Mines Management

(Ticker: MGN)

Silver Stock Report

by Jason Hommel, January 30, 2014

Mines Management. I own shares. The company has not paid me to write this article.


Market Cap: $20 million at $.70/share

Primary Asset: Montanore Project. Net Present Value about $700 million. Source: page 10 of the recent company presentation. Company Presentation.pdf Let the PDF load for a bit, be patient.

If the stock price goes up to match the net present value of the project, this means that the stock price could go up to a share price in excess of $20/share. (The math: $700M/$20M x .70/share = $20/share!)

From montanore-overview

"Mines Management's wholly owned Montanore Project hosts one of the world's largest Silver-Copper deposits containing in-situ mineralization estimated at more than 230 million ounces of silver and nearly 2 billion pounds of copper, not considering dilution or sub-economic mineralized zones."

Me again: $230 million oz. of silver, x $20/oz. = a value of $4.6 billion worth of silver. And 2 billion pounds of copper x $3.20/lb. = $6 billion worth of copper. This project has $10 billion worth of metals in the ground!

Again, from montanore-overview

"The project has already undergone extensive engineering, and is designed with an initial production capacity of approximately 12,500 tons per day estimated to yield 8 million ounces of silver and 60 million pounds of copper, with the added potential to increase production."

Me again. 8 million oz. of silver, x $20/oz. = $160 million per year. 60 million pounds of copper x $3.20/lb. = $192 million. Adding them together is $352 million per year.

Again, this company has a $20 million market cap!!

Yes, but is it economic? Very. The company estimates an operating cash cost of $22.51/tonne. (page 10) of the Company Presentation.pdf But the ore contains $90/tonne worth of silver and copper. (page 9) of the Company Presentation.pdf

This means that this project can make billions and billions of dollars for shareholders, EVEN IF THE SILVER PRICE STAYS THE SAME AND DOES NOT GO UP!

Again. I own shares. Mines Management has not paid me to write about the company.