One of my favourite companies, Endeavour Silver, gives an update. Bradford Cooke explains how silver will keep going up. He gives more info about the newly acquired El Cubo Mine and why the stock went down because of it and expands further on the recent one day strike at the mine.
Endeavour Silver
Peter Schiff Interviews CEO Bradford Cooke (Endeavour Silver) at the Euro Pacific Global Investor Conference (31-May-2012)
Peter Schiff Interviews Brad Cooke of Endeavour Silver at the Euro Pacific Global Investor Conference:
The highlights of that interview are summarized as follows. According to Bradford Cooke, the company has been growing reserves over the years, and production has almost tripled since the economic crisis hit in 2008. In February 2009, Endeavour Silver went to the market through Euro Pacific Capital (Peter Schiff’s company), and equity dilution was less than 10%. The company has also built its employees over the years, growing from a small company to a mid tier company with 2700 employees, including contractors. Working capital is $US 175 million at this time. Last year, cash costs were $US 5/ounce.
By expanding its gold production, the company can keep bringing costs down. Their most interesting project is the recently acquired El Cubo mine in Mexico, which is the next leg upwards in this growth story. The P/E is around 10 right now ($US 20 million earnings per quarter) and Price/Cashflow is around 6, which is extremely inexpensive for a growing silver mine. At these low silver prices, they will store their bullion for sale later on, at higher prices. So they can time their selling to the conditions in the silver market. The best thing is that they store their bullion for free at their warehouses. Another positive aspect is that Endeavour silver is one of the few silver miners that possesses a whole process flow from mining to refined bullion, which is a huge advantage against other silver miners.
Ride the Silver Boom with Endeavour Silver (EXK)
Gold has been riding a phase 2 bull market since it crossed over $US 1000/ounce since 2010. But silver is still in a phase 1 bull market. Nobody is buying silver, you can’t buy silver in a bank. But the interest in silver is slowly arising and coming into a phase 2 bull market. As an anecdote I’ll tell you a short story of my silver buying experience.
Last year I went on holiday to Hong Kong and the idea to buy silver crossed my mind. So I went to Hang Seng Bank to do the same. They told me they could only buy gold for me, not silver. I was not interested in gold, because I wanted to be invested in the real 10 bagger, which is silver. I asked if they had silver stocks then? Answer, they had none. They didn’t have Silvercorp Metals on their Hong Kong stock exchange, which is the best silver producer in China. I was completely flabbergasted. Then next on, I told the clerk to give me gold. Her advice was: “Why buy gold? it is already so high”. After hearing this, I immediately knew that the bull market in precious metals hadn’t even begun… But let’s get back to the silver story.
Historically, Mexico has been the world’s largest silver producing country in the world with an annual production of 100 million ounces per annum. So all the silver is in Mexico, if silver goes up in price, Mexico will benefit the most from that. So you got to invest in a company that has its operations primarily in Mexico. Endeavour Silver (EXK) is such a company and is recommended by Peter Schiff (as he disclosed last year that he was (and still is) invested in this stock). To know more about Endeavour Silver please visit the link here.
Correlation Economics (Backup) 