Santacruz Silver Mining Ltd V.SCZ

3Q Predictions

[VoxContrary]

I have a very simple xls model going to predict the financial results from the operating results.

Assumptions: cash cost per ton stays flat at $41.44 (this is conservative given the increased tonnage should drive it down).
Average realized price is 85% of the average spot price.  I'm think that 15% discount at the mine to spot is enough to finance distribution.  Anyone who has industry experience is welcome to tell me what the real value should be.

With that, I'm showing a quarterly gross profit of $8-10 MM.  Extrapolating to say $35 MM Gross Profit annually, this stock is trading at ~1.7x gross earnings.

Further, given that 4q is expected to be a blowout with the new scooptrams further expanding processing, it seems that the leadership team plan to pay the $20 MM Zimapan purchase out of operating cashflow!

EXK is roughly double the production at 1.8MM AgEqOz per quarter, but their market cap is 10x that of Santa Cruz.

So, the question is: under what circumstances will we see a price of $2.00 per share?

[mferguson71]

exactly! I think what the market needs to see is two quarters of good earnings and what management does the with free cash flow. Free cash flow should be talked about in the next 6 months as there will be a need to do something with it in the near future. share buyback, small dividend, pay of debt, look for under financed projects, or a combination of all of these.

[VoxContrary]

I realized over the weekend that my admittedly simplified proforma did not include any Net Smelter Fees paid to partners.  I will try to add that in, if I can find the right percentages.  Even so, I expect earnings to be over $25 MM annualized. One thing I have admired about this leadership team is their ability to reduce cash cost per ton, even with next to $0 to spend on cost-saving