Hommel rebuking Sinclair......interestingIt's long read but very interesting!
Remember TVI at the moment is more a silver producer than a gold producer!
Silver: about 300 times too cheap.
By Jason Hommel
This week, I'll be rebuking Jim Sinclair. If you think my words below are harsh, it's that way for a reason: the Bible tells us to rebuke and refute wrong teachings.
1 Timothy 5:20 Them that sin rebuke before all, that others also may fear.
2 Timothy 4:2 Preach the word; be instant in season, out of season; reprove, rebuke, exhort with all long suffering and doctrine.
Titus 1:13 This witness is true. Wherefore rebuke them sharply, that they may be sound in the faith;
Last week, I shortened my commentary, and summarized my thoughts on silver's potential when I wrote, "I expect the silver price to rise substantially, moving up in value by about 300 times." (Note, that's not an increase of 300%, but 300 times. IE $7.30 oz. x 300 = $2190/oz. for silver.)
My comment last week was brought to Jim Sinclair's attention by my readers and not by me. Jim Sinclair, for those of you who don't know, is known as "Mr. Gold". He was a "leader" in the last gold bull market in 1980, selling at the exact top (or causing the top), and is widely regarded as a genius by many in the gold world. (Although many also see him as a bit eccentric.) Jim Sinclair has a wide following, and he often degrades most other "gold advisors". Most notably and recently, Jim said he would stop his commentary if gold did not exceed about $470/oz. sometime this fall. Jim was wrong, but he's still writing, but to access it you have to sign up for a password. I read him occasionally.
Anyway, Jim heard about my comment, and scoffed and mocked on Friday, November 05, 2004, 4:21:00 PM EST at jsmineset.com
"This is a time to steer clear of the mad men that come flying out of the woodwork. I received a fax asking me about such a wild one who had predicted silver would trade at 300 times its present price in the near future. I answered that this person needed a good dose of thorozine.
You need to stay disciplined and rational in order to make the best of what will occur when the "bearish neckline of all time" in the US dollar is pierced on the downside."
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My response:
First of all, I'm hardly "flying out of the woodwork". I've written on gold since 1998! I've produced my report weekly now for a year, starting at the bottom. I was buying silver stocks in the summer of 2003, and earlier, when silver was below $4.30/oz.! I attend the gold shows, speaking in Vancouver, Toronto, Idaho, & Chicago. Where was Jim Sinclair when silver was so cheap? He has still hardly expressed any awareness of silver's fundamentals, and silver has soundly outperformed gold since then!
Jim Sinclair's company, Tan Range, has been about flat to down since 2003 (About $1.50 to $1.20), and silver stocks, on average, are up by about 300%!
Tan Range also has many agreements with Barrick, the most notorious hedger and short seller of gold in the entire industry. Barrick is being sued by Blanchard for manipulating the gold price downward!
Furthermore, Jim hardly understands the nature of paper contracts, and how different they are from real gold and silver. I've written to him about 4-5 times now regarding my essay that I wrote about a year and a half ago, "The Moral Failures of the Paper Longs - 22 January 2003
https://www.gold-eagle.com/editorials_03/hommel012203.html
Jim has never responded.
Jim is a hypocrite. He buys the futures contracts (or options), and then tells his readers to go out and buy physical gold... that's hypocritical.
I am not hypocritical, I tell people to buy physical as well as stocks, and I'm invested in both. I tell people to shun the futures contracts, and I avoid them as well, because I understand the risk of default and counterparty risk!
Jim is a hypocrite. He says miners who are short sellers of silver are fools to sell in a rising market, and he has also pointed out the problem of counterparty risk. Fine, I have no problem with that, and I agree. Yet Jim buys paper long contracts, or options, which are dependant upon a fool taking the other side of the trade who must short to him, and his counterparties may default--meaning not pay him the gold!
Jim's comments show his ignorance. I have clearly presented why I expect silver to rise in value by about 300 times in past essays. Here's the reasoning in a nutshell: Paper money is fraud. All frauds fail. All paper money has failed. Silver, when it was plentiful, was a silver dime for a day's wage. Today, given that silver is scarce (consumed by industrial use), and the supply and demand fundamentals are what they are: 900 mil oz. consumed annually, 600 mil oz. produced annually, then when paper money fails completely as it must, then silver will rise higher in value than the historic value. Today, a day's wage is about $150/day. Today, that will buy silver at 5.4 times face value.
$150 / 5.4 - 27.77 face value of silver dimes.
That's 278 silver dimes for a day's wage today!!! That proves silver is undervalued by a factor of 278 OR MORE!!!
Do the math, Jim Sinclair, and please give a rational response!
Why in the world should silver be less valuable when we WILL and MUST return to using silver as money, in an era when there is less silver than ever before?
Silver rising in value by a factor of 300 times is CONSERVATIVE, and RATIONAL, and IRREFUTABLE!
And if Jim cannot deal with reality, and cannot give a rational and reasoned response to back up his scoffing, then I'd recommend that he humble himself before God, and repent of his greed and sins, and perhaps the Lord will allow him to see clearly. Drugs are not the answer.
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For stock info, I'll repeat, exactly, what I wrote last week:
Usually, these companies get "lost" in the large report that covers 85 companies.
IMA Exploration, Clifton Mining, Endeavor Silver, and Kenrich-Eskay. (I own shares of all of these companies, and none of these companies have paid me to write about them.)
I recently mentioned IMA Exploration as my "top pick" both in Toronto and in Chicago. The reason is that they are discovering a LOT of silver in Argentina. They have about 400 million ounces in the ground, at least, by now, with a market cap of about $140 million. They may have up to a billion ounces. But their silver is high grade, and open pittable. Furthermore, they have agreements with 20 major mining companies that prevent hostile take-overs for the next two years. Although the stock price has gone up from about $1.50 to $3.50 in the last year, I think the stock is a much better value today, given that we now know more about what they have in the ground. This is a clear example of where you cannot simply sell a stock if the price is up-you have to also take into account the changing fundamental story. Jay Taylor also mentioned IMA Exploration in Chicago as his favorite silver pick. (49,059,825 mil shares fully diluted (May 27, 2004))
Clifton Mining also excites me, but for another reason. I like their colloidal silver. I interviewed Ken Friedman, president of Clifton, while I was in Chicago. My main concerns were the unique properties of their particular patented colloidal silver, and what government support they might have. First, their colloidal silver product is more powerful than others. Second, there are people in government who are investors in their biotech company. Third, their colloidal silver will be manufactured in Brazil, and will also be purchased by that government! Market cap about $50 million (47 million shares fully diluted (May 2004))
Endeavour Silver is a very exciting production story. Typically, producers have a higher share price, because many investors want to own a producer. Well, Endeavour Silver is already a producer, and they aim to produce a whopping 4 million ounces of silver within about 2 years. Yet, their market cap is not half that of CDE, which produces 9 million ounces of silver per year, but rather, the market cap of Endeavour Silver is a tiny $26 million! (25.7 million shares fully diluted (May 28th, 2004))
Last, but not least, Kenrich-Eskay is an exploration play. One of the top 5 silver mines in the world is the Eskay Creek silver mine currently operated by Barrick, formerly owned by Homestake, which was acquired by Barrick. Kenrich-Eskay's property is 10 km south of Eskay Creek. Kenrich-Eskay is discovering Eskay type mineralization in the Eskay Camp. One grab sample from the C10 Zone contained 23,726 g/t silver. That's 741 oz./tonne! See press release Oct. 6th. Kenrich-Eskay's market cap is about $12 million dollars. (29.2 million shares fully diluted (July, 2004)) Homestake was willing to pay up to about $50 million for Kenrich-Eskay back in 1996.