Santacruz Silver Mining Ltd V.SCZ

Lifeexprt, your opinion please

[Windtalker]

Tick tock. Getting close to earnings and drill results. I'd appreciate your analysis on what will transpire going ahead with the warrants. Something in the neighborhood of 120 million share. That's some serious overhang to chew through. Thanks dd.

[Lifexprt]

Tons to chew through indeed with the silver lining most aren't pressing dates with October 2023 being the earliest giving us a year as most warrant holders exercise close to expiry. There will be selling pressure once a batch is exercised whenever that is, for time being waiting on results and like I said weeks back we should drift to 50's based on production results alone with financials

[Windtalker]

Thank you David. You're always the gentleman. Truly appreciate our interactions. Cheers.

[Lifexprt]

Anytime. Once it reaches full value I will diversify into other names, for time being it's nowhere near.

[Windtalker]

I'm struggling as to how to fully value this company as it's not a pure silver play (which is a good thing in many respects thanks to the zinc component). Rational full valuations for pure silver play producers in my opinion run 10 to 20 times FCF. Mixed metal producers less at 5-10 times. I'd enjoy/appreciate your thoughts on how to value SCZ going forward. 

[Lifexprt]

There aren't really that many pure silver plays as most of them apply some sort of byproduct credits in their cost calculations. I think the largest factor here is the price of zinc and actual free cash flows generated from operations. 5x is on the lower end as I would be leaning into the 10x figure especially with sorcaya and drilling prospects. Q2 financials will show quarterly FCF which I

[Windtalker]

At 10x valuation FCF OF 15 mill = 150 mill divided by 330 mill shares (non-diluted) = 45 cents per share, which is where we are today. It seems we are fairly valued now. What am I missing here. In my opinion, SCZ is a strong leveraged play. This will sing when silver price rises hence my speculative investment in the company. Thoughts?

[Lifexprt]

$15 million FCF quarterly.

[Windtalker]

I understand. Thx Life

[jcw604]

Is EV to FCF ratio supposed to be based on yearly or quarterly FCF?

[Lifexprt]

Annual 10-15 multiplied by 4 so roughly 40-60 FCF annually.

[Windtalker]

When I began investing in SCZ, I gave little attention to the zinc component. It has my attention now. 

[Lifexprt]

Bolivian assets are skewed towards zinc at 55% or so. Breakeven costs at $2,500 per tonne which is why the company is able to maintain a relatively low silver AISC (under $15) when accounting for zinc credits in their cost calculations

[Windtalker]

Wayne Corso appears to have extensive experience in mine creation/building. Santa G. and Sorocaya? A fine addition to the team

[Lifexprt]

Definitely "Senior silver producer" does sound nice

[greendayyyy]

Very good move by SCV to hire Wayne. Success always comes through a competent management team. I will probably increase my position if the price slips below .40. For now the mines are still being slaughtered and shunned but in a few months we will be glad we bought in at these low prices.

[greendayyyy]

SCZ typing error

[Atima]

Corso is on contract from JDS- they do this with Companies that can't otherwise hire competent staff. JDS has had its fingerprints on several Companies in a management role that have floundered- Tahoe, Continental, Farallon. SCZ has a troubled past, Bolivia is a tough, expensive and unforgiving place. Caveat Emptor!