Silver Wheaton gets new competition and changes website.
In 2005, Silver Wheaton had at their website:
"Silver Wheaton is the only mining company with 100% of its revenue from silver production..."
Recently, Silver Wheaton quietly changed their website:
"SILVER WHEATON is the largest mining company with 100% of its revenue from the sale of silver."
Why was the word "only" changed to "largest"? The answer is Silverstone Resources (SST on the Toronto Venture Exchange. SVRCF is the dummy symbol for the stock when purchased through a US Dollar account in the USA.) The most unique, high-potential characteristic of Silverstone is that it is the only junior mining company in the world following the metal production stream business model pioneered by Silver Wheaton (SLW - NYSE).
Just as Pepsi became a tough competitor to Coca Cola, Silverstone is a one year old company and a new competitor to Silver Wheaton, following the exact same business model. In the last six months, Silverstone has announced the purchase of two new silver streams totalling almost 3 million ounces of silver per year. They announced their goal of buying a new silver stream at the rate of about one every quarter. They are working now on purchasing their third silver stream that will likely increase their signed-up silver "production" to between 4.5M and 6M ounces a year. They could be at as much as 8M ounces by the end of the year, or about half of the rate of Silver Wheaton which is at 15M ounces a year. So, in their first full year of operation they are well on their way to reaching the 50% level of their "competitor" Silver Wheaton by year end. At 50% of the market cap of Silver Wheaton, that would put Silverstone at USD $1.2 billion or $1.3 billion Canadian. Presently Silverstone has a market cap of about Cdn. $130 million. They will have to issue shares to consummate two more deals this year, and that will put it at perhaps 105 million shares outstanding by year end, but that would justify a stock price of $12 a share Cdn. I am not saying I think the stock price (presently $1.50 Cdn.) will get to $12 by year end, but it gives you an idea of its upside potential. If it accomplishes half that in double the time it would still be a fantastic performance. The stock was at $2.75 before dropping in half due to hedge fund stock-liquidation and panic selling in the resource stock sector due to the subprime mess, so now the stock is suddenly at insane, firesale prices. Silver Wheaton investors who are sold on the Silver Wheaton business model but want the higher upside potential which was witnessed earlier in the company's history will want to buy some Silverstone also.
www.silverstonecorp.com symbol: SST-Toronto Venture Exchange
Disclosure: I own both stocks. |
