& Lead break out to new Highs.
(Klondike & Silver remain cheap)
Silver Stock Report
by Jason Hommel, October 11, 2006
Zinc and Lead prices are breaking out and making new highs, and I did
not read one single news story on this event today from any
source. Shocking. Seems everyone is alseep, thinking we are
still in a "correction" for commodities because oil and gold, the
heavily manipulated commodities, are still down. Also,
nickel, molybdenum, and uranium are headed upwards at full steam.
Zinc broke out and hit $1.73/lb., and lead broke out and hit
Take a look at the kitcometals charts for zinc, and look at the stocks
of the metal in decline:
It's almost the same story for lead.
Prices are up, as inventories are in decline. It's doesn't get
much more clear than that. Commodities dead? No way.
We have a 2 year structural problem in zinc, where no new major
projects will come on line in that time frame, and we have zinc
inventories at the LME getting cut in half in the last 6 months from
about 230,000 tonnes to 130,000 tonnes with no major price
change. Clearly, zinc prices are not high enough.
Furthermore, China is slated to boom for the next 15-20 years.
I twice predicted that zinc would lead the pack (just echoing other
news sources, and looking at the obvious).
I said on June 2:
"And when zinc begins to shortly hit new highs again,
above $1.75/lb., I suspect that this "dip" in the metals will be over."
(Read that article for more details on why!)
I said on September 2:
continue to decline, while zinc prices look ready to break
out again above $1.60/lb."
My overall portfolio remains down about 40% from the highs of May 11,
2006. I've "lost" millions of dollars on paper from those highs,
(but I'm still up about 40% for the year!). I'm not
worried. I can see that zinc inventories are down.
And I know that commodities booms last about 15-20 years, and this one
may well last much longer with China booming--since China has over 4
times as high as the population in the U.S.!
Looks like zinc will lead the pack out of this correction in
commodities, and the zinc stocks should start booming, too.
Besides the usual zinc/silver stocks you all should already know about
that are all on dips (and so it's time to buy), I'd like to bring to
your attention a new company that came out this spring. (It's
also on a nice price dip.).
Klondike Silver. (KS.V - TSX) It has silver, lead and zinc.
The share structure seems difficult to access, in part because the
website info is dated Jan. 2006, and in the finance reports, many
shares may need to be issued for all the properties, so management has
to keep track of a lot. (It kind of seems like many companies
turn this into a sort of puzzle game on purpose, so that investors who
work to find the information feel as if they are doing "real
work". And that bothers me. They should keep it simple, and
up to date, and have more respect for their investors than this.
I work hard to "keep it simple", and so does kitco and yahoo. The
companies should put this info on the front page of their web site, and
it should be updated daily, if necessary!)
The finance statement at Sedar filed on Sep 28 2006, for May, 2006,
32 million shares outstanding and
14 million warrants and
3 million options.
On July 31, there was a placement for 7.7 million units of shares and a
warrant, for another 15.5 million shares.
Total: 64.5 million shares fully diluted.
@ $.38/share x .88 Cdn/U.S.D. = $.3344
$21.5 million Market Cap, fully diluted.
Take a look at the smartstox interview here:
Richard Hughes is famous for his track record of success, and is very
highly regarded in the industry by the people I talk to.
Or, read the smartstox report:
See the list of 19 properties klondike has here:
The basic story is similar to many, such as Clifton, Cabo, O.T. Mining,
& Sterling Mining. Klondike quietly acquired many properties
at the bottom of the market to acquire a virtual monopoly in a highly
prospective historic silver mining camp (The Slocan camp) of historic
high grade producing mines that were never explored with modern
methods. Klondike also has a 100 tonne per day mill, and could
start mining quickly, cheaply, soon. (Soon was the story 2 years
Klondike has acquired so many properties this year, I've not even had
time to keep up with it. I'm just glad I own some stock, and that
the company is doing the right things in this bull market:
Acquiring properties (and not so quick to produce). And we ought
to be buying stocks.
Timing for this stock: Don't drive this stock too high tomorrow
at the open. Be patient. The "correction" may be ending,
and now may be the time to buy aggressively, but there are many
warrants at $.20, and that will keep downward pressure on the share
price, and will help the company bring in more cash to develop
properties. Also, there are many other good companies to consider.
Disclaimer: I own over 1/2 million shares of Klondike, and as
Make money -----> silverstockreport.com
Get healthy ----> jasonhommel.com/rev22
Build your faith ---> bibleprophesy.org
& help others do the same!
P.S. Here's a 500 word article on silver I wrote recently for someone
who has connections to place this editorial in circulation in a large
national magazine. You will notice that much of the copy is taken
from my introduction page at silverstockreport.com.
This is a good, quick, hard hitting message to print out and share with
your family and friends who may be reluctant to invest in 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
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
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
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
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
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
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.