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We have profiled two new companies so far in 2007 that we felt represented exceptional value and were set to post impressive gains. Despite the failure of gold to break resistance at $700, we wanted to take a minute to review the performance of our stock picks. Continue reading Our 2007 Stock Picks: 143% is the Magic Number If you are invested in gold, silver and the companies that mine these metals, you might be a bit disappointed by the relative lack of action over the past year. Indeed, if you would have bought the HUI exactly one year ago, you would up a whopping 4% as of the publishing date of this article (April 5, 2007). And if you would have bought 11 months ago (in May), you would actually be down 11%. The HUI has been trading up and down, but has been confined to an ever tightening range. Take heart, as this extended bout of sideways trading must be looked at with some perspective. Continue reading Gold Stocks On the Verge of a Breakout
Continue reading Silver Wheaton – The Best Silver Play in Town |
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All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise. The information on this site has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. Accordingly, investors should not act on any information on this site without obtaining specific advice from their financial advisor. Past performance is no guarantee of future results. View full terms and conditions. |
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Silver Wheaton is the only mining company with 100% of its revenue from the sale of silver. Let’s use the term “mining company” lightly. Silver Wheaton does not actually own or operate any mines. Instead, they sign deals with established mining companies where silver is produced as a by-product (of base metal or gold mining) and is not properly valued by the market. Where silver is not the core product of a miner, it is often valued at far less than it is worth. Silver Wheaton pays a lump sum for future production plus an on-going fixed amount per ounce and assumes none of the political or production risk. The supplying mine likes this arrangement because it provides up-front cash to be used for expanding production of its core metal. This business model creates strong upside potential with limited downside risk for Silver Wheaton shareholders. With only 5 employees, they are more aptly described as a royalty company than a mining company.
Silver Wheaton was the brainchild of Ian Telfer, who hurriedly spun the company off from Wheaton River Minerals when Coeur D’Alene Mines made a hostile bid. About 62% of the company’s outstanding shares are now owned by Goldcorp. Mr. Ian Telfer, President and Chief Executive Officer of Goldcorp, stepped down in his role as a director of Silver Wheaton in April and appointed long-time associate, Peter Barnes. Mr. Barnes brings more than 20 years of senior management experience to the role and, in his previous mandate as Executive Vice President and Chief Financial Officer of Goldcorp Inc. (and, formerly, Wheaton River Minerals Ltd.), helped build one of the best performing precious metal mining companies in the world. The relationship between Silver Wheaton and Goldcorp seems to benefit both companies, but I think Silver Wheaton will reap the greatest rewards. Jim Damberger labeled Silver Wheaton as Goldcorp’s in-house bank and goes into detail about how this arrangement benefits SLW in a 