Silvermex Resources (SLX.TO)

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silvernomics
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Silvermex Resources (SLX.TO)

Silvermex was formed last year out of Genco and old Silvermex.

This is a good interview with the old CEO of Genco:

http://seekingalpha.com/instablog/503905-marco-g/97873-bonanza-aztec-silver-interview-with-with-genco-in-merger-with-silvermex-ggcrf-tsx-ggc

Genco used to be a peer of First Majestic, until they had terrible problems with the board and there was a strike and blockade at the mine. The major shareholder had to come in and boot the old board out. The merger was about him passing operational control to the old Silvermex people who are miners from Hecla and Silver Standard.

I was less than impressed to learn that Genco was the name of Don Corleone's front company in The Godfather. I guess that's a good indication that the old board were tossers - assuming they were responsible for naming the company.

Anyway, there's 200m inferred, production has recommenced and a whole load of exploration potential. I'm in.

Edited by admin on 11/08/2014 - 06:10
Debbie Downer
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I use to own it, sold it when

I use to own it, sold it when it became one of my laggers

silvernomics
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It will lag until they bring

It will lag until they bring out results, then confirm the consolidated upgraded resource, and get their story out.

The big lag is the green light on commissioning the 4m ounce p.a. open pit mine.

It may not race away imminently. It's one to tuck away for 2-3 years.

tofurkey
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My largest mining position,

My largest mining position, have owned it while it was Genco, most of my shares bought below 0.40.

infinite_easing
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has potential

it has not been a poor performer considering it ran to $1.09 before falling (way) back. Has interesting property in Mexico, is producing and in a QE3 world will run again.

caramel
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holding longer term as well,

holding longer term as well, the potential on this one is huge.  Mgmt is great.

major risks a) I believe this one owned by silver ETF's such as SIL - ergo, easy to keep down via daily selling and b) longer term risk of Mexico nationalizing mines 

still believe SLX will have its day in the sun and prices will rise.  At that point, I'll remain invested longer term but with an eye towards (b)

ginger
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My largest share holding..

is GGCRF. I think this one is setting up to run well (when the time is right). Hopefully, that time is coming when the overall mining market gets back on a track to green. Some days I question why I continue to believe in this one so steadfastly when other miners in my portfolio have performed better. There is something about this one though that compels me to stick it out.

Hope I'm right about what's coming for Silvermex!

infinite_easing
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Silvermex First Quarter 2011 results

just released this evening. Full report at: http://www.silvermexresources.com/s/newsreleases.asp?ReportID=462413

starts:

First Quarter 2011 Financial Highlights: 

Gross profits of $1.7 million were achieved on revenues of $3.9 million.

Positive adjusted net earnings of $86,000 and EBITDA of $545,000 were achieved.

Net losses decreased by 38% over the first quarter of 2010, to $897,000.

Total silver equivalent production was 143,128 ounces.

Sales of 90,746 ounces of silver and 1,043 ounces of gold were realized.

Average realized silver price was US$32.95 per ounce and average realized gold price was US$1,397.97.

caramel
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Operating activities used

Operating activities used cash of $3.3 million, compared with cash used of $835,000 for the same period in 2010. This was mostly due to the Company posting at $3.6 million tax bond in Mexico on a disputed tax reassessment. Excluding the tax bond, cash generated from operations was $250,000. 

they are aiming to max production by q4; they are essentially already cash flow positive; realized prices will be higher in q2;  trend is really good.  

Piece of Gold -...
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Have a feeling that it will

Have a feeling that it will take a few years for this one to get off the ground.

There is WAY too much cheap paper (warrants) that have to be cleared before share price appreciation begins:

Warrants:    
12,770,000 0.35 05/07/12
3,391,000 0.32 05/27/12
2,291,000 0.32 05/15/12
1,182,000 0.45 09/30/11
2,669,000 0.41 02/12/12
14,550,000 0.65 01/12/12
12,097,000 0.90 12/16/13
1,680,000 0.71 12/16/12
ginger
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What do you all think an

What do you all think an 'event' ..like a currency crisis or rampant inflation will do to miners like SLX? ..I am wondering as Piece of Gold said.. if it could take several more years for SLX and other juniors to really get cooking ..would a major economic crisis further stall the sp or would that be a catalyst to spur the share price upward..?

Piece of Gold -...
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Other juniors without

Other juniors without warrants will do much better than SLX if there is an "event" that launches silver prices.  Warrants act as a heavy weight upon the stock price, as owners are usually those that participated in a private placement.  Get purchased share plus a warrant.  Warrant tends to be held as lottery ticket like..... when holder decides it's time to exercise they also sell that share.  So warrant levels tend to act like magnets on the stock.  As with SLX, there are a ton of shares below current share price.  As exercise date gets closer, the warrants are off-loaded and the warrant price tends to drag the stock price closer to it.

Always be careful with high warrant stocks....especially those issued at way lower than current stock price.

Once the warrants are churned through on SLX....think it will take off.  But a couple years of flat to lower price will most likely occur for now.

Low warrant count silver stocks I like are SVM, AG and SVL.V

caramel
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thanks PofG.  I'm liking the

thanks PofG.  I'm liking the physical more and more each day :)

mouser
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Undervlaued

Silvermex is a development play and the  new management that took over in the merger has had the reins for less than a year. It will take them some time to get a handle on the huge potential at La Guitara play in Temascaltepc area in Mexico. The big positives for SLX are the huge reserves and resources already found at La Guitara, now under the guidance of the proven mine builders formerly with Hecla and Silver Standard, and the fact that they are mining already with infrastructure in.  The entire 397 sq.km concessions is  full of huge potential with 7 former historic mines, that  are all fully permitted for mining. SLX is  years ahead , and amazingly valued lower than  many explorers with less in ground resources, battling to get permits,  still years from mining.

Silvermex has an extensive review process underway to compile and analyze all past exploration results and available data into a comprehensive new resource model. This will assist the company to gain a better understanding of the existing reserves and resources. An updated resource estimate is expected later this year.

The feasability delivered by the company for La Guitara back when they were still Genco had a 3000 tpd operation suggested for the resource there. In Jan 2010 they announced a 415% increase in reserves to  47 million ounces of silver equiv, with an additional 125 + million silver equiv ounces in meas. ind and inferred.

This upgrade of the Open Pit deposit to Reserves was based on Kappes, Cassiday & Associates' ("KCA") projected processing costs of US$20.00 per tonne of ore to a proposed agitated leach, Merrill Crowe gold recovery plant at 3,000 TPD and Genco's mining costs for the open pit, developed in conjunction with a mining contractor with current operations ongoing in Mexico, and the metal recoveries summarized in the KCA Feasibility Study.

Now Silvermex new management perhaps not totally confident with that assessment of the project, and are in the process of getting a new 43-101 resource, and dont be too surprised when they announce a new plan for expansion of production.

Drilling results are on tap, and expect to hear some impressive  numbers, the average grade from mining  from the first 3 months of 2011 was more than economic at  over 6 ozs per tonne silver and 2.5 gpt gold with great recoveries of over 92 % for silver and 88 % for gold.

I have an affinity for companies that have huge resources and are already in production, and trading at low multiples to their gold and silver in ground.

Disclosure i have been long SLX, since it was Genco.

infinite_easing
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the next few months could be

the next few months could be tough on the sp, but looking out into 2012 it looks like SLX will build an even larger cash reserve for development activities, and have more processing capability put in place. It's a long hold.  

ginger
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Hat tip to mouser on SLX

Hat tip to mouser on SLX commentary. I have followed SLX (and mouser on another board) for about 6 months now. The warrant issue does (should?) bother me somewhat ..but am holding my shares for now.

JoeyJoeJoe
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Thanks

Yes, thanks Mouser for sharing your DD.  We appreciate it very much... I must be honest with you though, mouserman sounds cooler than simply mouser ;)

mouser
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As far as the warrant issue

As far as the warrant issue goes, i do believe James Anderson and his assoc.  held a big % of those cheaper ones ,  and as far as i can see , he has yet to sell a share.

In that last pp at .62 , the warrants are priced at  .90 about 9.7 million of them and the majority were taken down by Sprott. I tried to get in that PP, and they told me it was for institutional  investors only and was not open to private accredited retailers.

The warrants are certainly not as big an issue as the naked shorting that is happening in the corrupt US otcbb on GGCRF ( slx 's US symbol). So far 50 days with failure to delivers, basically these crooks sold shares they dont own and cant find any to borrow. Blows me away that the idiotic powers that be in the US would send Martha Stewart to jail for selling shares she paid good money for, but had she naked shorted  that same company , she would have been fine. It somehow is not a serious crime in the US stock markets to create shares and sell them. In any other part of society you get jailtime for selling some one else's  property ( unless you are a bank of course).

mouser
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Just to add here to the

Just to add here to the warrant discussion, most times participants who acquire warrants will sell the common shares ( after the 4 month hold) and ride the warrants. They dont exercise the warrants generally until expiry is close and the warrants are in the money. The warrant exercise however does put cash in the coffers of the company, but at the same time creates a higher outstanding share count.

I do know that in the case of Silvermex, the warrants in the money that are held by James Anderson  have not caused any selling of common shares,  i have talked to him on a few occasions as he stated clearly he has never sold a share. You can also look on sedi and check that out.

I did note that Anderson gave 300K shares as a gift to someone, i suspect his kids or wife. That was posted recently on Canadian insider. I note that some warrants also must have carried over from SMR ( Silvermex  before they were merged into GGC's Big board listing). I am not sure who holds those.

mouser
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Nice pop in SLX

With silver and gold pushing higher and SLX drill results getting close, the stock finally made a move, perhaps some naked shorties finally covering , who knows.

I managed to pick up another big chunk at .61 on monday, to add to my core holding.

GO SILVER, ( and gold too)

SLX has over a million ozs of gold in all categories as well at Temascaltepec

TheGoodDoctor
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Nice wasn't aware of the

Nice wasn't aware of the gold.

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“Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.” Norm Franz

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