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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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From: loantech	2/24/2006 12:05:32 AM
	of 78419

Old story but good: time. More recently the company has started to be more active with its other projects. Genco Resources (TSX-V: GGC) Market Cap on 5/25/05: C$19.63 MM Genco Resources is perhaps one of the least known companies on the list, yet it is probably one of the more deserving of your attention. We personally critiqued Genco for what we believe is "insufficient marketing and promotion" which stands in contrast to many of its peers. The management asserted that it has been a company policy to "under-promise and over-deliver". Still the company is taking steps to address the situation and among other things launching a new web site next month (August, 2005). So what should you know about Genco? For starters, Genco is a silver producer (with some gold credits) and is profitable at that! In the first half of 2005 the company earned about 5 cents/share net of all expenses. That is a rare feat among not only silver but even a vast number of gold companies. Yet the good news is just beginning to flow and there is a lot more coming. To date Genco has been processing some 140 tpd (tons per day) of ore and is working to increase that to 220 tpd by the end of this year, a 63% growth. It gets better: in 2006 the company expects to go through 340 tpd and thus ramp up production to 2,000,000 of silver equivalent from 460,000 ounces in 2004. In the first half of 2005 the company already produced as much silver as it did in the entire last year. The bulk of this growth is attributed to higher grades of both gold and silver at its new San Rafael vein. The management is rather optimistic about the prospects of this vein and has reasons to believe there are more parallel ore-shoots like it nearby. To confirm this prognosis Genco retained another drill rig that is already on the property and should start poking holes any day now. That is in addition to ongoing drilling at its main La Guitarra Mine. The company's plan is to maintain at least two years worth of reserves at the prevailing production rate at the time. That said, Genco's master plan is to eventually upgrade the mill to 1000 tons per day if in fact enough ore is found to support such scale of production. The beauty of it is that all this growth is being financed from operating cashflow. The company IS MAKING MONEY TODAY and putting it back in the ground to fund the expansion. Genco has about C$2 million in the bank and has no plans for additional market financing at this time. The insiders own about half of outstanding shares and there are no cheap warrants or options hanging over the stock. In fact the management is very wary of stock dilution. For instance, a number projects the company looked at for acquisitions has been turned down because they did not offer as much value as there already is in the stock and therefore would mean dilution to existing shareholders. At the present time the company is considering five more prospects.>>>>>> gold-eagle.com

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