Are there any good silver stocks?

jmski52

What I mean is - are their any good silver mining companies that have good balance sheets, whose main assets are located in the Western Hemisphere, who haven't forward-sold their outputs, and where a rise in the price of silver will result in an even faster rise in the price of the stock?

Just askin'

Justacommeman

I like SLW. For a trade I like a long entry at $16.07 on a pullback or a full position buy on a break over $17.60 with volume. Preferably on a close of over $17.60

I'm for a long term hold I would start nibbling and building. JMHO...............MJ

jmski52

I'm beginning to like silver a little bit more than the others, but I can't even tell you why, because I don't know myself!

jmski52

Ah, now I see also that GDXT's 2 largest components are silver mines!!

Van Eck's Junior Gold Miner's Index Fund = GDXT

MJ, what do you think of that fund?

Justacommeman

You mean GDXJ? I've been only using it as a hedging devise against open positions. However, as a long term buy if you think gold/silver is going up, I like it a lot. Id rather own a basket of these juniors then run the risk of picking the wrong one single miner. MJ

This is from a previous post of mine.

Thursday November 19, 2009 8:54 PM

My broker was kind enough to work this spreadsheet of GDXJ's holding. MJ

Fund Holdings as of 2009/11/18
Number Holding Ticker Shares Market Value % of net assets
1 Coeur d'Alene Mines Corp. CDE US 645,007 $14,893,211.63 6.48%
2 Silver Standard Resources Inc SSRI US 583,807 $12,598,555.06 5.49%
3 Hecla Mining Co HL US 2,009,338 $12,618,642.64 5.49%
4 New Gold Inc NGD CN 2,846,642 $12,336,535.59 5.37%
5 Gammon Gold Inc GRS US 1,009,684 $10,985,361.92 4.78%
6 Alamos Gold Inc AGI CN 913,634 $10,578,828.20 4.61%
7 Silvercorp Metals Inc SVM CN 1,333,024 $9,657,934.48 4.21%
8 Semafo Inc SMF CN 2,128,535 $8,838,418.53 3.85%
9 European Goldfields Ltd EGU CN 1,077,881 $7,541,874.50 3.28%
10 Golden Star Resources Ltd GSS US 1,990,128 $7,025,151.84 3.06%
11 Northgate Minerals Corp NXG US 2,186,988 $6,910,882.08 3.01%
12 San Gold Corp SGR CN 2,107,285 $6,839,222.03 2.98%
13 Kingsgate Consolidated Ltd KCN AU 736,834 $6,661,081.03 2.90%
14 Jaguar Mining Inc JAG CN 591,654 $6,494,865.41 2.83%
15 Aurizon Mines Ltd ARZ CN 1,274,571 $6,496,954.12 2.83%
16 Andean Resources Ltd AND CN 2,600,992 $6,231,853.68 2.71%
17 Novagold Resources Inc NG US 1,110,011 $5,949,658.96 2.59%
18 Gabriel Resources Ltd GBU CN 1,670,188 $5,595,990.72 2.44%
19 Minefinders Corp MFN US 493,707 $5,490,021.84 2.39%
20 Allied Nevada Gold Corp ANV US 431,317 $5,262,067.40 2.29%
21 Cash 5,183,628 $5,183,636.21 2.26%
22 Ventana Gold Corp VEN CN 431,147 $4,975,722.82 2.17%
23 Rubicon Minerals Corp RMX CN 1,124,801 $4,831,619.42 2.10%
24 Great Basin Gold Ltd GBG CN 2,854,149 $4,577,100.34 1.99%
25 St Barbara Ltd SBM AU 13,503,466 $4,390,428.62 1.91%
26 Kirkland Lake Gold Inc KGI CN 438,457 $4,256,498.37 1.85%
27 Romarco Minerals Inc R CN 2,778,812 $4,111,453.42 1.79%
28 Avoca Resources Ltd AVO AU 2,202,485 $4,016,718.17 1.75%
29 Lake Shore Gold Corp LSG CN 1,048,444 $3,913,150.10 1.70%
30 Medusa Mining Ltd MML AU 881,164 $3,441,521.20 1.50%
31 Detour Gold Corp DGC CN 234,457 $3,276,489.58 1.43%
32 Gold Wheaton Gold Corp GLW CN 8,613,366 $2,959,919.59 1.29%
33 Dominion Mining Ltd DOM AU 626,334 $2,386,115.33 1.04%
34 Real Gold Mining Ltd 246 HK 1,445,000 $2,356,738.78 1.03%
35 Colossus Minerals Inc CSI CN 421,940 $2,203,142.23 0.96%
36 U S Gold Corp UXG US 701,277 $2,082,792.69 0.91%
37 Avocet Mining Plc AVM LN 1,106,951 $1,928,819.56 0.84%
38 Lingbao Gold Co Ltd-H 3330 HK 2,380,000 $945,642.22 0.41%

timcoin

I've owned slv. At times, it seems to have a mind of its own.

sbeverly

I wholeheartedly with SLW. Their Royalty business model is to Silver what Royal Gold is Gold.

Under the category of betting on the Jockey and not on the horse, my favorite is Silver Standard.

Quartermain is one of the best mining CEO's out there. Silver Standards results and balance sheet
are a testament to this

Fortunately and or Unfortunately if/when there is major sell off in equities in general, these
babies are thrown out with the bath water. This IMO this creates a buying opp.

If you believe (as I do) that the general equity market will melt down, I'd place an open
Stink bid at $10 for each, or either.

Both of the above are considered juniors/mid tier. Meaning that typically their price is leveraged
to the price of the metals. If Silver goes up 20 to50%, their price could go up 500 to 1000%.

disclosure: I own both

Justacommeman

jmski52

The more I think about it

If a were building a miner position I would nibble on GDX and GDXJ until I got to my desired position size on each. 50/50 would be about right. This way you have exposure to the junior and senior sector in basket form.

Buy either one on the bigger dips. Today might be a good day to buy some GDX as it's trading down 1% more then GDXJ as I type. That way you are cost averaging on the dips while building a total position. Just a thought. MJ

roadrunner

20% of GDXJ is made up of silver miners CDE, HL, SVM, and SSRI. These companies are among the biggest individual players in that GDXJ fund. I'm sure they had a good reason for leaving the royalty company SLW out of the mix. I just don't know that it is. One reason is that the Royalty companies often own contracts based on a percentage of whatever metal comes out of the mines they have deals with. They do not necessarily own the asset itself.

The one problem with miner balance sheets these days is it won't tell you if they have a massive derivative (non-recourse loan) buried in the ownership papers of the company. In the event of financial problems the owner (typically a bank) can then assume ownership of the project.

Since coming on line in November, GDXJ has outperformed GDX. And I believe the reason is two-fold: silver having a nice run and that many junior miners finally woke up. Some of those juniors have continued to rise even during gold's 6 week correction....you won't find any major gold miners who have done that though intermediate EGO did. Over time I expect GDXJ to out perform GDX. Silver plays a big role in this as well. I'd rather pick GDXJ for a base and then sprinkle in the most worthy miners who are in GDX (the more rock solid companies and the nimble mid-tiers who are doing things right). 30% of GDX is made up of the 3 biggest miners: Barrick, Newmont, Goldcorp. To me that's too top heavy considering that Barrick and Newmont have been rather sluggish for some time. And then 20% of GDXJ is made up of 4 silver miners. If one wants some silver exposure that's one way to do it. The weightings in GDXJ are a lot more even in the 2-6% range. 24 companies make up 83% of the index....14 companies make up 59% of the index (none higher than 6.7%).

roadrunner

mhammerman

USAGX is a fund put together by USAA. Kind of pricey at $36 but you can be sure there is no BS in the mix. Look it up. If any of my penny stock bets come in, I'll hit it.

jmski52

Yes, GDXJ is what I meant. Since I've been totally out of stocks for the past 1 1/2 years, this will be a tiptoe back into the water.

Isn't the main drawback of the majors the fact that they've already sold their output forward and that the price is locked? I guess that's what you mean by hedged.

It might seem that the juniors, especially if they aren't hedged would be more risky, and I'm sure that is the case if you considered each of them in isolation. Thus, my interest in a fund.

Justacommeman

<< <i>Yes, GDXJ is what I meant. Since I've been totally out of stocks for the past 1 1/2 years, this will be a tiptoe back into the water.

Isn't the main drawback of the majors the fact that they've already sold their output forward and that the price is locked? I guess that's what you mean by hedged.

It might seem that the juniors, especially if they aren't hedged would be more risky, and I'm sure that is the case if you considered each of them in isolation. Thus, my interest in a fund. >>



No, I meant I will use GDX, GDXJ ( and others - 2x inverse etf's etc ) log or short to hedge my existing futures trades or other positions (especially at support or resistance).

That's what I meant by hedging.

Sorry for the confusion. MJ

roadrunner

Most of the companies in the GDX mix have little in the way of significant hedges. Barrick supposedly closed out all/most of theirs recently if one buys what they published. But even the unhedged gold stocks can hedge their production 1-1/2 yrs out and still fall under that classification. As a rule, nearly all of the stocks in the GDX and GDXJ mix are unhedged such that you get the full leverage to an increase in the pog.

USAGX is a good overall gold & PM's fund. USAA does have diamonds and a few other quirks in there but the majority is gold. And last I looked at their top 10 holdings they seemed pretty good to me. Of all the major gold funds out there I'd probably feel safer with them based. If USAA, which services mostly present and ex-military personnel and their dependents/relations isn't playing it dead straight in this financial storm, then there is little hope for Fidelity, Vanguard, Tocqueville, Oppenheimer, Gabelli, and others who sponser gold funds. If I wanted the massive diversification and optimum safety in a gold/PM's fund, I'd pick USAA. When I first did it back in 2004 I went with Tocqueville (TGLDX) which then proceeded to lag its peers for years.

These are the top 10 holdings of USAGX (>40%). Their picks have done very well since Nov 2008 with some high flyers in there. They quadupled up from 2004-2008 and quadrupled "down" into Nov 2008. Since then they have essentialy quadrupled back to nearly even with the 2008 high. No Barrick or Newmont here though I'm not a big fan of AU which still has billion dollar hedges on the books though investor John Paulson took a big ownership stake in the firm.

ELDORADO GOLD CORP EGO 5.25 75.22
ANGLOGOLD ASHANTI LT AU 5.25 67.59
IMPERIAL CAPITAL BCR IMP 4.85 N/A
SILVER WHEATON CORP SLW 4.60 161.94
Newcrest Mining Limited N/A 4.38 N/A
Randgold Resources Limited GOLD 4.26 101.66
GOLDCORP INC GG 4.20 42.48
RBI 3.84 88.47
Royal Gold, Inc. RGLD 3.62 11.68
LGL GROUP INC. LGL

As far as good silver miner reports look at what Hecla came out with. Their production is up massively and their price per ounce way down. They are forecasting even lower costs of $2/oz and continued production increases over the next few years. Sounds like a good story. It wasn't long ago that they were hated along with Coeur D'Alene. Time heals wounds though. And both those guys have been primary targets of the big shorters in previous years of PM smackdowns.

roadrunner