 Head for the bunkers
Bob Moriarty
Archives
July 16, 2008
Well, the US government in
its infinite wisdom has put the fate of Freddie Mac and Fannie
Mae in the hands of Congress. So 435 brave souls headed for a
hotly-contested election this fall get to vote on the right "price"
for Freddie and Fannie's shares. Why am I not reassured?
It didn't take one day for
the pundits to respond, saying inflation
is no longer an issue. Or at least THE issue. "We need
to save these companies even if we destroy the economy."
And we will. Destroy the economy. When no one is allowed to fail,
failure becomes the standard.
For some reason silver companies
have been trashed over the past year. Since last year most silver
companies have been cut in half, or worse. I visited two wonderful
silver companies a little while back. I've been gone and too
busy to write about them but now is a good time, both are cheap.
About 7 weeks back, I visited
Mexico and got to see two great mining companies. I have written
about them before. This was my
third visit to Endeavour Silver. (EDR:TSX) It was
my
second visit to Great Panther Resources. (GPR:TSX).
Great Panther just announced
quarterly production of 436,000 ounces of silver equivalent
ounces. Based on today's price of $1.14, they have a market cap
of about $92.5 million. Call their yearly production 1.75 million
ounces of silver equivalent. That makes them worth about $52.85
per production ounce.
Endeavour Silver announced
their quarterly production of 515,634 silver ounces about
a week ago. They are a pure silver producer. Based on today's
price of $3.32 per share, they have a market cap of just about
$162 million. I'll call their yearly production 2.06 million
ounces of silver. That makes them worth about $78.65 per production
ounce.
I want the reader to understand
I don't want to make any comparison between the companies because
there are other vital factors in determining market cap. Both
companies are very well cashed up. Great Panther has about $4.5
million in cash, Endeavour Silver has about $14 million. That's
very important today; hundreds of small juniors are on the ropes
because they were counting on financing that suddenly dried up.
Both companies are far more
developed than a year ago but the share prices have been hammered.
It's crazy because both have accomplished everything they said
they would. Both have increased 43-101 resources to the point
it's obvious they have plans to increase capacity and both are
producing silver at a profit.
I encourage readers to go to
their websites and do your own due diligence. I want to point
the companies out because they are so cheap relative to the market.
Silver is going a lot higher and both companies intend to be
mid-tier producers. I love the management of both companies.
When the crash hits, and it's
coming between now and October, production stories will be the
only game in town. I love these companies and I'm proud that
we have been associated with them as long as we have.
Great Panther and Endeavour
Silver are advertisers. We are biased.
 Great Panther Resources
GPR:TSX $1.14 (July
15)
GPRLF-OTCBB
81.1 million shares
Great Panther website
 Endeavour Silver
EDR:TSX $3.32 (July
15)
EDWGF-OTCBB
48.9 million shares
Endeavour Silver website
Jul 16, 2008
Bob Moriarty
President: 321gold
Archives
321gold Ltd
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