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Gold/Mining/Energy : Silver prices -- Ignore unavailable to you. Want to Upgrade?

To: Archie Meeties who wrote (2336)	11/20/1999 7:54:00 PM
From: Claude Cormier	Read Replies (1) \| Respond to of 8010

-A- If silver prices would move to double digits on short notice (that is what would happen if someone try to Corner the Ag market, the high costs silver producers would likely be the best performers. Coeur D'alene with an average cost of $3.75 or so would benefit a lot, even if it produces a lot oif gold as well. FSR with a cost near $3 would also move big time. But I guess that, just because the group is very small, all the silver stocks would go through the roof. Keep in mind that you can count the valid silver plays on your both hands. If the big money comes, in the most popular will move higher and faster... those are SIL and PAAS. As for BAY, well this one is becoming much bigger, WIth the numbers announced this week, I calculate a NAV of C$7+. And there is still potential to double the reserves from here. IMO, those would refuse to take the extra step to really understand this play are missing a great opportunity. Enjoy the game.

To: Archie Meeties who wrote (2336)	11/22/1999 3:39:00 AM
From: Jaakko	Read Replies (1) \| Respond to of 8010

<<Producers are the only ones who would receive cash flow from a transient spike>> To receive substantial cash flow from a transient spike, an unhedged producer should try to hedge couple of years' production at the peak price of the spike... the trick is to find the peak price and to determine the quantities to be hedged (depends on your future POS assumptions).... An exploration company is hard pressed to sell forward future production it may never have (substantial risk if no ore found or mine production is delayed beyond contractual delivery dates of the Forward contract)... however, an exploration company could buy put options at or close to the transient peak and limit its risk to the price of the options... When POS has come down the put options can be sold at a profit giving some cash flow to the exploration company.... On the other hand if the assumed transient peak never materializes and POS continues to the stratosphere the options expire worthless... (Note: no obligation to deliver silver exists when buying a put option)... Also, a former producer that has shut-down production due to low POS, and is unhedged, stands in an excellent position to take advantage of a transient peak by locking in POS at or close to the transient peak by either selling forward or buying put options... I think this last category of mines should have the greatest leverage to POS should someone try to corner the silver market... but then again markets aren't efficient and the knowledge of potential and actual hedging strategies of mining companies among the investing public and even institutional investors is poor...