Answer to an E mail I sent letter writer Dennis Wheeler:
<<Hi, Tom, sorry for the delay.
I'll go you one better. Here's a copy of the article for free. I think you've got a winner with this company. Just hold it and let them make the money for you.
DW
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Genco Resources
A week before I traveled to Argentina, I spent a couple of days at Genco Resources’ (GGC:TSX Venture, C$1.97; GGCRF.PK) La Guitarra silver mine about 100 miles from Mexico City. This trip also yielded very pleasant surprises.
You and I both know that Genco is producing silver and gold from the La Guitarra mine and that they are making a profit from this mining. We also know that they have done some drilling and found what they call duplicate ore bodies to the San Rafael zone. These new zones are called San Rafael II and San Rafael III. We know that they plan on increasing production as they move forward.
But what I didn’t know was that Genco has tremendous capabilities to vastly expand the size of its ore body. Genco holds a very large amount of land and there are silver showings and the workings of previous miners in many places far away from the zones that are currently being mined. In my opinion, Genco will have absolutely no trouble in continually finding ore to feed its mill for many years to come. And the possibility exists that over time, as many more of these silver-bearing areas are explored, this deposit could grow to huge proportions.
Genco’s plan is to gradually increase production and gradually increase the size of the ore body, using the profits from the mine to fund the exploration and not diluting its shareholders with further financings. That’s a pretty good plan, in my book.
Last year Genco earned $979,000 by mining and milling 140 tonnes per day and selling its silver at an average price of $7.32 and its gold for $440.00. Now get this. As of May 1, Genco has increased its mill throughput to 220 tonnes per day, an increase of 57%. If they can maintain that for a year, given that metals prices are much increased above the prices they sold for last year, I imagine that Genco could make as much as $3.5 million this year. This would be a 250% rise in earnings and that should translate into a significantly higher share price.
As for its reserves, at the end of 2002, Genco received a report from a reputable outside source saying it had inferred resources of 2.27 million tonnes grading 15.1 OPT silver and .062 OPT gold per tonne. This gave Genco about 34 million ounces of silver and 141,000 ounces of gold. The company is about to commission the calculating of an updated resource figure and I suspect it will be somewhat shocking to the market to see that Genco has a lot more silver than anyone knows about.
Friends, this is exactly what you want to see in a company that has reached the production stage. You want to see increasing production and increasing earnings. I think Genco is in a position to deliver this to you for some years to come.
Plus, as Genco increases the size of its ore body through drilling, the P/E ratio it commands from the market will increase.
Many of the highest-ranking workers at La Guitarra worked there for the previous owner, Luisman. I was happy to see that for them, this is more than a job. La Guitarra is their life. They want to know exactly what is in the ground in every nook and cranny of the mine. And they want to see the mine and the mill run at peak efficiency.
It is great to have highly motivated workers like Genco enjoys.
Genco is a silver stock that you can put away in your portfolio and just enjoy as the company and the bull market in silver make you money for years to come. I rate Genco as a buy.>>>
Dennis Wheeler of Gold Stock Report (no web site, toll-free at 800-791-3213)
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