 Wallace Street Journal
A litter of kitty-cats, all on the cheap
David Bond
Archives
Editor, Silver Valley
Mining Journal
January 7, 2005
Wallace, Idaho (6 January 2005)
- We were going to take the route of most bored journalists and
pundits to write a 2004 year-end review - which inside newsrooms
is referred to as a "thumbsucker" - but we have decided
to yell FIRE!!!! instead . . . and to publish a long overdue
correction.
As in FIRE SALE. Head for the
doors of this theatre and straight to your nearest broker or
day-trading site. There is a dysfunction afoot here, a disconnect,
which only those of us who never sleep in the Silver Valley are
likely to discover. The Sleepless Fire Sale. The After-Christmas
No-Price-Too-Low Sale. Snooze and you will lose.
The Big Funds are liquidating
their precious metals assets right now in order to cover the
dividend cheques they're cutting to preserve an illusion of prosperity
for their clientele. The Fed is pumping up the U.S. Fednote to
temporarily mollify our Atlantic and Pacific allies, so for a
brief time only, you can buy real stuff a little cheaper than
you could last month, or will be able to next month, with Greenspanbacks.
You need stainless steel balls to sell on the upswing, and titanium
ones to buy on the down-trend. But now's the chance, baby.
(And if you think silver's
a risky business, take a look at what the Nasdaq's gone through
this past couple of days. Talk about your long-overdue corrections.)
We have a litter of about 30
silver kitty-cats living here in the Silver Valley. Companies
in the midst of a proved-up district of patented silver claims,
many adjacent to operating or active exploratory properties.
They are trading at one-year lows this very minute. In any given
year, most of these issues trade in multiples of two ore three,
by which we mean, their year's high is twice or thrice the price
of their year's low. Some samples, right out of the grab bag:
American Silver (ASLM), $1 now, was $2 last spring;
Chester (CHMN), was $6 a year ago, $2 right now; Independence
(ILDM) peaked about $1.60 last summer, going today for 45 cents;
Kimberly Gold (KMGM), $3 last January, 58 cents today;
Little Squaw (LITS), six bits a year ago, 38 cents now;
Mascot (MSLM), 32 cents last winter, 17 cents now; Merger
(MERG), close to $1.50 last summer, going for 67 cents today;
Metropolitan (MEMLA) hit six bits last summer, a measly
30 cents right now; Mineral Mountain (MMMM-good), a buck
last spring, 60 cents now; Shoshone Silver (SHSH), down
to 37 cents today off a 2004 high of 80 cents; Silver Buckle
(SBUM), two bits today but a buck last May; Silver Surprize
(SLSR) 50 cents not long ago, 15 cents today; lastly Vindicator
(VINS), in for 40 cents, out for 18.
Our little kitty-cat mining
companies here in the Silver Capital of the World are up for
grabs. And if history is any teacher, a gambling man conversant
in same would be putting down his bets. The pickin's don't get
any better than this.
Want to run with the big silver
dogs? How about a Hecla (HL), a Sterling (SRLM)
or a Coeur (CDE)? HL traded in a range of $4.83 to $9.31
last year, and now bids at $5.45. Coeur swung between $3.01 and
$7.69, trading this week at $3.49. SRLM, which is quietly but
aggressively tying up its land position around the Sunshine Mine
and has embarked upon extensive rehab and exploration there,
reached purtnear $14 last year; latest trades put it just below
$5. (Here's a fun one for you: Silver Standard (SSRI)
and SRLM were trading at par last summer; now the spread is 2:1.
And since we don't think SSRI is over-valued, one is forced to
the conclusion that SRLM is hugely undervalued.)
Silver stocks, especially the
little ones we like, tend to overreact to moves in the underlying
commodity. Right now they're overreacting to the likely one-
or two-month retrenchment in gold and silver prices as - like
Cub Scouts rushing to the aid of an octogenarian cripple in a
sidewalk - our trading partners are trying desperately to prop
up the dollar. (They haven't caught on to the fact that the octogenarian
in the sidewalk isn't moving because it's dead - but they will.)
Peg on a dollar or two to the
silver price and the kitty-cats and the mama-cats alike will
get very excited again, their gains far outpacing the metal itself.
And do not forget that even in the current "grim" price
climate for silver, every operating property in the Coeur d'Alene
Mining District is profitable by a couple of bucks. Forewarned
is forearmed. When the uptick comes it will come in the blink
of an eye; if you're not ready for it now you won't be ready
for it when it happens.
And, now, on to our correction:
We made two factual errors
last year, one which we've already corrected, that being the
incorrect attributing of authorship of "London Homesick
Blues" ("When you're down on your luck, and you ain't
got a buck / In London you're a goner . . .") to Jerry Jeff
Walker, when in fact the raconteur was Gary P. Nunn.
Our other error was in an October
column subsequent to our visit to China, wherein we wrote: "Unlike
the European bankers, the Chinese have never crossed us, never
tried to hurt or invade us, never endeavoured to steal from us.
The only times America crossed swords with China was at her borders,
at Korea and Viet Nam."
"Not true," we were
advised by Kurt Schultz of GoldMarketAdvisor.com. There is a
history of warfare between China and the United States in this
hemisphere. Mr. Schultz's story is too good not to pass along
verbatim:
"China did send
an armada that invaded the USA. It landed in Monterrey, California.
The effort eventually fizzled and the leaders of the invasion
disappeared into San Francisco's Chinatown, while most of the
sailors found work in the Monterrey fishing industry.
"The ships of the Armada
eventually broke up and sank in Monterrey Bay.
"The reason that the Empress
ordered the invasion is because a safe full of gold coins was
stolen from a Chinese man. The safe held the life savings
of many Chinese railroad workers; they had entrusted their "bone
money" to a fellow countryman who lost it all when he was
robbed. Not knowing what else to do, he petitioned
the Empress to help him recover the loot or to get equal value
in ransom.
"The safe was never reported
as recovered, and is legendary amongst Western treasure hunters.
If I remember it right, the safe contained about US$780,000,
mostly in US$20 gold coins."
Which just goes to prove that
hard money, silver and gold, were worth going to war for back
then. As they are now. As they will always be.
Jan 6, 2005
David Bond
email: deepee@usamedia.tv
Archives
Editor: Silver Valley
Mining Journal
David Bond covers gold
and silver mining equities for a number of national and international
publishers, including Platts Metals Week, a division of McGraw-Hill.
He lives in Wallace, Idaho, heart of the planet's richest silver
fields, the Coeur d'Alene Mining District. He is former editor
of the Wallace Miner, and holds regional and national firsts
in investigative journalism from the Atlantic City Press Club
(National Headliner) and from the Society of Professional Journalists
(SDX/SPJ) and has edited or written for newspapers on both coasts,
Canada and Alaska.
________________
321gold Inc
|
