Searchlight Innovations Inc T.SLX

RE: RE: Rationalize?

[RoyalBlue]

If I may, I'd like to offer an alternative view. I've been with this company since the .40s. I have a significant position that I plan to keep for long time. This is still one of my favourite stories that has a good chance of exceeding my other favourite companies when all is said and done.

Having said that, I did sell a portion of my position when the last NR came out in order to rotate some capital into something that looks better to me in the near term. What caught my eye was that SLX aimed to get to 1M ounces by end of year. That kind of took some of the wind out of my sails. The last production figure we had was with SMR when they were talking potentially 2.3 million ounces a year for San Marcial/Rosario. I modeled share price targets based on how much they would be producing, like a lot of others I presume. When silver was around $20, my models gave it a share price of .90 based on P/E of 10. So silver is double now but the production target is cut in half plus a lot more share dilution. So in my view, that at least partly explains the frustrating share price action.

Of course, reserves do count. And we have a lot more than we did before. But the market is judging us on production targets for the time being. Especially since there is not a lot of drilling planned for this year, compared to what some other companies are doing.

But management is doing the right thing They are focused on getting short-term production up and running, working out the bugs. With silver prices where they are, I don't think there should be any need for further dilution. It's a long term plan, it's a good plan. Three to four years from now we should be several multiples of where we are now. PATIENCE is needed with this little one.