RE: RE: slxThanks for the kind words!
I should disclose that I AM a massive fan of GATA (though I don't take everything they say as gospel - they understandably hunt for all interpretations that support the cause, and one can't rely on everything they latch onto being 100% proportionate or accurate). I DO worry about confiscation, punitive taxation or severe interference in the trading of precious metals, and I, erm, what was the third one? Oh yeah, if anyone in this whole imbroglio IS blessed with trustworthy foresight, then it is Ted Butler, and so, yup, JP Morgan imho DO have a - reducing - huge mountain of paper shorts. The article in the FT the other day was comical - all of a sudden they admit to reducing the position!
Farshooter, like you I am aggressively/stupidly (delete as appropriate) undiversified. Silvermex and Arian Silver are the only two shares in my portfolio. After making and losing money in majors and start-up juniors from Ecuador to Eritrea, silver, gold, copper, zinc, nickel etc, I came to the determination that I would stick to the following recipe: primary silver, "safer" jurisdiction, sufficient ounces already in the ground to be going nowhere, at the cusp of production, with massive exploration growth potential, no dodgy owners, and a clear endgame. I would be interested if anyone thinks there are silver plays that fulfil those criteria as well as SLX.TO and AGQ.VN/AGQ.L - let me know!!! I am sure there are some.
With AGQ.VN/L it is a great CEO, clear exploration potential being advanced aggressively and Sprott's sizeable stake. Arian is a takeover play; the great thing is that the AIM listing and superb marketing is materialising takeover value in the share price proactively. With SLX.TO, it is all about the revaluation of the company from the (continuing) steep steep discount to the asset's value that came about during the troubled Genco years. The healing process in terms of fundamentals was completed with the merger and the bringing onboard of people capable of running SLX.TO into the endgame of becoming a mid-cap-to-major producer in time. All they have to do is be sensible and the dissolution of any justification for the discount will filter into the market in due course. As you know, I'd like to supercharge that process by having them follow Arian's lead.
I have dragged my father kicking and screaming into some silver exposure. I couldn't in good conscience put his money just in two shares, so I chose a basket of SLX.TO, AGQ.L, FR.TO, GPR.TO, FVI.TO and SLW.TO.
Farshooter, if you don't mind me asking, which are the puts you elected for to protect your portfolio? I have been toying with the idea but my initial math led me to think that I would be taking too much potential profit off the table to make it anything other than a nominal hedge.
As for the share's potential, well it's worth reading the Edison and XCap research reports on Arian Silver to see in cold black specific ink their bullish view on how far going into production, tripling the resource and a rising silver price will affect the stock. If SLX.TO enjoys all these things, the sky's the limit. Silver rose 50% in the last few months, and a number of silver miners rose 2x to 3x - there's leverage in equities right there. If silver doubles from here, why wouldn't SLX.TO rise 300% to 400% at least? As they get into meaningful production and list on AIM (come on!) thereby dissolving the Genco discount, I would say there's a 200% to 300% rise in that.
So all in all, absent black swan macros or micros, I would be very bullish about this share in due course hitting $10; and assuming they manage to maximise the corporate marketing and the resource growth, get the open pit mine established on favourable terms and silver keeps going where I think it will, frankly I'm not sure I'd be bored before $20.
But you know, this IS black swan season. Nothing in life is for sure. I'd sure as hell rather be in Mexico than Ecuador, Nicaragua, Africa or the USA. But you never know. Things are going to get crazy when the tipping point from fiat to gold cover clauses happens in currencies.
Be interested to hear what anyone has to say about puts to protect, and any other silvers that strongly fulfil the above investment criteria.