Santacruz Silver Mining Ltd V.SCZ

Two Companies,Two Headlines, Two Metals

[Blazesb]

There's probably not much in it but these headlines are different and they are no accident.

Yesterday's Santacruz press release:
 

Santacruz to Acquire Glencore's Producing Silver Mines in Bolivia Creating a New Significant Latin American based Silver Producer

And Today's Glencore press release:

Proposed sale of Glencore’s Bolivian zinc assets

Baar, Switzerland

12 October 2021

Glencore today announces that it has reached agreement with Santa Cruz Silver Mining, Ltd (“Santa Cruz”) for it to acquire the holding companies which own Glencore’s Bolivian zinc assets

[CountOfMeltedCrisco]

Glencore sees themselves as a base-metal miner; this from their own website  "What metals does Glencore mine? We produce and market a diverse range of metals and minerals – such as copper, cobalt, zinc, nickel and ferroalloys - and also market aluminium/alumina and iron ore from third parties." Not a word about silver;  they view silver as a by-product, which most zinc/lead

[Blazesb]

Glencore did this deal for one reason: smelter fees. Yesterday in another post i highlighted the following: 'Glencore will enter into a number of net smelter royalty agreements each at 1.5% in respect of the Bolivian mining business with Santa Cruz'.   This is a confusing statement.  1.5% of what?  Smelter royalties are NOT commonly known as smelter fees.  Two

[MacRellen]

Same, same, but different. I read Glencore's "Glencore will enter into a number of net smelter royalty agreements each at 1.5% in respect of the Bolivian mining business with Santa Cruz" and Santacruz's "Glencore will also retain a 1.5% net smelter returns royalty on the Assets (the "Royalty")" as the same thing. Meaning Glencore will get 1.5% of all metals

[CountOfMeltedCrisco]

They're just gaslighting in hopes of shaking some "scared shares" who don't understand the mining business or how it works.  1.5% is a typical NSR for zinc as can be confirmed by any quick search on "zinc smelter royalty" 

[MacRellen]

A correction on myself: Glencore will get 1.5% of what Santacruz earns on selling metals from their Bolivian assets to smelters. Or more precisely 1.5% of the net revenue Santacruz receives from selling metals to smelters (costs for transportation, insurance, marketing and refining are deducted from gross revenue).

[Blazesb]

Can i refer you to a regular poster on the Trevali board named firecracker74.  He is brilliant.  Scroll down his past posts and you will find near encyclopedic explanations for all things zinc great and small. Miners don't 'sell' to refineries.  They ship the rock to them and pay set refining fees per ton.  Processed metal is then forwarded to either of the two

[Blazesb]

Trevali Mining bought two African zinc mines from Glencore in 2017.  That was an education in smelter fees, LME inventories and sundry other Glencorisms.  It did not end well for Trevali. Like our intrepid SCZ mgmt Trevali owned one small mine (in Peru) and answered Glencore's offer to play with the big boys. In 2016 when I loaded up on TV in the .30s zinc was .80 lb.  Zinc

[tdsb]

Glencore has a class action lawsuits filed against them, they need money. This deal will work out for Santacruz. Big companies, small companies, all companies, can face hard times for many reasons and you Bazesb should have sold Trevali when you had a profit. Instead of trying to find falt with Glencore for your poor trading habits.

[Blazesb]

Uh, actually I sold at $1.20.  In at the low .30s out in the low $1.20s. Glencore is ALWAYS in court, always paying fines. They are past masters of third world mining and coming to 'understandings' with regulatory officials.  Once in a while they get snapped back and, contrary to your claim, have all the money in the world to resolve these 'issues'.   If

[MacRellen]

Interesting Trevali story. Thanks for sharing. And I'll check out firecracker74's posts. I assume the offtake rights ("a right to acquire 100% of the offtake from the Assets on market terms") mean Santacruz is obligated to deliver its concentrate to Glencore smelters. So Glencore will get income both through 1.5% NSR and smelting fees. But the smelting fees would be the same at

[greendayyyy]

There is always a risk in this kind of transaction. You are always dependent on the price fluctuation of metals. Hopefully SCZ did their homework. Anyway I like it when a company likes to take risks to make the company grow. Example of IMG that I hold in my portfolio. More than 1 billion in the bank and a management of golden age club that does absolutely nothing to grow and nothing for the

[Blazesb]

MacRellen, yes smelter fees are standardized...set every year by refiners around March then applied back to/from January.  And yes, the bottom line is SCZ is running with the bulls...sure it could work out beautifully. But consider this cautionary tale.  In 2015 Trevali owned one small zinc/silver mine in Peru.  Zinc was .80 lb.  Share price .30.  Today zinc price $1.60

[CountOfMeltedCrisco]

Then you need to sell every Share you own the minute trading resumes, don't you?  And don't go out in bright sunlight, you might see your own shadow and die of fright. 

[Blazesb]

Count.  Simple investments are the best.  Clearly that's a complicated thing for a simpleton such as yourself.   

[CountOfMeltedCrisco]

The best investments are the ones that make the most money, the simplicity or complication is irrelevant and that's why humans were given intelligence:  to use it.  And your hysterical contradiction just proves you're dumber than a G/d box of rocks.  You like "simple" investments? Maybe your kid's lemonade stand.  You can even be their best customer. 

[MacRellen]

And the best message boards are the ones where opposing views are welcomed and discussed in a civil manner. If every poster is a bull always seeing the glass half full, the board turns into a useless echo chamber.