RE: SST Q4 financials1. Silverstone cannot compete with Silver Wheaton. Wheaton has overbidon every deal. Silverstone has only done one deal with an unaffiliatedproducing company (Lundin) since inception two years ago. All otherdeals were and are non-producing (Aquiline) or affiliated (Capstone, orSherwood Copper which is now Capstone.);
How can you tell SLW has overbid on every deal? Have this information been disclosed by SST?
You are right, SST did only one deal with non affiliated companies.
As I stated in previous posts, my sense is that SST/CS management did not really want to embark in the silver stream business, they did it only because SLW did not want to make the Cozamin deal.
We need a management that believes in this business.
I also think that SLW is now too large to go after small silver streams (there has been some criticism on the latest small deals they made). SST is much smaller (about 1/10th) so it can focus on small deals (say 500K - 1M oz/yr).
2. Another severe plunge in base metal prices, copper especially, dueto a derivative meltdown or whatever event could cause a conflict ofinterest between Capstone and Silverstone. Imagine for example thatcopper goes to 80 cents and Capstone decides it is in its bestinterests to put Minto and Cozamin on care and maintenance. Imaginewhat that would do to Silverstone's stock price to have 90% of itssilver streams cut off. Our price is then 25 cents and Wheaton wouldpay us a lot less than they are paying now.;
Do you really think the price of copper could plunge below, say, $1.20 for a sustainable long period of time putting more than half of the copper mines out of business?
And ... if CS stops production for a while, this will just delay revenue to SST, it will not reduce our claims.
It would have been a problem if CS mines were medium/high cash cost mines, but the assets themselves are low cost, and even if CS goes bankrupt we will still maintain rights on silver production from the next company that will operate those mines.
Not to mention I would be extremely happy to buy more SST shares at 25 cents.
3. It is sort of a moot point that we are closer to the bottom of thesilver market than to the top of that market. If silver goes back to itold recent highs (roughly $21/ounce) then Wheaton will go to its oldhighs, and if so, the value of our position in SST (to become SLWshares) will also go to its old highs ($3.60 a share). In fact, sinceWheaton will be worth more because of its cash flow from Silverstone'ssilver streams and all other deals it made in the last 12 months, thevalue of our positions could go higher than $3.60 a share (say, to$4.50 a share) based on $21 silver.
Well ... if you are right on this point, why didn't you buy SLW shares instead of SST if they were to offer the same appreciation potential?
I like SLW, but I bought SST shares because I considered them much cheaper and having an higher appreciation potential.
But I'm not happy to have bought SST only to find out later that I have got the same return on capital I could have achieved by buying SLW.
Finally, the debate about which is the right company to send emails to is not very productive.
Sending mails to both companies will certainly not hurt.