment for the acquisition of both companies is approximately US $10.4 million, including US$4.3 million for the equity interest and US $6.1 million cash payment for outstanding debt. Henan Found has made 80% of the required total payment and has taken over control.

Zhongxing’s main assets include the high grade XBG silver-gold-lead-zinc (“Ag-Au-Pb-Zn”) mine with a mining permit covering 26.36 square kilometers (km2) expiring November 2022 and the adjacent NTM gold exploration permit covering 2.54 km2. Chuanxin’s main assets include a 350 tonne-per-day (“t/d”) floatation mill and an associated tailings management facility built in 2009 within the mining permit area, and an environmental permit to construct a 1,000 t/d floatation mill.

With the economy the way it is you can expect to hear more and more news regarding mining companies digging around in other countries for precious metals, especially silver. The purchase price the Henan paid was actually relatively low, and while they will make their money back with ease, it looks like they are shooting for a huge score and looking to find something unexpected in the next few years.

Silver continues to be the most popular precious metal and will continue to be because of the high demand that investors and industries have for it.

Cautionary Statements

The majority of this article was taken from a Press Release.

Blog Silver has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this Press Release.

Filed Under: Silver Mining, Silver News Tagged With: , ,

New Silver Mineralization Found in Upper Levels of the Santa Juana Mine by ECU Silver

August 19, 2011 By Leave a Comment

ECU Silver Mining Inc. (TSX: ECU.TO) is pleased to announce that through its ongoing underground development, it has uncovered the upward continuity of several mineralized veins known as the “A” veins package.   These veins were mined individually on level 17 and are currently being mined on the lower levels 18 and 19.   In the upper levels, from level 14 to 17, the veins were mined intermittently.   The total height of the active mining area where these veins are located, between levels 12 and 19, is 260 meters (853 feet).   The upward continuity of the “A” veins package, from level 12 to surface is 300 meters (984 feet).

In the block formed by the “A” veins package, there is a 100 meter (328 feet) long section where the veins are closer to one another and bulk mining can be considered.   In the mining levels between levels 12 and 19, the section of veins has an average width of 35 meters (115 feet) representing a total volume of more than 3,000,000 tonnes of mineralized material within the 260 meters (853 feet).

The information on the upward extension of the “A” veins package was recently discovered when the system was encountered while driving a new ramp starting on level 12.   A cross-cut was driven from that ramp to test the “A” veins package and the average following assay results were obtained: 1.18 g/t gold, 307 g/t silver, 0.33% lead, 0.36% zinc and 0.31% copper over a total drift length of 24 meters (79 feet).

Michel Roy, CEO and Chairman of ECU stated, “The upward continuation of the “A” veins package, with interesting precious metals grades, is encouraging as it constitutes a readily accessible source of feed for our flotation mill and any future expansion of our milling capacity.”

The Company is also continuing the deep drill hole below the Santa Juana mine and has now entered the target zone below the massive sulphide originally intercepted in drill hole SJ-18-21.   The drill has intersected 200 meters (656 feet) below the planned projection of the massive sulphide zone encountered above.   Mineralization was cut over a core length of more than 20 meters (66 feet).   Visually, it is a mixture of calcite, quartz and sulfides.   This appears to be a repetition of the variation in the mineralization of the A4 vein intercepts, 1,200 meters (3,937 feet) above, which is to be the upward continuity of this deep zone.   In the upper mined levels of the A4 vein, the mineralization vary from massive sulfides, containing high levels of lead and zinc with variable precious metals, to a mixture of calcite and sulfides with much lower lead and zinc but better average grades of precious metals and copper.   Assays are pending.

Michel Roy, CEO and Chairman of ECU stated, “There is a strong similarity of the mineralization in this first daughter hole compared to the mineralized material mined 1,200 meters (3,937 feet) above.   More daughter holes are planned as soon as this one is completed.”

On June 24th, the Company announced that it had entered into an agreement to merge with Golden Minerals Company (“Golden Minerals”) to create an exciting new junior precious metals mining company.   The details of the proposed merger have been documented in detail and have been sent out to the respective shareholders of each company.   Securityholder votes will be registered at a special meeting of shareholders for both companies to occur on August 30, 2011.

Cautionary Statements

Readers are cautioned that until a prefeasibility study is completed, there are no assurances these latest mineralized zones will be economically viable.

Blog Silver has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this Press Release.

Filed Under: Silver Mining, Silver News Tagged With: , , ,

Alcyone Resources Has Produced 100,000 Ounces of Silver Since April 2011

July 27, 2011 By Leave a Comment

The silver mining industry is booming in Texas, where Alcyone Resources has now produced 100,000 ounces of silver since the re-irrigation of existing silver-rich heaps commenced back in April of 2011.

This is more good news for silver investors, as Alcyone and other companies like them are on a mission to produce as much silver as possible. This is due to the fact that silver is so highly regarded with both investors and major industries.

There are actually several silver mining projects going on right now between some of the heavy hitters in the mining world. We had mentioned a few weeks ago that Bear Creek Mining had its coveted “Corani Silver Project” up and running. The news coming out of Texas from Alcyone is only going to fuel an even bigger fire for mining companies to get out there and dig.

News like this also makes for good investing, as silver continues to get hotter and hotter, and could see another price spike even with the debt crisis looming. Now may be the perfect time for you to start investing in some silver.

Filed Under: Silver Mining, Silver News Tagged With: , , ,

Bear Creek Mining Completes its Corani Silver Project Study

July 13, 2011 By Leave a Comment

Bear Creek Mining has recently completed a “Pre-Feasibility Study” regarding its Corani Silver Project and is now currently in the process of completing a feasibility study. Why is this important to silver investor’s?

The pre-feasibility study did indeed show that the Corani Project they have been working towards could very well produce up to 10 million ounces of silver per year!

With this information, Bear Creek is now preparing a new feasibility study at a 50% greater processing rate. The project is expected to produce up to 15 million ounces per year during its 20-year mine life. The Corani Project is also well endowed with both lead and zinc, so by-product credits will result in low or negative cash costs per ounce of silver. Even better for silver investor’s!

Silver is already a fantastic investment, provided you invest properly. The news the Bear Creek Mining should be able to go through with this project in the near future is great, as it will produce more silver, which is already in such high demand from both investors and major industries.

Filed Under: Silver Mining Tagged With: , ,

Portage Resources is Going Silver Mining in Peru

June 17, 2011 By 1 Comment

Some big news came out today regarding Portage Resources and their attempt to open more mines in Peru. Peru is the world’s largest producer of silver, and it is in the top 5 for producing gold and cooper (among other precious metals) as well.

The news that came out was also of interest to stockholders, as Portage stocks may skyrocket over the next year. This is also of interest to silver investors, as it is estimated that Peru is nearly 90% un-tapped in regards to its minerals and resources.

If Portage does indeed succeed with their new silver mining project, then the price of silver could be on it’s way up again. As we all know, it probably won’t be a small price jump either, as silver likes to gain huge numbers in a small amount of time.

You can keep up with Portage Resources and their latest developments from their website, as all of their press releases are there.

Filed Under: Silver Mining Tagged With: , ,

Investing in Silver Mining Companies

March 20, 2011 By 2 Comments

Often I’ll get asked through comments or direct emails about ways to invest in silver and sometimes even specifically about ways to invest in silver mining companies. More recently the ladder and I thought I would put together a list of some mining companies that I’ve followed in the past or have recently followed given developments in the world.

First up is the Silver Wheaton Corp (SLW:NYSE). This is probably one of the more widely known silver investing and sales mining groups which owns, operates or purchases from mines through the world and sells silver directly through these productions. Peru and Mexico to name a few. Their price at this writing was $39.90 a share, which was off from their 52 week high of just under $47.

Next up is Silvercorp Metals Inc (SVM:NYSE) which produces silver amongst other metals and in 2010 had produce 4.6 million ounces of silver. Currently they are trading at 12.84 which is shy of their 52 week high of $15.35. I personally like this company because they are diversified not only in locations with China and Canada among their mining regions but also that they produce Zinc and Lead as well.

Another one which we are a little more keen on than others is the Pan American Silver Corp (PAAS:NASDAQ). Now a quick run through the mining and producing companies will show high multiples (P/E) and a lot of worry for a standard value investor. But this isn’t standard investing in a commodity production company. Instead we look to the fact that within the industry the P/E for PAA is low and they offer a dividend, as low as it may be at 0.03 per quarter, but a dividend none-the-less. They have start to finish silver production and work in Mexico and South America with a solid upside if the price of silver continues to rise.

Finally, Silver Standard Resource (SSRI:NASDAQ). We’re a fan of this company because while PAAS has some better than average in the industry P/E ratios, SSRI blows it out of the water. Solid 6.42 multiple which should make a lot of investors happy. Also, the company is diversified with Canada, the Americas, and Australia operations. Silver production is looking good with this mining company.

Although we’re not qualified by any means to give you solid investing advice. We look at the above mining companies as good to watch and we’d consider them for our portfolio. Any more you wanna add?

Filed Under: Silver Mining

Tahoe Resources IPO funds Guatemalan Silver Mine Purchase

May 28, 2010 By 3 Comments

The Reno Nevada based company, Tahoe Resources, Inc. when public the other day to help fund acquisitions of mines that will increase revenue and margins for the resource company.

They’ve gone through with the sale of 58 million shares at C$6 a share to raise enough money to purchase a silver mine in Guatemala for $330 million USD. The IPO represented selling on the open market a 56 percent stake in the company which now, with this IPO has a market cap of C$624.

The company will be traded on the Toronto Stock Exchange under the symbol THO. The purchase of the silver mine was made from Goldcorp, the world’s second-largest gold producer based on market cap.

Filed Under: Silver Mining, Silver News Tagged With:

High Cost Mining Stocks

May 4, 2010 By Leave a Comment

Investors looking to get the most out of precious metals should look no further than high-cost mining stocks. While mining operations are traditionally leveraged to the change in price of the underlying commodity, high-cost mining stocks enjoy even more leverage due to the inner finances of the company. I’ll explain below.

High Cost Mining Stocks
High cost mining stocks are stocks that represent a company that pays nearly the full cost of a commodity to bring it to surface. An example of a high cost mining company would be one that spends $15 for every $17 ounce of silver it brings to the surface and refines. Because of the accounting, high cost mining stocks offer huge potential to the upside and are a favorite among investors looking to rev up their returns.

The Hypothetical
Let’s assume that there is a mining company known as XYZ Mining. XYZ Mining operates several silver mines and trades at a price to earnings ratio of 10. Also, the company is a high cost operation, meaning it spends $15 to produce just one ounce of silver. Let’s also assume that the company produces 1000 ounces of silver per year.

So, when silver is $16, XYZ Mining earns $1000 per year. ($16 per ounce X 1000 ounces – $15 cost per ounce = $1000 profit)

However, should silver rise by just 6% to $17 per ounce, XYZ would earn $2000 per year. ($17 per ounce X 1000 ounces – $15 cost= $2000 profit)

As you can see, a small change in the price of silver (6%) generated a profit increase of 100%. If the company were to continue to trade at the same Price to Earnings ratio, it would double in price with just a 6% change in silver prices. Now do you see the value in high cost miners?

Filed Under: Buying Silver, Silver Mining Tagged With: , ,