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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (30172)	3/1/2008 3:56:42 PM
From: Spekulatius	Respond to of 78750

SIL, since they appear to have a large derivative position in Silver and Zink, a short position in those metals to presumably offset pricing risk for the mining assets we can only assume that they will show a gigantic loss for the next quarter (silver has almost doubled during the last 2 month). Their mine is not producing much due the water problem (if i remember correctly) that sounds like it will take another 6 month to solve. I wonder if they are still liquid by the time the mine starts. Shareholder equity is already negative and the huge short position at some point will cause margin cause, IMO. And we do not even know if those derivative losses are tax deductable in Bolivia. SIL will have to raise capital (which is very difficult right now) or sell some ownership in their mine (to Sumitomo, i presume) to stay afloat.