Revett Minerals - currently WAY undervalued!

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mrgneiss
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Revett Minerals - currently WAY undervalued!

I can't believe no one has started a Revett thread yet on here!  Seriously, THEY have the BEST upside potential of any silver stock ; ) !

This article does a better job describing their complicated situation (hey, if it was simple they would already be fully valued!) than I ever could:

http://seekingalpha.com/article/246368-revett-minerals-seeks-amex-listing-multiple-catalysts-should-revalue-shares-high?source=email_investment_ideas

Check out these Resources!

Troy:  http://www.24hgold.com/english/project.aspx?id=85077296F8350

Silver: 90Mozs   Copper: 950 Million lbs

Rock Creek:  http://www.24hgold.com/english/project.aspx?id=22404732E6680

Silver: 229 Mozs   Copper : 2.2 billion lbs

Important facts:  New Montana legislation allows mine development work to continue while any cases are being argued in court.

The Forest Service has approved the Rock Creek mine, the judge however wanted some parts of their plan modified, you can read the rather lengthy decision on Revett's website.

Environmental FAQ's:  http://www.revettminerals.com/documents/PUB%2010.06.05%20Revett-FAQ-Draft%20QA.pdf

One interesting fact: The last exploration of Rock Creek was over 20 years ago, because surface drilling has been banned in the park, and future drilling will be done horizontally from underground.  However, because it was done so long ago when the price of silver had collapsed, they didn't exactly go all out with the drilling, thus some expect that once further exploration is commenced on this property the resource will easily top 300Mozs of silver, I think they have already exceeded the original estimates of the resources in the Troy deposit by many times, and it is all part of the same geological formation.  DYODD!

Edited by admin on 11/08/2014 - 06:09

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RRJJ
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Revett is my second pick

Revett is my second pick after Avino. I think the potential is huge for Rock Creek and the current production at Troy isn't that shabby either. I have one concern with Revett though. Since the mines are located in the US I'm thinking that confiscation by government authorities might be a greater risk then in other places.?

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That is a concern with

That is a concern with Revett, but I'm not that worried about it.  First, if it happens, I think it would be a least a few years out, and you can get into the stock and make some money when Rock Creek is approved then get out.  Also, confiscation before was only in gold bullion, I think silver is too widespread in industry to have any sort of confiscation enforced.

What do you like about Avino?

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Yeah, I think you might be

Yeah, I think you might be right about not needing to be to worried about confiscation. At least not yet.

I wrote a new thread about Avino and what I like about it here:

http://www.tfmetalsreport.com/forum/avino-silver-gold-mines-asm/205

RRJJ

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Thanks RRJJ

Your points have me interested!  I'm going to do some more DD on it, I know I looked at it back in the Fall, but passed, but only because other opportunities were amazing, but I will revisit it now.

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Mrgenesis, please let me know

Mrgenesis, please let me know what your DD gives! 

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mrgneiss, I thought I read

mrgneiss, I thought I read they were hedging some production at the moment. That was earlier this year. I had a stink bid in on it at that time but removed it when I read of the hedging. Also, I thought there was some issue with the Rock Creek mine getting started up. Either environmental or perhaps with native peoples. Can't recall. I will do some more DD too and get back to this thread.

If those things are in the clear then good. This one has been on my radar for quite a couple of years.

PS I know the price has been below the stink bid I put in back earlier in the year. They had a reverse split too not that long ago.

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mrgneiss
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TGD, they did do some hedging

TGD, they did do some hedging for this year, in my mind one of their biggest mistakes so far since management saved the mine from bankruptcy in 2009, but in the overall scheme of things not that big of a deal, as it will only last six more months.

They have hedged 25% silver @ $18.50 and 50% Cu @ $3.40 for 2011.  I think it is prudent to do a little hedging, for next year I hope to see hedging numbers around 10% - 15% silver @ $50 or higher, and maybe 20% copper @ $4 or higher.  Anyone who advocates zero hedging has never run a company before, you have a duty to the employees and shareholders to protect against black swan events, and numbers like this would still allow them to capitalize on almost all of any upside above these prices.

The environmental situation is so long and tortuous, let me try to briefly sum, the permits for Rock Creek have been approved by the Forest Service, but the judge wanted some changes made, and the new permits are expected next year.  Under the old laws, the permits would have been re-issued and challenged immediately and the mine development put on hold again, but under the new Montana legislation the mine development can go ahead while the challenges are in court - great news - and the Forestry Service has said numerous times that under existing Mine laws and the Environmental Act they have no choice to approve the mine.  Most of the mine will be about 1000ft under the National Park, only about 40 acres will disturb parkland.  The big issue is the water quality of the run-off, this can be very acidic if not treated properly and ruin streams, and Revett has committed to recycle as much water as possible and that water which does get discharged it has also committed to treating to a drinking water standard - there is no higher standard of treatment.  Also last year they hired a consultant who is an expert in the field of groundwater environmental issues - Albert Appleton.

In July there will be an appeal of the sections of the case the judge dismissed - the judge ruled against  the environmentalists in many areas - and this appeal begins mid-July - hopefully there will be no surprises.

Many other companies have similar resources to what Revett has at Troy and have $300 - $500 million market caps, so I think RVM could easily double or triple from this point.

But the big play is Rock Creek.  At $30 - $50 silver, once Rock Creek gets the go ahead, I believe the combined two properties will be worth at least a $1.5 Billion market cap, and I believe we will see triple digit silver within the next couple years if not sooner, then we could easily be looking at a $3 billion market cap.  But we have to be careful of what happens in July.  If you have the trading experience it might be a nice stock to sell puts in, if you believe as I the downside is limited and the upside is huge.

But it's not really a penny stock anymore.  Some nice pennies we're focusing on in our thread are Alto Ventures which  I would highly recommend at it's current price and Malbex Resources, they are drilling in a region that has had some major discoveries and they have already found decent amounts of gold.

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Yes, water concerns....

mrgneiss, certainly wasn't trying to rain on your parade. I really do like Revett. Thanks for the DD as you can see by my post, I was up late and hadn't had a chance to do the DD yet. Effectively, they have a half a billion oz. of silver alone, nothing to sneeze at. If I can get a chance I will get in. Running low on the powder.

The environmental concern is a big one. Hecla mining just had to pay $263 million to the EPA for past transgressions. But mining today is much more eco conscious. I'm not sure I would be able to invest if it were not. Between that and fixing up the land after a mine closes and taking care of the community the mine is in whether foreign or domestic, I think today's mining leaders are much more aligned to a "greener" responsibility in mining. Boy, back in the day though. Wow! Heard many a horror story. Like up in Duluth MN in Lake Superior in the 80's for instance.

One more note, this law that you speak of will probably bode well for other US companies like Mines Management in Montana and US Silver though, I think the latter is in Idaho. Thanks for the update!

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mrgneiss
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Please tell me like it is...........

TheGoodDoctor wrote:

mrgneiss, certainly wasn't trying to rain on your parade. I really do like Revett. Thanks for the DD as you can see by my post, I was up late and hadn't had a chance to do the DD yet. Effectively, they have a half a billion oz. of silver alone, nothing to sneeze at. If I can get a chance I will get in. Running low on the powder.

The environmental concern is a big one. Hecla mining just had to pay $263 million to the EPA for past transgressions. But mining today is much more eco conscious. I'm not sure I would be able to invest if it were not. Between that and fixing up the land after a mine closes and taking care of the community the mine is in whether foreign or domestic, I think today's mining leaders are much more aligned to a "greener" responsibility in mining. Boy, back in the day though. Wow! Heard many a horror story. Like up in Duluth MN in Lake Superior in the 80's for instance.

One more note, this law that you speak of will probably bode well for other US companies like Mines Management in Montana and US Silver though, I think the latter is in Idaho. Thanks for the update!

TGD - No please, I want to hear criticisms,  if my emperor is wearing no clothes I want to know - I can take it like a man!

You're right, I love the outdoors and would have a hard time investing in any of these miners if they were screwing up the environment - and not planning on remedying it.  Most mines today need to post a reclamation bond before any serious work gets done, it usually isn't less than $50 million and often is more - this avoids the shirking of responsibility down the road if they go bankrupt, etc.  I think this may be part of the problem with Revett, in it's old incarnation about two decades ago as the Sterling Mining company it was considered a bad actor in terms of it's environmental practices, but the management, board, owners have completely changed now.

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I am invested into RVM  with

I am invested into RVM  with a good % of my portfolio, and at the current valuation it is likely the best buy in the silver juniors bar none.  Even leaving the huge Rock Creek project out of the valuation process RVM still looks undervalued just on Troy alone.

They of course recently had some drilling done with good results.

Troy exploration update

Exploration core drilling at Revett Minerals' Troy mine in western Montana has identified an additional 1.2 million tons of indicated resource (1,157,946 tons at a grade of 1.07 ounces per ton silver and 0.41 per cent copper estimated as of June 1, 2011), in the C bed mining horizon, approximately a 50-per-cent increase of the C bed inferred resources that were reported Jan. 8, 2011.

The website shows the TROY mine as having 12.7 million ozs of silver reserves along with 98.7 million lbs of copper.

I think what many are missing there, is that TROY also has huge meas and ind and inferred, listed as 97.6 million ozs silver and 842.6 million lbs of copper over and above reserves.

I cannot find a profitable miner with those kind of resources trading under a 200 million $ market cap. When you add in the huge upside from a good decision from the courts at Rock Creek, RVM becomes a huge nobrainer.

Latest guidance from the company was that production was much improved this Q and they are up to over 4200 tons per day  at TROY and have accessed the richer ore in the C-bed. The quarter that will be announced in august will open some eyes. Whisper numbers are near .20 a share in quarterly  earnings, which really shouldnt come as much of a surprise as silver has averaged well over 36$ an oz US for the Q that began April 1. Even with the hedge on silver and copper for the remainder of 2011 we will likely see about .75 in earnings for the year, if silver/copper prices stay firm here  and their guidance of annual production - 1.3 million ozs silver and 11 million lbs of copper is close.

"John Shanahan, president and chief executive officer, noted: "We are extremely pleased with our progress at the Troy mine. Production levels have returned to plan (April, 2011, at 3,826 tons per day; May, 2011, at 4,207 tons per day) and continued exploration successes in the Lower Revett, particularly in the C bed area, has identified significant resource expansion. We now look forward to entering into what we hope is the last stage of litigation on Rock Creek. "

The fact that the oral arguments for Rock Creek got moved up to July is a step in the right direction, and i believe the Montana legislators want the sustainable employment and tax benefits of rock creek , especially in the current US jobless environment.

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Revett is one of the core

Revett is one of the core miners in my portfolio. Holding and not flipping or selling. Would love to add more at these prices because like many of you, I see great upside potential for this one.

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By the way ..this is one that

By the way ..this is one that ScottJ posted much about on the old blogspot site. ..Has anyone seen him around the new blog? I hope he is doing well and will/can join us. He always had great insights to share re: Revett and so much else.

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Selling puts......

Ginger, have you ever considered selling puts on Revett?  Say you sell the $2.50 puts, you collect the premium, and if Revett happens to go that low then you end up owning it at that price, plus still pocket the premium for the puts.  I'm focusing more on Alto Ventures and Malbex right now, but if Revett starts to drop, I might consider doing this, the best possible time to sell puts is when a stock is in a trough, if you can time it.

I've also been looking around for Scott, haven't seen him.  I hope this doesn't sound immodest, but he told me I was the one who sold him on Revett - @ the Kitco forums.

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Rock Creek

I own shares of RVM as well, but Rock Creek will never be mined. Trying to get approval in the US is a joke. Yes, it would provide jobs and tax revenue, but tell that to the lawyers and others who will tie this project up for years. We don't get stuff done in this country, we have too many suits involved in everything.  Look at PLM Polymet- one of the best deposits on earth, still no mining.

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New legislation means no court holdups......

zman wrote:

I own shares of RVM as well, but Rock Creek will never be mined. Trying to get approval in the US is a joke. Yes, it would provide jobs and tax revenue, but tell that to the lawyers and others who will tie this project up for years. We don't get stuff done in this country, we have too many suits involved in everything.  Look at PLM Polymet- one of the best deposits on earth, still no mining.

It's been approved, the permits just have to be modified.  Before it could get held up in the courts, but if you read my OP you'll see that now the project can actually move forward if there is any further litigation after the new permits are revised.

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Yes , Rock Creek will get

Yes , Rock Creek will get developed. The senate passed laws saying a MEPA review can no longer hold up a project.

AND really this project every bit as benign as the Troy mine they are currently producing from. The locals who were against the project were incensed , and even went as far as to suggest bribery .....when the senate posted the new laws.

RVM bought up the royalty , they know the litigation coming to an end.

Here is the breakdown of those bills recently passed in the US senate. It looks very positive for RVM and the Rock Creek project, as it appears to put a stop to the endless legal challenges brought on by the small group protesting the development of a mine.

Environmental, mining bills passed by Senate

HELENA -- The state Senate on Wednesday endorsed four bills to narrow Montana's environmental laws on mining and other projects. Here's a summary of the bills:

Senate Bill 317: Sponsored by Sen. Chas Vincent, R-Libby, the bill substantially rewrites the Montana Environmental Policy Act (MEPA), narrowing its scope and inserting language that extols natural-resource development and its economic benefits. MEPA is the state's signature environmental law that requires the state to review any major action, such as a mine permit, for its environmental impacts. The Senate endorsed SB317 on a 27-23 vote, with all but one Republican -- Sen. Ryan Zinke, R-Whitefish -- voting for it. All Democrats opposed it.

SB233: Sponsored by Sen. Jim Keane, D-Butte, this bill also amends MEPA. It restricts what a MEPA review can consider and says a court can't stop a project while a lawsuit challenges the adequacy of a MEPA review. The Senate voted 30-20 for the bill. Keane and fellow Democratic Sens. Steve Gallus of Butte, Brad Hamlett of Cascade and Gene Vuckovich of Anaconda joined 26 Republicans in favor. Zinke voted against it.

SB306: Sponsored by Sen. Terry Murphy, R-Cardwell, the bill amends the 1998 ban on open-pit, cyanide heap-leach gold mines by saying new mines can process their ore at the two existing mines in Montana, which were exempted from the ban. The Senate voted 29-21 for the bill. Gallus, Vuckovich and Keane joined 26 Republicans in favor; Zinke voted against it.

SB312: Sponsored by Vincent, the bill revises Montana's metal-mine regulations, attempting to streamline the permitting process. The Senate voted 32-18 for the bill. Four Democrats joined all 28 Senate Republicans in favor.

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Hey zman I like Polymet too.

Hey zman I like Polymet too.

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environmental opposition@Revett is well organized,not going away

you folks do recall the spotted owl?  honestly,  Obama administration needs to keep some environmental credibility.  can't see the federal agencies working to help destroy the water. way more important than the animals that would be potentially displaced.

http://www.rockcreekalliance.org/pdf/RockCreekMyths_Maest.pdf

http://www.clarkfork.org/?option=com_wordpress&Itemid=202/?author=62

FEDERAL and STATE approvals needed for this project.  Doesn't matter if state gooses its legislation.  You still have to deal with the feds. 

Montana governor vetoed SB 306.  SB 317 Died in Standing Committee - no doubt died with the boots on.

BOTTOM LINE: the lawsuits and regulatory appeals are going to keep coming. do not misunderestimate environmentalists in america. Otis Gold, American Manganese, Canadian Zinc  will be in production before Rock Creek.  There are better hassle free mining  investments out there. 

Note: I happily own American Manganese and Canadian Zinc.

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They may be well- organized

They may be well- organized and not going away, but they really dont have a leg to stand on, every envirnomental challenge has been addressed by Revett and thrown out of court. It is a benign project , and propaganda distributed by the treehuggers  should really be viewed with a grain of salt.

RVM operates the TROY mine in Montana near Rock Creek  , and these same environmentalists tried to find something wrong with the way that mine has operated and couldnt. RVM is squeaky clean, and likely the greenest mine operator in the United States.

The mining plan for Rock Creek leaves a small footprint , it is an underground room and pillar , not a huge open pit. The waters discharged will be drinking water  standards. The ore will processed off site, so no deadly refining chemicals will be used at Rock Creek. be careful with the disinformation distributed by those with the agenda at keeping this mine from happening.

Oral arguments will be heard in court in JULY, lets see what transpires.

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Rock Creek

Fact of the matter is Rock Creek is years away from production, and is really a wildcard  in RVM. The current valuation,  even if based  solely  on the  Troy mine, should be much higher.

I dont see all that risk many keep spouting off about with RVM. It is a profitable operating mine already with several years of production ahead. When next Q is announced RVM will likley be trading well below 8x forward earnings.

If you are not a bull on silver and copper and think prices will tank, then there is no reason to be in this play.

I  still believe we see 50$ silver this fall.

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