Silver Stock Report
by Jason Hommel, November 17, 2006
Early Stage Silver Opportunity - Arian Silver (TSXV-AGQ) (symbols at Yahoo! finance: AGQ.V, ASLRF.PK)
95.9 million shares fully diluted
(Company issued 59 million shares, and warrants, in 2006, up from 37 million shares in Dec. 31, 2005.)
@ $.28 Cdn x .87 Cdn/US = $.24 US/share
Market Cap: $23 million, U.S.
The management team at Arian Silver Corporation and I have something in common – we were both some of the early big believers in silver in our respective markets. Arian is the first silver company to trade on AIM of the London Stock Exchange (ticker symbol "AGQ") and is dual listed on the TSX Venture Exchange, symbol AGQ.
Arian Silver is backed by Endeavour Financial, who helped create Wheaton River and Silver Wheaton. This is an early stage opportunity – the company has only been listed for a few months. And the share price – 28 cents Canadian – has a long way to go to catch up to some of their other deals.
We hear the company has dealt with their financing needs, which always takes pressure off a stock (and the shares issued before June 30th, 2006 should be free trading by now).
Arian is focusing its exploration and development efforts in one of the richest known silver-bearing districts in the world - the Zacatecas State of Mexico. With strong financial backing and a well connected operations group, Arian Silver offers early stage entry to investors seeking strong leverage to silver prices.
Arian CEO Jim Williams has a very specific business model that makes a lot of sense to me. He is after properties that have silver veins wide enough to drive a truck through – use mechanized mining. This is different than many Mexican silver plays, which use shafts. Mechanized mining greatly reduces costs. And the company has had good success to date in its early exploration work in finding properties like this. Arian’s play at San Celso, in the Zacatecas area, returned over 1000g/t over more than four metres, or 17 feet. That’s the kind of grade that can produce a lot of silver.
Jim is also thinking outside the box on another property. They optioned 100% of the Tepal polymetallic play in Mexico. This is not a primary silver asset, so many silver companies would not think of buying it. But if Jim can determine there is a large quantity of silver at Tepal, and get paid to find it by mining the other metals, that makes huge sense. If Tepal ends up being economic, their silver cost could be zero or less with the by product credits. Wheaton River Minerals was able to say their gold production costs were very very low – after byproduct credits, (usually copper or silver) - at their mines. And the stock market rewarded Wheaton River Minerals very handsomely!
Arian is actively seeking producing silver mines or near production. The team they have in-country can clearly access some good properties, so I think it is only a matter of time before either the true potential of one of their current properties or a big new asset comes in to make shareholders happy.
Update: Nov. 15th: Arian Silver announced a non-brokered, fully subscribed, private placement to raise $3.5 million Cdn at $.25 Cdn/share. The warrants have a strike price of $.42.
Disclaimer: The information contained herein is accurate to the best of my knowledge. As with any investment, exercise extreme caution and do your own additional research. By purchasing a look at my portfolio, you understand that I am not giving investment advice. (I do not own stock in Arian Silver, and nobody has paid me to send out this email. I don't intent to take part in the private placement, but I felt this was a stock I should simply bring to your attention.)
A 500 word review on silver:
Silver Prices must go up, and you can make a fortune in silver.
Paper money is now a total fraud, and has no gold backing, none whatsoever. The U.S. gold has not been audited since the 1960's, and may no longer even exist. If it does, the "official" U.S. gold hoard of 261 million ounces can back up the currency with one ounce of gold for every $40,000 dollars in the U.S. domestic banking system.
There has been less than 5 billion ounces of gold mined in all of human history, worth about $3 trillion dollars. But there is about $50 trillion of paper money in the world, and about $50 trillion of debt. So, gold should go up in value at least 10-15 times, or more.
Gold is money, because of its fundamental nature; it is a great store of value; it's liquid, portable, rare, a luxury item, lasting, durable, divisible, recognizable, verifiable, and can't be counterfeited.
Silver is like gold, but better, because silver is being used up by industry. More silver is used up by industry, jewelry and photography than is mined every year.
Silver demand may not decrease with higher prices, because silver jewelry can become more fashionable as prices rise. And in most industrial applications, silver is a tiny percentage cost of the overall product.
Further, as silver prices rise, investment demand will increase, as it's hard to beat 30% gains every year, as silver has been doing since 2003.
Silver can protect you from rises in gas prices! Oil is now about $60/barrel, but silver is only about $11/oz. In 1980, oil peaked at $43/barrel, and silver peaked at $50/oz.! And in 2000, oil bottomed at $10 barrel, and silver bottomed at $5/oz.
Peak oil experts say that there is only about a 40-year supply of oil left in the ground, but there is only about 14 years supply of silver reserves in the ground! Silver’s the better investment.
As silver and oil prices return to historic ratios, silver prices will rise to about $30-$70/oz, up from $11/oz. today, and if oil moves even higher, silver will move higher with it!
If silver could be counterfeited, our copper clad coins would look a lot more like silver than they do. Silver coins are easily recognized by anyone who has ever held one, and felt the difference in weight.
Silver is so rare today that many of the best experts say that there is barely 300 million ounces of silver in refined, deliverable form. With 300 million people in the U.S., then if you have even one single ounce of silver, then you may have “more than your fair share”, and are either an evil, greedy, capitalist pig, or a wise steward of your own wealth.
A day’s wage over 100 years ago used to be up to a silver dollar, or as little as a silver dime. You can buy those same silver dollars today for much less. Get some.
To learn about the different kinds of silver available, and where to buy it, see here:
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