Comparison with AGQ.VNSilvermex and Arian Silver have very similar market caps.
Arian has 60m ounces of silver equivalent, has just started production (0.7m ounce pa) and is embarking on a major drilling campaign to explore the remaining 90% of their property to get up to a stated target of 180-200m ounces. It is, fundamentally, a takeover play.
Silvermex already has the target ounces in the bag, and has at least as much exploration potential. Sprott has recently taken a position in Silvermex (in the pp) as it has with Arian. Silvermex is likely to develop into a major under its own steam rather than go looking for a takeover bid.
I think there are some similarities between these companies, and the fact that Silvermex already has three times the reserves of Arian, with 95% of the strike zone yet to explore, tells me that the Silvermex market cap should be somewhere in the region of 3x where it currently is - minimum - once the market digests that it has returned to the ranks of producing. And that's before the resources are increased massively through exploration, and aside from any rise in the price of silver.
Assuming, additionally, that Silvermex can add to its reserves in a similar proportion to Arian, which given the exploration scope seems pretty conservative, we should be looking at a 7-10x increase in the share price merely through hitting our stride producing and following up exploration
at silver $27-30.
Most of the decent mid-cap silver producers have doubled to tripled with the recent rise in the price of silver. With the same proportionate rise happening again, potentially, during the timeframe in question, assuming silver hits $40-$50 per ounce, is it not reasonable to apply a multiplier of 2.5 to our, say, overall, 8x appreciation from becoming a fully valued producer with expanded reserves?
Conclusion: I would be looking for a 20x gain in SLX in the fullness of time, by (1) establishing production, (2) resource expansion and (3) silver reaching merely its next stopping post on the way to three digits.
I would like to see the CEO take a leaf out of Arian's book in how the company presents itself. I am not saying position SLX for a takeover or focus on raising the share price at the expense of the "foundation". But it's good to have a clear target, to add clarity and coherence to the direction in which the company's going. What's the point of springing news about a resource expansion on the market so that it digests it in a sudden paroxysm? Why not set a (conservative) target, and let the stock breathe, like a fine wine, so that the market can digest the company's prospects at its leisure, and price the company's value fully, before, hopefully, a figure comes out that exceeds the target resource expansion.
Arian have now got an onsite lab for their drilling program, so that they can churn out results superquick. They are putting out press releases with a regular rhythm, keeping shareholders and investors informed of what's happening. It's no coincidence that their share price is performing healthily. I would like to see SLX take a leaf out of Jim Williams' book. I don't want the CEO to draw the wrong conclusion from the conduct of the old Genco board and be reluctant to stoke the flames of investor enthusaism; and neither do I want to see the share price held down due to any indirect compensatory shenanigans. I want the CEO to light the rocket fuel under the share price that it merits.
If the company is undervalued by the market due to outdated perceptions, then the board has a fiduciary and an economic duty, not least with an eye on the eventual share price when it comes to financing the open pit mine (but let's see debt not dilution please), to take active steps to awaken the market to according SLX full value. It is still cheap as chips with a past-its-sell-by-date-Genco-discount, and the completion of the merger, with the Hecla and Silver Standard people coming on board, was the final step, after replacing the old board and then getting the company in order, in putting that baby to rest.
Silvermex is now radically undervalued with no justification anymore for its low valuation, and the CEO should not expect the market to make all the running in working that out. Shareholders and investors like being informed. News releases are free publicity and free marketing. So long as they are not about what the mine manager had for breakfast and they provide indications of progress, then open the floodgates!
Here's the interview with the CEO, for anyone who missed it:
https://seekingalpha.com/instablog/503905-marco-g/97873-bonanza-aztec-silver-interview-with-with-genco-in-merger-with-silvermex-ggcrf-tsx-ggc
and here's the Gold Miner Pulse valuation of SLX which suggests that with the
current ounces in the ground, fair market value once the company effectively rejoins the ranks of junior producers, is nearly 5x higher than where we are now:
https://www.goldminerpulse.com/blogs/silvermexResourcesValuation.php