Silvercorp Metals, Inc. (SVM) - Aggressive Growth Profile

As far as the SVM dividend goes , today is the last day to buy if want to collect the divvy on July 15 as the trade needs to have settled by the 30th .  I havent noticed that the dividend has made a big difference in the trading in the past. It makes a bit of a difference to those holding a short position, as they have to cough up the dividend on top of the margin interest it costs to have the short.

I think a positive move will begin with the buyback that is set to start on wednesday, i suspect SVM will be putting  a floor under the stock at about 9$.

Let's hope for a dividend increase too!

@maravich44

No, China wants a currency backed by silver and gold. It will create a stronger currency for the future. They also want to be part of the new currency or basket of currencies/natural resources that will eventually replace the dollar as the world's reserve currency. A very savvy chess move. They know they don't have as much expertise as the Canadians for mining. So, that is why they cut the deal. The Chinese don't have a beef with the Canadians.

Confiscation is a non issue in China. They have actually recently (last year) encouraged their people to buy gold and silver for saving and the citizens are buying a shit ton of it. There was a video posted somewhere about the Chinese encouraging their citizens to buy silver and gold. China has been a net importer of silver and gold as of last year. They used to be a net exporter. That has now changed. Below is recent example from India's desire for gold and silver.

http://www.zerohedge.com/article/indian-gold-and-silver-imports-surge-st...

Nationalization? I just don't think it is good business. If others like Peru (revoking a mining permit from Bear Creek yesterday) start nationalizing China will be a leader and not do that because there is too much silver and gold in the world to buy (right now). They don't want to do that because then other countries will not sell to them, and they want as much as they can get right now.

That could happen anyway because of the rare earth thing. But my guess is that China will accept silver and gold for rare earths. Again, a very potentially savvy chess move by China. I can see this happening only when silver and gold are close to extinction. But until then China is buying up just about any damned natural resource they can right now. Just watch the Bloomberg ticker at night sometime. Remember, China has US dollar assets of 2 trillion (treasuries, cash etc.) and a surplus of 3 trillion total. They have a lot of buying power. They would rather buy gold and silver on the stealth. Same with other natural resource assets.

There are few western countries mining in China. Silvercorp is one, and El Dorado is another. Not sure of others. But for the time being it is my humble opinion that if you are a good business partner with China, especially in natural resources, you will make a lot of money.

Silvercorp is a dividend payer. There are only a few of those too. I know Endeavour has thrown around the idea of giving one. As the POS goes higher and the supply more constrained more companies will pay out dividends. There is a thread for silver and gold miners paying dividends in the silver and gold miner forums. Take a look.

Of course if you are fearful there are many, many good companies in Mexico right now. Endeavour, Great Panther, Impact, First Majestic, Orko and many, many more. My portfolio is 90% Candian split among gold/silver companies. My silver is heavy in Mexico and South America. Silvercorp is only about 5% of my total portfolio. That being said I would like to increase the number of Silvercorp shares in the future.

This one is a hold for 20 years plus. If what is mentioned above comes to pass where Silvercorp becomes the major silver miner in China (and I think it will), well you will have a global silver mining powerhouse that will rank up there with BHP Billiton, Frensillo, Pan American, Gold Corp etc. in terms of yearly output. Just a matter of time in my mind.

I'm not sure how other people feel, but this is pretty much my number one silver stock. Low cost (negative cost) producer, pays a dividend, good future growth prospects, just discovered a nice bunch of gold on one property, stock buy back coming, etc. This is a great company IMHO. But be sure to do your own DD. It's part of the fun!

@JoeyJoeJoe

Thank you for the kind words. You really have to take into effect supply constraints and global demand from BRICS and emerging markets for investment/industrial use. I am happy to share the macro trends to pay attention to when investing in global silver/gold stocks.

From what I have listened to on KWN and read is that dividends will increase as the price of gold and silver increase. Eventually shareholders will demand it. This is basically what happened in the late 70's and early 80's. There was a couple of interviews where Eric King discussed with his guests past penny stocks that went from say .08 cents to $400+ a share back then. Now, the point is that they have to spend the cash somehow with record earnings. Usually in dividends and of course growing the company.

This is an advantage of holding shares. Not only will it leverage the amount of silver or gold in the ground, but you benefit from raised dividends (which can be rolled over to more shares), and possibly even share splits. As you reinvest your growing dividends to keep buying more shares you achieve much more rapid compounding growth. We are in the midst of many companies realizing record profits right now (Great Panther and Endeavour come to mind. And yes Silvercorp). Bottom line is this:

Low (constrained) supply = higher price increases + global demand for wealth protection/industrial demand = higher price increases + higher/record silver/gold company earnings = eventual dividend payouts and dividend increases = happy shareholders. Things can change but that is the gist of what happened in the late 70's and early 80's.

Based on what Jim Sinclair said recently about adding dividends to prevent shorts in the miners, he said that the shorts have to put up the money for dividends (which they don't like to do) so his thought was to keep increasing the dividends. This will free the stock to reach its true market value. I will see if I can find that link.

To understand why supply is constrained it was due to what happened when the miners took a dump in the 90's and early 2000's and then again in 2008. My guess in 2008 is that it was another rigged dump along with a miner/silver/gold liquidation by hedgies to cover their asses. What happened is that the miners stopped mining or put projects on hold. The mines were not economic. Now with higher prices they become more economic. Once that happens they need to ramp up production if possible. If not it can take up to 10 years to get mines started from scratch including permits, exploration, equipment etc.

This is why companies like Great Panther, Impact Silver and Endeavour were able to pick up large chunks of land with infrastructure already in place. To ramp up much quicker. They got those properties for a song within the last decade. So, with minimal expense they get the mines up and running to production. Meanwhile there was a supply constraint due to lack of mining. The demand didn't change. Folks talk about how on Ebay during 2008 to 2009 premiums were very high because silver was in short supply. I heard of people having to wait a month or two to get a green monster box of silver eagles or even silver bars back then. Now, the COMEX is running short and it seems that the silver mined is already in demand by the time it is out of the ground. See Eric Sprott trying to find silver for his PHYS silver fund. It took months.

I had forgotten about Minco Silver and Minco Gold. From what I have read these are both great China silver/gold plays. They are both on my to buy list for the future. I think right now Minco Silver is more expensive than Minco Gold. I can't tell you why I liked them, all I know is I remember them being a very favorable add to my China gold/silver companies list when I did DD on the companies. I'll have to revisit them again to remember. LOL.

I hope I was able to address your questions.

"China is realistically the only one who can save the Euro and fix the whole Greece issue without to much of a hassle, just like how China saved Hungary.  China has decided to back  Euro, dumping billions of US Dollars, it's the end of the US Dollar supremacy.  China is the big player in the currency war."

Hi GDH, there was a very brief discussion on Minco in posts #72 and 73 above.  I have a small position in Minco at the moment.  Seems to me like Minco should be producing soon...

This is not completely true. I have friends in China that are hesitant to buy gold and silver for fear that their government is using them to acquire precious metals. In other words, the conspiracy theory that the Chinese government is encouraging it's people to buy gold/silver is because they plan to confiscate it later. These fears did not start in the U.S., they started in China and other parts of East Asia. Whether there is any truth in it, I don't really know nor do I have an opinion except to say I'm unsure. I'm not sure it's true but I'm also not as confident as you are that's it's not considering their own people aren't. 

I agree, it's a great company but too much uncertainty for me to put too much resources in them. This is where I put some extra cash and watch closely and hopefully uncertainty diminishes and I can invest more.