The use of the SA miners for exposure to Au and for income while you wait is old school thinking, just the stuff that works in a nasty bear. I'd keep an eye on HM cash costs for the next 2 q's. HM Western US mines (and NEM's as well) will be affected by the rising cost of mining in the US West, we just don't know how much, we only know the problems aren't going away soon. T.FN recently exited its only non-royalty property - Ken Snyder, in NV, and I don't think it was because cash costs were going down (the official word was problems with the contractor, but how it would go over with normandy if they had made specific reference to mine costs - just rank speculation about this). But electricity and fuel costs are going up in Nevada, and will continue to rise this summer. A nevada utility just suspended its dividend, and Nevada pulls its refined products from Cali, which will see some problems this summer given recent refinery fire and already depleted stocks.
On the silver side, the only critique is that you're heavily exposed to exploration success in SSRI. It needs much, much higher Ag prices to secure financing for even its most advanced (Bowdens) project, to say nothing about profitability. If silver prices stay where they are SSRI can't appreciate unless they have exploration success - which they've had some of. This is in contrast with T.BAY and SIL, which will be good mines at current Ag prices. Of course, with both of these you get exploration sizzle as well.
Other than that, you'll just need to hold some patience, hopefully not more than 1-2 years. |
