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Gold/Mining/Energy : Silver Bull Resources, Inc. -- Ignore unavailable to you. Want to Upgrade?

To: jrhana who wrote (2202)	10/9/2008 10:09:49 AM
From: shelby3	Respond to of 5637

MMG is married to high capex open-pit. "Most of your post has really nothing specific to do with MMG" So it is specific to MMG, not to smaller companies which are already producing and completed their capex and are still small mcaps with high leverage to the silver price (e.g. SEG.TO). Hey but MMG is definitely outperforming SRZ.TO (3 cents from $5) and SWN.V (5 cents), but being best at high capex zinc projects, doesn't mean much in my opinion, unless the world somehow no longer has this monetary crisis. In my opinion, the monetary crisis is permanent until the dollar dies and we get a new international currency basket with gold backing. And that will bring all kinds of financial dislocation. No doubt the SuperCycle will continue, but you didn't see base metal miners making fortunes in stagflation in late 70s. Globalization is really a monetary crisis. We wouldn't have had poverty in 4/5ths of the world without the strong dollar charade.

To: jrhana who wrote (2202)	10/9/2008 1:30:23 PM
From: Mr. Aloha	6 Recommendations Read Replies (1) \| Respond to of 5637

Unlike other miners, because of their excellent infrastructure, low-cost oxide zinc processing, and lower costs in Mexico, MMG's capex requirement will actually be very low relative to their future profits. On an absolute basis, it will be higher than for tiny self-funding juniors, but their future profits will be orders of magnitude higher. That might be a problem in a prolonged global monetary crisis if the only option were to go to production on their own by getting debt financing from banks, but that's not a very likely scenario. Even back in 1999, when majors had far less cash and metal prices were a lot lower, Skorpion's oxide zinc project, with its "high capex" project in the middle of nowhere that had no silver, got bought out by a major for many times MMG's current market cap. It didn't matter that, with metals in a prolonged bear market, banks were very tight with their money toward base metal projects and the junior that owned it couldn't finance it on their own. With many of the majors' huge zinc mines running out of zinc ore in the next few years, there will be a huge zinc supply deficit regardless of the global slowdown, especially with all the high-cost mines/projects also shutting down. As that zinc supply deficit results in zinc shortages, the majors will be looking for quality world-class projects to fill the gap. None of the projects anywhere near that size are of the self-funding variety. MMG has the best in the world, with likely the best combination of relatively low capex for the resource size and extremely low production costs, all in a safe jurisdiction. When you add in all the silver they have and will be adding to significantly in coming months with their aggressive drilling, IMO MMG will be the premier buyout target for majors in coming years. In addition to one of the biggest and lowest-cost zinc mines in the world, they could also have one of the biggest and lowest-cost silver projects in the world. Majors looking for huge silver production will be bidding against those looking to fill the zinc supply gap. As for leverage to the silver price, with many more ounces per market cap, regardless of capex requirements, MMG will have far more leverage than tiny producers. If the price of silver doubles, it's the company with more ounces per market cap that benefits more. Higher silver prices not only would increase the future profits, but they also would increase the takeover demand for MMG's project. That double-sided leverage to the price of silver combined with the huge increase in silver resource they'll get from their drilling in coming months could make MMG the most-leveraged-to-silver company around. All along, I've said that MMG is a long-term investment that should pay off big when they likely get bought out after they complete the feasibility study. This sector collapse in stock prices doesn't change that. The financial crisis combined with the more than doubling of the resource make it more likely than ever that MMG will get bought out rather than go it alone. Unlike banks, the majors are still raking in the cash, and will more so amidst "massive inflation." Whereas banks lack capital, majors are constantly turning their in-the-ground hard assets into cash. Add in the Chinese, Koreans, and Japanese all looking to secure resources, and there's a huge amount of capital looking for world-class projects. The Chinese may want to buy out MMG cheap when they prove feasibility, but they'll need to outbid the majors looking to fill the zinc supply gap and those looking for huge, low-cost silver production.