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

To: Mark Bartlett who wrote (1004)	4/6/1998 12:18:00 AM
From: Postman	Read Replies (2) \| Respond to of 8010

GSA/VSE is hanging in the .68-.70 cent range. They have a high grade silver property in Utah. They have $1.3 million in the bank and are looking for another property. I think it is a good junior, the float seems very tight and they have lots of cash.

To: Mark Bartlett who wrote (1004)	4/6/1998 1:33:00 PM
From: Ray Hughes	Read Replies (2) \| Respond to of 8010

<<Too much, enough or too little>> Re: silver spilling over into the hallway. MV hit upon one of the keys - refinery capacity - in short-term analysis of supply/demand for any metal. Silver refiners have been running at about full capacity. Remember that the vast majority of silver is a by-product of mining/refining other metals, a copper producer, for example, will not crank up copper production in a big way (copper being in a bit of over-supply) to earn a little more on added silver output, while losing big time by producing too much copper. Hence, in the short run we must look to the scrap refiners (Handy & Harmon, Englehard, etc.) for the increase in silver supply. Their capacity is limited so, in the short run, there will be a lag in raising production. Therefore,because they can't handle all the available scrap, it spills into the hallways. Some observers believe that because there is a vast, unreported inventory of silver (old coin, antique tableware, etc.) there will not be a silver shortage. This misses the point - refinery capacity won't be increased to refine this metal until silver price rises high enough and stays up long enough to assure the owner that the price rise is not temporary. Only then will the refinery owner increase capacity. The full analysis must be conducted to arrive at the correct interpretation. Because scrap silver inventory can't be refined fast enough to make up for the rising supply shortfall there will be a major blow-off as the short side gets squeezed. Hedge fund operators can, in a short period of time, buy enough silver to absorb all the available excess inventory. Once worldwide available refined silver inventory is down to about 80 million ounces users will experience lengthening delivery lead times and to them that spells shortage. Then users will begin to hoard and they could readily take up another 100 - 200 million ounces of overhanging inventory. This, I believe, will trigger a major short squeeze. This scenario looks to me to be a re-play of 1980 with the possibility of a short-driven major upward spike whereupon the specs dump silver and down it crashes. However, down from $20 - $50 - $100?? I've been a metals analyst - 30 years on Wall Street - and was there, working for Bache when they traded silver for the Hunts during the 1970's silver bull market. This is deja vu all over again - the closest thing to a guaranteed bull market in a metal that I ever analysed. Hang in there, its going to be really exciting. Just remember that like the 70's, it took a few years for the story to fully develop and reward, handsomely, very handsomely, the patient. RH