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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers
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To: James999 who wrote (7039)2/24/2006 3:17:22 AM
From: LLCF  Read Replies (1) of 78419
 
<Not too easy at all. Their cost per ounce is 3.9.>

No their cost is 3.9 + inflationary adjustment which I assume will be spelled out + 285mill upfront.

<<Silver Wheaton will pay an upfront payment of US$285 million, comprised of US$245 million in cash and a US$40 million promissory note, and US$3.90 per ounce of silver delivered under the contract (subject to an inflationary adjustment after three years).>>

Producers with those costs went out of business years ago. -ggg-

<This is a deal that SLW has done at least twice before>

Except in the past they gave away equity instead of cash:

biz.yahoo.com

AND in the past the market cap didn't do what you think it's going to do with this deal... so no doubt it won't this time either.

<It is simple and BRILLIANT.>

It may be 'brilliant', but long term contracts aren't as simple as owning a bunch of silver in the ground IMHO... if SLW's market cap increases by a billion tomorrow morning I'll declare you king and buy you a crown. If Enron owned oil and gas at the end instead of contracts, Skilling might still have his crown. :)

OTOH, SLW is turning into one big bet in increasing price of silver... so a great place to make that bet when you need it.

DAK
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