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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (30217)	3/1/2008 1:21:11 PM
From: carranza2	Respond to of 218421

The Greens Creek silver mine acquisition is significant as it will add 8.6 million ounces of silver per annum while the by products, e.g., zinc, lead, etc., pay for the operating costs of getting the silver out. Oh, and there is the gold in those hills, too. vbg. Let's do the math: 8.6 million ounces from Greens Creek along with 5.7 million from other sources equals 14.3 million ounces whose production is mostly paid by sales of byproducts. Multiply by, say, $30 per oz. in late '08. Hmmm, in excess of $400 million in one year from silver alone, doubling its income from previous year. If it all goes nuts, as it well might, and silver gets to, dare I say it, $50 an ounce as the huge short position in it I 'discovered' gets unwound, then we are looking at very interesting returns. Looting and pillaging won't even be worthwhile terms, we'll have to come up with new, more expansive, ones. cftc.gov Hecla could pay off the debt incurred in acquiring the fifth largest silver mine in the US in one year's effort. They won't, of course, but I mention it to suggest that they have essentially bought one heck of an asset very cheaply, Buffett-style. This asset, Greens Creek, will lead to cost free silver production when the byproducts are sold. The transaaction appears so very nice for Hecla, I think perhaps Rio Tinto might want to do whatever it can to dial "1-800-GET-ME-OUT of this sucker's deal I got into." We'll see. Management is getting stock options, too, so I don't think they're interested in diluting by issuing shares or diluting too much, esp. when they can pay off debt quickly from current operations. I am licking my chops, drooling with anticipation. An opportunity fallen from the skies, all thanks to Mr. GreenSap and BurnUndKaput. From the Hecla announcement concerning Greens Creek: Baker continued, "The Greens Creek mine has continuously replaced reserves and has excellent exploration potential, not only within the current mining area, but perhaps even more importantly, has the potential for discovery within the highly-prospective 12-square-mile land position in this great mining district." Pursuant to the acquisition, Hecla will purchase all of the equity of the Rio Tinto subsidiaries that hold the 70.3% interest in the Greens Creek mine. The $750 million purchase price is comprised of $700 million in cash and $50 million in Hecla common stock. Hecla has received $400 million in committed debt financing from Scotia Capital, which together with available cash will be used to fund the acquisition. Closing is expected to occur in the second quarter and is subject to customary conditions, including expiration of the waiting period under the Hart-Scott-Rodino Act. In 2007, on a 100% basis, Greens Creek produced approximately 8.6 million ounces of silver, 68,000 ounces of gold, 63,000 tons of zinc and 21,000 tons of lead. Because the by-product metals more than pay for the silver production, the total average cash cost of silver was negative $5.27 per ounce. Even at metals prices significantly lower than they are today, Hecla estimates a 10-year average cash cost of $1.88 per ounce of silver at Greens Creek.