Investor positions for upswing in gold and silver price.
SilverCrest Mines
Price: 98 cents
Shares outstanding: (approx.) 45,499,489
http://www.silvercrestmines.com
SilverCrest Mines (TSX: V.SVL, Stock Forum) has recently completed a study by Roscoe Postle and Associates which estimates annual production at Santa Elena in Mexico to be 30,000 oz gold and 500,000 oz of silver for eight years at a cash cost of $328 per gold equivalent ounce, which by today’s standards is cheap. The company has based at $1.00 support throughout most of the past 52 weeks with a few upswings in price due to positive drill results and other positive news delivered by the company.
I expect an updated resource estimate in shortly and also expect a large increase in resources at Santa Elena; my guess would be well over 1 million gold equivalent ounces. One thing to note is that this is a fairly higher grade deposit that could increase mine life due to some recently drilled higher grade zones at depth. They are also well cashed up and have easy access to cash if needed, which is a plus in my books.
I should note that Greg McCoach and the Coffin Brothers have a strong following on the story. As the turmoil continues to unfold with the closure of many more banks to come, I believe that you are going to want to secure some funds in companies that have proven assets in the ground with near-term production, or that are already in production, to generate cashflow, as many companies out there will collapse due to the unavailable funds for higher speculative companies.
Mexico has been a very mining-friendly country that has allowed many exploration and production companies to conduct business without much interruption by the government. Gold and silver appear to be setting the stage to break out in the coming weeks as investors start to rush into possibly the strongest currency worldwide (gold). This is a time to be cautious on markets as Fannie Mae (NYSE: FNM, Stock Forum) and Freddie Mac (NYSE: FRE, Stock Forum) along with many others who have been underwater for quite some time now start to crumble.
With a current market cap of just over $40 million, SVL appears cheap for a project that could generate $10 - $20 million per year in cashflow in one year or less. The coming months and weeks ahead could very well be a perfect storm for a continued rise in the price of gold and silver as the metals start to test their highs, and could very easily surpass them and mark new highs by a longshot.
It’s your money. Always perform your own due diligence.
Disclosure: Author is currently long SVL.
This article was written by a member of the Stockhouse community.
