PART I

Had difficulty posting all at once because supposedly "profane" words were found. Stockhouse does not identify these words so I'm forced to publish in multiple parts to try and identify problem.

This is Hard Assets: Thoughts from San Francisco

This November 16-17th we attended the Hard Assets investment conference in San Francisco. We hope you can understand that our juiciest investment ideas can only be found in the full, premium "Best in Show" version of this post. Nevertheless there's still plenty of insights below for resource investors, otherwise known in the current dismal retraction stage of the market as masochists. But of course the stubborn hope is that some day -- the sooner the better -- gold "goes to 11" and the resource stocks with it.


One might look around and think identifying stocks with "11" potential is easy business in such a battered market ... after all, everything is so darn "cheap". The reality is that many of these companies are having an extremely hard time raising funds on good terms in order to keep the drills turning and the hope alive. Dilution or even just the threat of it is going to severely limit the upside in many cases. What follows are the key takeaways from a variety of companies we met with during our busy stay in San Francisco:

SilverCrest Mines (TSX-V: SVL; AMEX: SVLC)

The main focus of our discussion was on the La Joya exploration project where simple back of napkin math suggests at least a doubling of last year's initial silver-copper resource. Hopefully this is accompanied by a breakout of a higher grade "feeder zone" resource that SilverCrest could potentially develop on its own at a reasonable capital cost and time line. We also noted again how La Joya basically sticks out of the ground (the deposit is essentially a big hill) and this should reduce mining costs thus allowing lower-than-normal grades and cutoffs. As we mentioned previously, SilverCrest at $2.50 basically gives value only to the Santa Elena operation (especially since it was recently "de-hedged") and that means potential upside exists as La Joya is moved toward development.

Disclaimer: We don’t currently own shares in any of the above companies with the exception of Verde Potash, Western Pacific Resources and Golden Predator. We do not receive compensation for our commentaries from any party and we have not received compensation from any of the companies mentioned. This is not investment advice, which you should seek from a licensed investment professional.