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Silver Dollar has Silver Eq at $.08 an OunceBob Moriarty Silver Dollar Resources (SLV-V) executed a perfect Tax Loss Silly Season move in the last month. At $.80 a share in November five weeks ago, it plunged by 25% to $.60 on Friday on slack volume for the last week or so. For astute investors willing to pick up a 33% gain for two months it’s a good bet into February regardless of what the rest of the market does. The shares began trading in June of 2020 at about $.22 a share and rocketed higher with increasing silver prices to $2.29 for a 950% gain in seven months. The company may have gotten a little carried away with promotion. In the first week of January of 2021 they got slapped on the hand by the OTC Markets for price action on the OTCQB exchange. Actually the Silver Dollar story is about as simple as silver stories get. First Majestic Silver owned the La Joya Silver project in the State of Durango in Mexico. The project came with a 2013 historic resource showing 199 million ounces of silver Eq at a cutoff grade of 15 grams. I have a giant problem with the stupidity of the TSX on “Historic” resources. If someone generated a historic resource in 1980 on a project prior to 43-101, the numbers should be seriously questioned. But a resource done eight years ago with a listed Canadian company that passed muster from the TSX after 43-101 is “historic” only in name. The rocks are exactly the same today as they were in 2013 but since the property has changed hands, the TSX pretends the composition somehow has changed. That’s total bullshit. If it was a valid 43-101 in 2013 and no one has moved the rocks, it’s just as valid today. Except to the bureaucrats ever mindful of creating work for themselves at the expense of junior mining companies. The agreement between First Majestic and Silver Dollar signed in August of 2020 calls for Silver Dollar to spend $1 million in exploration over a three year period, to pay First Majestic $1.3 million over five year and to give First Majestic 19.9% of the shares in Silver Dollar to gain 80% of the project. Should Silver Dollar complete the $1 million in exploration within three years of the agreement, the last $600,000 to be paid to First Majestic would be waived. To get the remaining 20% ownership of the property it would be necessary for SLV to issue an additional 5% of issued and outstanding shares to First Majestic. The project is subject to a 2% NSR to First Majestic. So here is the story in simple terms. First Majestic didn’t have the bandwidth to exploit a major silver project in a silver mining country. They handed it over to a new junior. They get 19.9% of the company for 80% of the project and an additional 5% for the remainder. It is a big ass project well worth drilling and advancing. Insiders including First Majestic and Eric Sprott among others control about 37% of the shares. Here is where it gets really interesting. The company has a couple of highly potential gold projects in Red Lake. They will probably spin them out or do some sort of JV with others in the area. They have some value to SLV shareholders. SLV has about $9 million in cash and as of the close on Friday has a market cap of $25 million and an enterprise value of $16 million. If you divide the $16 million by 199 million ounces, you get just over $.08 an ounce for silver equivalent metals. That is not going to last long once investors come back to the market on Wednesday. All it would take for the shares to blast higher would be for a single financial writer to point out the math. The company has completed just over 1,100 meters of drilling in five holes. Assay results should be out around mid-January. Silver Dollar is an advertiser. I was too stupid to buy shares and now it is too late. Do your own due diligence. Silver Dollar Resources ### Bob Moriarty 321gold Ltd |
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