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Gold/Mining/Energy : Pacific Rim Mining V.PFG -- Ignore unavailable to you. Want to Upgrade?

To: Quickdraw who wrote (8109)	12/11/1997 10:24:00 AM
From: J. Kerr	Read Replies (2) \| Respond to of 14627

Rick, for those who don't have access to the Globe & Mail, I have typed out the article from this morning's edition which talks about silver and mentions PFG. ---------------------------------------------------------------------- Silver soars as stockpiles dwindle Metal has risen 20% since October as gold has been hitting 18 year lows Prices for silver, the Cinderella of the precious metals family, have soared 20 per cent since October, even as big sister gold slides to 18 year lows. "The silver stockpile has shrunk enormously, and it may be that the market has been cornered," Ian Henderson, who manages the $250 million (U.S.) of resource funds for Fleming Investment Management in London, told Bloomberg News. But it's tricky to find stocks that offer a direct play on the metal, which is usually produced as a byproduct to other metals. Many silver shares are either speculative or already highly priced. "The equities that are exposed to silver tend to be quite pricy because of their scarcity value," said Margot Naudie, manager of Bank of Montreal's $23 million (Canadian) First Canadian Precious Metals Fund. She has put about 9 per cent of her fund directly in silver bullion. "The fundamentals are far superior to gold." Silver prices have been climbing around the world in recent weeks on rumours that a group of speculators is trying to corner supplies. Meanwhile, demand from industrial consumers and jewelry makers is buoyant. In London yesterday, silver for immediate delivery rose 31 cents (U.S.) to $5.78 after hitting $5.88, the highest price since February, 1996. On the Toronto Stock Exchange, shares in Pan American Silver Corp. climbed $1.85 (Canadian) to close at $15, up from $9 in August. The Vancouver-based silver miner said last month that a 70-per-cent owned Russian unit plans to revive the big Dukat silver mine, which it said has reserves of 477 million ounces. Pan American explores for silver in other countries and mines silver in Peru but production is still tiny, at 2.1 million ounces in the first nine months of the year. Shares in Pacific Rim Mining Corp. of Vancouver jumped 35 cents to close at $1.45 yesterday on the Vancouver Stock Exchange. Like other junior exploration plays, the company's shares have slumped this year, dropping from more than $7 in February. Pacific Rim, which plans to list on the TSE today under the symbol PFG, is working on a property in northwestern Argentina and another in Guerrero, Mexico. Those looking for a straighforward investment in silver without the risks of production can buy Central Fund of Canada Ltd., a closed-end gold and silver fund that trades on the TSE and the American Stock Exchange like a stock. The fund's units rose 10 cents to close at $5.10 in Toronto trading yesterday, up from $4.85 in July but down from $6.35 in March. As of yesterday, the fund had assets of $108.1 million. Half of that money was represented by 6.6 million ounces of silver while 131,300 ounces of gold accounted for the rest. As with other closed-end funds, there's no guarantee that Central Fund's market price will reflect the actual value of its underlying assets (that asset value appears in Saturday's Report on Business). The fund's units drop in price when investors are cool on precious metals, and it traded yesterday at a discount of about 15 per cent from its asset value. Yesterday's strength in silver also lifted gold prices, which have been hurt this year by heavy selling of government reserves, analysts said. Bullion was also boosted by figures out of South Africa and Australia that showed a decrease in gold mining output. Shares in Barrick Gold Corp. rose $1.20 to close at $22.90 on the TSE and Placer Dome Inc. gained 90 cents to end at $15.90 as gold for February delivery rose $3.70 (U.S.) to $288.60 on the New York Mercantile Exchange's Comex division. But investors are hoping for hotter action in the silver market. In mid-October, Merrill Lynch & Co. Inc. said a cabal of investors and traders controlled huge stocks of silver in New York and London in a bid to create a shortage. Meanwhile, stockpiles of silver warehouses monitored by Comex are at their lowest level since the mid-1980s. Back in 1980, Texas billionaire Nelson Bunker Hunt lost hundreds of millions of dollars in a failed bid to corner the silver market. Prices soared as high as $50. Demand for silver in jewelry, silverware, photographic films and paper and for use in conductors and solder in the electronics industry has been outstripping supply form mine production and scrap recycling. "And the nice thing about it is there's no central bank selling," said Paul Wong, manager of the $39 million CIBC Precious Metals Fund, which has about 8 per cent of its assets in silver bullion. ---------------------------------------------------------------------- Regards. J. Kerr