Apex Silver (SIL), San Cristobal, Bolivia -
is currently in the last phase of pre-production
at their mammoth silver project at
San Cristobal, Bolivia.
It is 65% owned by SIL and 35% by Sumitomo of Japan
and production is due to start in September 2007.
The reserve is calculated to hold -
467m oz silver at 63g/t -
as well as 8 billion lb zinc -
and 3 billion lb lead.
Once full rhythm is reached, San Cristobal will be one of
the world's biggest silver miners projected to -
process 40,000T ore per day and produce -
a touch under 17m oz silver per annum at -
under U$2/oz cash cost.
Although the project lies in Bolivia of Evo Morales,
there is much to like about the macro situation
as regards SIL.
Firstly, it is situated in the politically calm region
of South Western Bolivia, well away from
the Santa Cruz hotspot.
Secondly, it has the active support of a government
that still wants to attract foreign investment.
Thirdly, and our view most importantly, the minority
shareholder is Sumitomo.
The Japanese conglomerate has the finest of reputations
in Bolivia.
Respected by all sides of the political and economic
spectrum, Sumitomo has a long history of social and
community works and honorable conduct in Bolivia.
With Sumitomo as the sleeping partner, the future stability
of San Cristobal is virtually guaranteed.
SIL could not have made a finer choice of partner.
I like SIL at its current price of $15 and see upside to
the $25 range by the start of production.
The current market cap of around U$900m is also the kind -
of size that will catch the eye of fund managers as it -
steams past the $1Bn barrier in the near future....
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