To Genco or not GencoIf the management of Silvermex want to build a company that is respected and fully valued in the market, then they will begin this year with a new strategy for the merged company involving regular, honest press releases; and they should be mindful of protecting and maximising the share price through intelligent corporate and marketing strategy (list on AIM, commission research reports from Edison and XCap).
If they want for Silvermex to become a market leper they should dilute the company at every opportunity to grow its resources through acquisition, and should be indifferent to the preference of the market for regular news and layman-friendly marketing.
It is too early to say which course will be chosen. I very much hope it will be the former. If it is, then they certainly have the goods to see the share price appreciation track that of Arian Silver. I can't for the life of me imagine why anyone would not wish to follow a strategy that is patently working. Unless you don't like to see a 1300% calendar year gain.
I would hope that with the largest shareholder remaining on the board, Mr Anderson can bring his influence to bear to ensure that the company is run for the benefit of and in a manner compatible with the preferences of its shareholders and not for the benefit of or at the whim of its officers.
I assume that there was nothing newsworthy during December other than the private placement. No production or exploration indications. Will we have to experience forthcoming updates like a bolt from the blue, with then months of radio silence before the next sudden shock? Like mushrooms having been kept in the dark and fed less than sh*t, suddenly to be pulled into a brief blip of light?
It is premature to be concerned at this point, barely a month after the merger completed. This post is not an accusation; it is merely intended to reflect the fact that the calendar has turned. There is no reason to be pessimistic about whether the board will drive the company forward in a manner mindful of its shareholders' interests. BUT we are now entering possibly the most bullish eight weeks of the year, and arguably the most bullish eight weeks of the last thirty years, if or as silver begins its journey towards $50. Now is the time for silver mining companies to drive forward, nurture investor interest and outperform. If you can't focus attention on efforts to get the market to re-rate you in a climate of silver price explosion, exactly when would this be mobilised? A mid-August PR push, perhaps, while everyone is on the beach?
If there is nothing but the hiss of static from Silvermex over the next weeks, while the likes of Arian Silver provides production and exploration updates and the share price projection forecasts in the Xcap and Edison research reports are updated by those companies and proactively across the bulletin boards by investors, then I would begin to be concerned about whether the SLX board sits in an ivory tower stroking its options and fantasising about how they can dilute us into major territory, rather than devoting at least as much attention to maximising value for the shareholders whose interests they are required fiduciarily to serve.
I'll have no truck with those who pathologically worship the great and good ("I trust the board; they surely know better than the little people"). Hecla and Silver Standard are two of the least well marketed silver miners out there. I bought in because those people know how to mine, not because they know how to strategise their marketing. Now is the time for the board of Silvermex not to ask for our trust but quite simply to take the simple steps necessary to earn it. Information, clarity, commitment to maximising the impact of the SLX story.
Mining is a hard enough business. It would be truly absurd to work so hard on getting the substantive fundamentals right, and then whether through lack of imagination or indifference fail to pay attention to the relatively simple actions necessary to get the fruit of those fundamentals valued optimally.
Let us hope that during the course of this month the board of this new company begins to demonstrate that they are clued up and plugged into being seen to serve the interests of the Silvermex shareholders as well as doing good things behind the scenes.
AIM listing, defined exploration plan, Edison and XCap reports, no dilution, regular updates on increasing production - this would/will make for a truly fantastic year for the SLX.TO share price.
Happy New Year