Stockhouse Ticker Trax is equity specific research (Canadian listed and market cap < $300 million) published every Monday to paid subscribers. Our free Friday column may feature companies previously featured to paid subscribers (with a minimum one month delay) or discuss topics of interest to the general investment community and relevant to overall portfolio management.
Minco Silver (TSX: T.MSV, Stock Forum; $1.35)
www.mincosilver.ca
Corporate presentation:
https://www.mincosilver.ca/i/pdf/2012-12_MSVCP.pdf
On the bottom of their home page, there is an excellent 3D overview that shows the extensive infrastructure of this large scale silver project.
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Minco owns 90% of a large (higher grade and shallow) silver project in a well-populated region of China. Proven ounces are 55 million with almost 100 million more in the inferred category. They also have 200 sq.km with significant exploration potential.
The company has a very nice share structure (59 million shares) and most important, $65 million in the bank worth $1.10 per share. This puts a very low valuation on that silver project – a combination of this horrible market for junior exploration, the China discount factor, and pending environmental approval.
This is not only a very large economic silver project, but the extensive infrastructure keeps the capital costs very low. They have been working for several years on permits and just recently were able to submit the key environmental application.
Minco had been delayed on the environmental side because (approx.) two years ago a mining company created problems and the regional government stopped any mining approvals or applications (until recently).
By speculating on the $65 million cash, a person can mitigate risk. If the mine came completely off the rails, downside should be limited to the cash value range. If the company was successful in getting the environmental and mining permit, the valuation would change dramatically.
A lot of investors still have an issue investing in China - I am not one of them. I would rather buy resources there than some of these other high risk regions of the world.
For reference, Orko in Mexico is in the process of being bought out by Coeur D'Alene Mines for more than $2.50 per silver ounce.
Once you pull out Minco’s large war chest of cash, their silver project is valued at only $15 million (at $1.35 per share). Using only 50 million ounces silver, that equates to 30 cents per ounce.
This Video provides exceptional Due Diligence (approx. 20 minutes long)
https://www.gowebcasting.com/events/precious-metals-summit-conferences-llc/2013/01/24/minco-silver-corporation/play/stream/6571
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Disclosure: Danny Deadlock owns 20,000 shares of Minco Silver (TSX: T.MSV). _______________________________________________________________________
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