/biz/ - Business & Finance

>>26017950

Silver miners should already be nearly triple what they are at $25 silver. Silver miners are the most undervalued assets on the planet. When the paper games end and silver gets over $30 they are going to soar to the moon. Simply need to be patient and wait for the COMEX paper games to break.

>>26004720

Unless they are seriously underforming SILJ (by 20% or more relative to the day they bought) then people need to stop obsessing about the daily price-movement of mining stocks. Almost all of them are severely depleted in price; even the producers need to more than double to reach fair value. Many trading at 1-4x cash flow. Nothing matters until silver goes over $30. Then you will see the miners quickly soar and catch up not merely to fair value relative to today's silver prices but to the new silver price. Most investors are simply waiting for confirmation that the silver bull market is real, and that silver isn't sinking down to the sub-$20 suppression-range again.

>>25939157

March - August is simply a baseline, they're going a lot higher at $45 silver. Should already do what they did from March - August simply to bring us back to fair value at today's silver prices.

>>25801075

If you bought a mining stock within the last seven months and it's going down, don't worry about it. All this is temporary dislocation. Miners were almost never so undervalued in history. They ought to be double or triple what they are on the basis of fundamentals, even if metals don't go a dollar higher. Dividend-paying producers are trading at absurdly low P. E. ratios like 8, or 2x or 3x or 4x cash flow.

>>25697350

Nobody is interested in buying the top of your ponzi, shill.

>>25651603

Starcore also has 2.2 million silver ounces. The reserves are enough for a 10-year-long bull market. Valuation when compared to cash flow is the most important thing. Starcore is trading at less than 3x cash flow. In miner bull markets, stocks often trade at 30x cash flow. Starcore itself did so before. So that gives Starcore 10x potential even at the current price of the metals. Only reason why I don't own Starcore is because I think that Bayhorse is better, since it is trading at under 1x cash flow if everything goes to plan; but if Bayhorse goes up and Starcore doesn't follow I will reallocate. If you don't like Starcore see Great Panther which I mentioned before, which is at only 4x cash flow and has more reserves.

>>25319080

I completely agree with everything you say, the gains in this miner bull market will be enormous even in the well-known producers. But I'd add that the attraction of looking for the few worthwhile microcaps is that they _do_ still exist, and afford enormous opportunity. There will be a time when the ridiculously cheap opportunities don't exist any more. If you bought Klondike at a $10 million market cap, you will make 10x when it goes to $100 million, but if you get in today, you only make 2x. When it goes to a billion-dollar market cap, you will make 100x, but the person who bought today only makes 20x. Still a lot of money, but I'd rather hunt for the 100x than the 20x. Or again, I'd rather make 1000x than 200x.

>>25294420
>>25294766

Explorers give the most leverage to the upside, but one safer way to make money in a miner bull market is simply to purchase undervalued producers. 10x cash flow is considered normal for a strong miner, and in bull market manias, mining stocks can sometimes trade at 30x cash flow. Most of the silver miners are presently trading at absurdly low market caps relative to cash flow. Great Panther, for example, is trading at only 4x cash flow. Miners are very undervalued, even at current silver prices; and in fact, one analyst said yesterday that they were almost never more undervalued than they are right now. But then consider what happens to them as silver rises. A miner which spends $17 to produce a silver ounce, and is barely breaking even at $18 silver, is going to make a fortune at (say) $50 silver. If it produces (say) a million ounces a year, that's 50-17 = $33 per ounce in profit, x 1 million = $33 million in cash flow. Hence, if the market cap of this hypothetical producer is only (say) $50 million today, then you might expect it to go to $330 million at $50 silver, and go 6.5x simply on the basis of fundamentals.

Investing on the basis of drilling hopes _is_ a gamble, but you can derisk the investment considerably by investing in good companies which drill in territories which are known to be promising. For example, Dolly Varden silver has a competent management team, a lot of cash, no debt. They have 100% ownership of 88 km in the so-called "Golden Triangle." They have 4 past-producing mines on their property, one of which is the Dolly Varden mine, one of the most famous silver mines in Canadian history. Between 1949 and 1959, the Torbrit Mine alone produced 18 million ounces of silver. The company has a proven 44-million ounce resource already. Eric Sprott is heavily invested. I consider this to be one of the safest silver investments there is, despite the fact that it is a drilling explorer. The history convinces me of it.

(2/2)

>>25294420
>>25294766

Explorers give the most leverage to the upside, but one safer way to make money in a bull market is simply by purchasing undervalued producers. 10x cash flow is considered normal for a strong miner, and in bull market manias, mining stocks can sometimes trade at 30x cash flow. Most of the silver miners are presently trading at absurdly low market caps relative to cash flow. Great Panther, for example, is trading at only 4x cash flow. So miners are very undervalued, even at current silver prices. In fact, one analyst said yesterday that they were almost never more undervalued than they are right now. But then consider what happens to them as silver rises. A miner which spends $17 to produce a silver ounce, and is barely breaking even at $18 silver, is going to make a fortune at (say) $50 silver. If it produces (say) a million ounces a year, that's 50-17 = $33 per ounce in profit, x 1 million = $33 million in cash flow. Hence, if the market cap of this hypothetical producer is only (say) $50 million today, then you might expect it to go to $330 million at $50 silver, and go 6.5x simply on the basis of fundamentals.

Investing on the basis of drilling hopes _is_ a gamble, but you can derisk the investment considerably by investing in good companies which drill in territories which are known to be promising. For example, Dolly Varden silver has a competent management team, a lot of cash, no debt. They have 100% ownership of 88 km in the so-called "Golden Triangle." They have 4 past-producing mines on their property, one of which is the Dolly Varden mine, one of the most famous silver mines in Canadian history. Between 1949 and 1959, the Torbrit Mine alone produced 18 million ounces of silver. The company has a proven 44-million ounce resource already. Eric Sprott is heavily invested. I consider this to be one of the safest silver investments there is, despite the fact that it is a drilling explorer. The history convinces me of it.

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>>25290132

All you have to do is understand cash flow and the leverage which higher silver prices will afford to it to know that, yes, the past _will_ be the future. If it costs you $17 to produce a silver ounce, and silver goes to $300 an ounce (less than half of its inflation-adjusted 1980 ATH of $800), and you produce a million silver ounces a year, then what's your cash flow per annum at $300 silver? Then consider that good mining stocks trade at 10x cash flow, and at 30x cash flow in miner bull markets. Are you starting to understand how stocks which only have a $100-300 million market cap at present are going 150x yet?

>>25213892
>>25213718

There is infinitely more upside potential in choosing your own miners. But even so, I find the ETFs to be useful tools for judging of the current state of mining stocks as a whole. GDX and GDXJ, SIL and SILJ going down are a symptom of how undervalued all these miners are right now, whether they be large-caps or microcaps. The P. E. ratios are absolutely ridiculous. Kinross, for example, is at _8.5_, and many other producers are at similar levels. 15 is considered a "fair" P. E. ratio, and most of the mainstream stocks are trading at double that or more; Amazon has a P. E. ratio of 90, and TSLA of _1300._ Again, I mentioned in a previous thread that Great Panther, a $300 million silver producer, is trading at only 4x cash flow (10x is respectable for a good miner, and, in the 70s and 80s bull-market mania, many miners even traded at 30x cash flow). I don't doubt that the miners have hit a bottom, and will turn up again soon. Their CAPEX will catch up with the gold price (see picture). Gold going over $2500, and silver over $35 would probably give us as many gains as we saw from the March low to August.