[brandemarcus]

For the most part that's true, but there are a few exceptions. krltf trades for 1/2 it's cash- phoscan -fos trades a little over cash. Vegyf trades for a little under cash.
Somebody could get wealthy buying the mineral properties for nothing and running them using silver valley methods - everybody paid in shares hold the cash. With the valuations present now, even a fool like me couldn't do that badly.

[sanbrunobaby]

Good thought but doesn't seem many Canadian juniors have much money these days. Plus owners of these Silver Valley companies seem to be just holding onto the land. KPCM another example. SBUM has had a lease on their properties like ASLM and CHMN.

[brandemarcus]

That's the question I was hoping you could provide the answer to. I will try and search the 2010 court settlement that I think all 3 companies were a party to, which settled their obligations from 60 or more years ago related to past lead and zinc mining on their properties.
My point is given the state of the resource market, one could buy up these shell companies. Then one nails down the cash that some Canadian jrs are a wasting and then ties down the potential resource in potash , phosphate, uranium , copper, silver or something else until the bull move ended in 2011 begins again.

[sanbrunobaby]

Interesting discussion. To me CHMN and RVN two plays on silver but different plays. Probably a place for both in a portfolio.

In response : I see no reason to doubt 3 NI43-101 reports quote of 50 million ounces at Chester. Plus keep in mind neither Sunshine Mining or Sterling made any big effort to increase underground resources. At the Sunshine according to the NI43-101 reports and Sunshine Mining reports grades on Chester ground increased at depth. So resource could very well be much higher. Second, key target areas at Sunshine on Chester ground, i.e. bodes well for increasing Chester reserves.

Second, 20% of profits + 4% NSR is quite expensive for Sunshine, will be much more economical to buyout Chester. Remember both Sunshine and Sterling controlled Chester so wasn't such a big issue. De Motte in one of his first moves made sure of this - after he left new management lost control of Chester.

Third, no doubt RVM has leverage to silver and with narrower spread, and easier valuation, my opinion is in early stages of silver boom will go up- however they have larger float and certainly will take advantage of silver boom to raise money and issue more shares. Chester is opposite- they will benefit more in later stages of silver boom, or when Sunshine buys them out. Chester traditionally doesn't issue shares. Just my opinion CHMN will in long run on a percentage basis outperform.

As far as Rock Creek and Montanore the permitting effort has gone on for decades.

Anyway both plays on silver going up !

[sanbrunobaby]

did they go bankrupt

[brandemarcus]

Even if they have 50 million ounces (big if ) they own 20 % net profits interest and you have to wait until Sunshine covers their cost. You also own a 4% nsr but will more than 2 million oz per year be coming from the chester and I think will take more than 5 years.
Instead waiting 5 years with Chester, only 15 times the market cap gets you near term exposure to 1 million ounces with rvm at troy. I am told that rvm is further along in the permitting process than mgn. Let's assign half the market cap of rvm to rock creek so about 8 million. No value for the 2 billion pounds of copper. 8 million buys you 250 million ounces of silver - for a 100% interest not a 20% net profits interest. That's 3.2 cents per ounce.
Finally if you are new buyer of chmn versus rvm you are going to be turned off by the huge spread which right now means the price has to almost double for you to break even. I think the spread may change with renewed interest but one can't be sure of this.
Remember when this new posting began, I stated that the crash in some bigger companies had made their valuation story just as compelling as Chester and the reserves were more established.

[brandemarcus]

Well if the epa forced both these companies into bankruptcy then why does hscm still have a 74k market cap?

[sanbrunobaby]

Interesting to be sure, I think King of Pine Creel similar situation. Guess though who would one buy the company from if Joe Wallace died ?

[brandemarcus]

This off topic but in the same area. The sec stopped trading in mslm, mascot lead and zinc last year at this time. The company is assumed to be worthless despite actually owning 250 acres that they had timber sales from in 2006. This was in the area of the valley with more lead and zinc and less silver than other areas. That would be to the west of the Bunker hill complex. Now in 2010, the government and the Indian tribe accepted a settlement for environmental claims for 50k from Mascot. The government also went to the trouble of putting in claims for royalties in the event mining took place on that property in the future. These pink sheet companies have very little assets, but they also have very little expenses and no big liabilities. One of the reasons , the sec gave was no one responded at company to inquiries. Perhaps Joe Wallace died. There was some old info on mslm at ihub. The company also owned a small interest in New Jersey mining and has some claims in Montana. Perhaps you could buy the company for a little over the 780 dollars the company is "worth". It's still a mystery to me the event that suddenly the company was deemed to be worthless. Thanks in advance if you could find out something.

[sanbrunobaby]

Conceptually though ILDM same situation as CHMN. Sunshine must have Chester ground for long term viability. Silver Opportunity Partners has deep pockets and continued drilling following exploration plan Ray De Motte and Mike Mclean should have them well-prepared eventually for return to production.

What is strange is they have drilled in upper country which according to Sterling last filings was profitable. Hard to understand why they don't have limited production.

Different mine plan according to NI-43101 posted in that they wish to increase capacity through new mill. Unlike De Motte and Mclean less focus on work force so they may face some labor roadblocks in short term.

CHMN knows what it has and CHMN has staying power to wait for right deal. $5 a share X 5 million shares only $25 million which for 50 million ounce resource is only $.50 an once.

[sanbrunobaby]

ASLM usually does very well in tail end of silver boom. Not sure what CEO of CHMN saying . some reserves clearly in Chester claims ( according to NI43-101 maps)not subject to royalty but they are legacy reserves. Clearly though key targets for future reserves are on Chester ground, and 50 million ounce resource for stock with less than 5 million shares outstanding is a great speculation.

[brandemarcus]

Silver opportunity partners has a lot of money, but they have yet to prove themselves at mining. They are not Hecla. Ildm had large reserves but owed Hecla 33 million before benefits would flow to them via there 18 % net profits interest. This is not to blame Chmn as they have little control over what happens at Sunshine. Of course nobody has control for low base metals prices and silver which is even more crucial. Thanks for your response!

[brandemarcus]

If you will remember Bill Campbell ceo of Chester Mining told me that the reserves from the 43-101 for the chester vein are not subject to the Chester royalty. See my old post 49( I think). This was surprise to me when he said it also. Chester has a lot other interests , the best spec play in the valley might be aslm. Have you looked at them?

[sanbrunobaby]

Not sure what flooding you are referring to. Sterling lowered the water level and certainly new owners have kept the process up. Sterling lowered below 3100 level and was approaching 3700 level. Their initial production ( besides upper country) was at 2700 and 3100 level so flooding wasn't an issue. Any deep mine has to pump water out.

You make good point what review is going on about the fire that occurred. But wont go on forever. Kind of strange Sterling won National Safety Award but new owners had fire , and then last year someone died at the mine but mining is a hard business.

[sanbrunobaby]

No problem, just a discussion so we all can invest/speculate better.

All three NI43-101 reports showed (a) resources in Chester area at 51 million ounces (b) reserves a bit unclear but seemed to be 5 million ounces (c) three of underground target areas Sterling projected 5 to 8 years production from high-grade Chester areas.
- so considering share count of Chester, and that Chester doesn't have to invest anything, the leverage is enormous.

Keep in mind also low share count of Chester. Probably even lower actually that are in market since company formed over 100 years ago so many shares probably lost over the years. When Chester was at $3 and $4 per share, certainly no big flood of shares hit the market.

You are right who knows production timetables. But Sunshine has a mill which Sterling put back into production under De Motte and Mclean; I assume permits still in place.

Revett though will probably have better liquidity, and may move up before Chester.

Both seem good speculations on Silver price.

[brandemarcus]

Not to make an argument but it is still unclear what Chester's resources are at the Sunshine and when production if started will be in that area?
Revett gets you exposure to one million ounces of silver and 8 million pounds of copper per year at troy with slightly higher silver prices-21-22?-forget rock creek. Who knows when the Sunshine is going to be operating again? Headlines say there was a man killed last year there so more delays as government investigates plus years of flooding to pump out. I think Sunshine will be in production before Rock Creek but who knows? Right now I like rvm much more at only 15 times the ask of chmn in market cap and possible production in months with 3$ copper or 21 dollar silver.

[sanbrunobaby]

Historically CHMN shows a great percentage increase when there is a real silver boom as investors/speculators look for US silver plays.

As far as Revett, like Mines Management they have had permitting issue for years, even decades. I think you are right both would go up with positive silver prices. I guess what I like about CHMN is story is simple and management keeps costs down to almost nothing waiting for the time buyout happens. They have silver reserves and resources, for which they have no holding costs- and for which America's richest silver mine must have for long term production plans. So if I have to hold for 1,3 or even 5 years, which would give better percentage return ?

This is even more compelling than before. Sterling's production plan was 5 million ounces a year, new group want to expand to 8 million ounces. So they need Chester !!!

I recall Chester had other assets as well. So a market cap of under $700,000 is a steal.

[brandemarcus]

Perhaps you are right but if silver gets to even 30, rvm will be back above
3. Then I will have to over pay the market maker to get chmn at 60 cents.

[sanbrunobaby]

Who knows when CHMN will turnaround but it will. The future of Sunshine Mine at deeper levels is on Chester claims , so at some point they will buy Chester. Same thing happened with IDLM which Hecla had to buy out at over $10 a share ! Sunshine owners have deep pockets. Remember De Motte got mine up and running, and opened up the tunnels in the upper country with ore no one had access to for decades - so Sunshine at right moment will be up and running again ! But who knows when. Gossip is that Sunshine owners want to do massive IPO when silver back at $40 an ounce and not before

IMO Chester will be bought out at $10 to $15 a share one day.

[bigone]

Oil will turn around someday. When that is; 5 days, 5 weeks, 5 months...???

[brandemarcus]

Your guess is probably a lot better than mine at this time. Coswf is at 5 in premarket. Back in 2010 (yes oil was a lot higher-80) the Chinese Oil company paid the same for Conoco Phillip's 9% interest in Syncrude (4.6 billion) than the total enterprise value of Coswf's 36 % interest in Syncrude. Equity 480 million shares * 5 plus net debt of 1.9 billion (near 4.6 billion) buys 1.5 billion barrels of oil.

[bigone]

Sage advice.
How low will they go?

[brandemarcus]

ot- Two other disasters I am recently involved with:

krltf- Potash prospect where the company trades for 55% of their cash in the bank. Npv of the project at $400 potash is 2 billion but potash is below that price now.

coswf- Canadian oil sands trust just cut their dividend to almost nothing. I think the price of 5.5 down from 22 already reflects that but I thought that at 2 dollars higher. I will be averaging down today into the widely predicted blood bath.

Bigone please be careful, if these disasters continue I will stop posting on Ihub as I am clearly out of step with reality.

Good luck in you investments!

[bigone]

Very interesting. Thank you.

[brandemarcus]

I will give you an example. Keep in mind you have to pay .22 cents for chmn so implied value is 1 million.
Here is an opportunity that I have been wrong on for along time but now represents even better value. For 14.5 million implied value you can buy stock in revett minerals. Company dropped 40% in value just recently when they postponed resumption of mining activities at Troy( because of low copper prices) which produced 1 million ounces silver per year plus 8 billion pounds of copper. Someday before 2030, they might have rock creek running which has 250 million pounds of silver and 2 billion pounds of copper. That might actually happen before the sunshine gets back in production. Of course Chester has no ability to change the lack of progress at Sunshine and Chester runs a tight ship and will survive a bear market better than Revett. Still I don't think Silver Wheaton that owns 16 % of Revett will allow management to totally destroy their investment but who really knows? Finally keep in mind that mines management next door to Rock Creek is valued by the market slightly more than Revett and they don't have the small mine in addition that Revett has.

[bigone]

I agree with you.
We are well diversified in other areas as well as the resource sector with eyes open to other opportunities.
Appreciate your input.

[brandemarcus]

With the disaster in the resource sector since 2013, there appear to be so many other more visible opportunities. Many of them have a much narrower bid ask spread. When the more well known opportunities have moved, perhaps it will be time to check in here.

[bigone]

Anything new with Chester Mining since your last update many months ago?

[sanbrunobaby]

bismark I think a fair distance. the chester ground i guess if you try to correlate the maps in the NI43-101 report you could identify which falls within Chester ground, and which Chester may claim APEX rights. You would probably have quite a chore going through block by block of reserves to establish which is on Chester ground and which isnt.

Ball park if Chester 50 million ounce resource,and contains key deep targets, then question how much of current legacy reserves on Chester ground-I would be surprised if less than 5 million ounces.

[brandemarcus]

Can we interpret anything about how far chester nsr ground is from the reserve area from the simple diagram at the top of the board. This is from chester's own web site so why wouldn't it be accurate. At the risk of saying something foolish how far is the bismark area from west chance?

[sanbrunobaby]

If you look at the NI43-101 reports posted on sedar, both the 06/19/07 report posted under Sterling,and the 12/27/2012 under Sunshine Silver, they both make the same comment- the Sunshine consistently converted to resources to reserves for over 100 years.Being an underground mine, usually due to cost involved mine would only target developing 5 to 7 years reserves at any one time. Note that Sunshine Silver continued using Stelring's exploration plans, and apparently has increased the resources another 25 million ounces.

Sunshine Silver projected a life of mine cost of $14 an ounce ( higher than Sterling's). I note specifically for Chester vein area high grade silver, 22 to 32 oz silver per ton.

As far as Hecla Mining's decision to sell Consil remember the 90's had low silver prcies, and Hecla was battling EPA to survive at that time.

I note some former Sterling employees with sub penny start up First Colombia Gold.

[brandemarcus]

1. The only thing I would say is are there enough drilling results to classify anything in the deep chester as reserves. It sounds like Sunshine thought they would find something but ran out of money in 2000. This might be the same for Sterling in 2006-2007. I'm sure you know how much more difficult it is for underground mines to satisfy sufficient drilling to classify material as reserves.


2. We know in the past material was mined from property subject to chester nsr in the 1960's. You can find lots of old newspaper articles about the chester areas going back to the 1930's! In some cases I thought they have been mining from the east using the consolidated silver shaft. Even though Sunshine thought there was some more silver there, Hecla was willing to sell in 1995 for some mexican properties in exchange.

3. my computer at home may have an allergy to I-hub. I may post a test post on the yahoo chmn site. Thanks for the 6 week discussion and I will check back on a different computer once a week.

[sanbrunobaby]

Guess somehwere on internet there must be the old sterling powerpoints showing the high grades in the deeper Chester areas. There is the Sterling NI43-101 report on sedar.com. Many maps there.

The west chance ore body still had some fully developed stopes when mine shut down. Sterling drilled a few holes outside even the area of the inferred resources, and immediately hit ore-grade material. De Motte authorized Mclean to immediately to develop those areas,mining as they went, which Mclean was doing when management changed in May 2008. Sterling was only a few stopes away from positive cash flow from underground, and already cash flow positive from upper areas, when management abruptly changed.

Chester area very very very key to the mine, De Motte and Cambell both realized that and established good working relationship from what people say. ( De Motte also had very close relationship with Bob Hopper of the Bunker Hill, and Harry Magnuson).New management though in May 2008 (Voorhees and Meek) disrupted these relationships leading to Sterling losing major influence on Chester.

Looking at the ILDM example CHMN doesnt need to do anything except make noise at the right time for Sunshine Silver to wake up and come running.CHMN has certainly a lower float than ILDM had.

[sanbrunobaby]

Thanks for information.

Yes the 7% royalty quite clear;y applies only to claims Sunshine Mining owned. I cant imagine that none of the reserves are on Chester ground and even less even if just APEX rights the Chester vein resources are not related to Chester ground.

However the main investment thesis remains- Chester owns a key part of what is necessary for the Sunshine to become a long term producer. At some point Chester receives cash from production, or is bought out. With only 5 million shares outstanding, and I assume a very very low public float ( I think under 600,000 shares), this is a medium to long term winner. Probably the best speculation in the industry if one has patience, IMO.

[brandemarcus]

Chester update part three :

1. Chester first declared dividends on October 27, 1964 and the 20th and last dividend was in 1970. Hecla at that time owned 52% of the company as it was part operator from the con silver shaft.

2. Sunshine's mine 1999&2000 annual reports talk about depletion of the ore body at west chance and the possible new areas to replace it in the eastern section of the mine. They talk about exploring the eastern part of the 101 vein, Yankee girl vein, and the Chester vein towards the consolidated silver shaft.

3. These were interesting plans, but since the mine was closed by early 2001 one can guess not much of #2 was done. I think for now, all sterling and sunshine silver mines provided to the 43-101 is old Sunshine Mines records where nothing can really be established in resrerves where the Chester nsr applies.

4. Only indication one might get is from the 1999 report talking about the good hope area of 8300 tons at 29 0z per ton. This is total speculation on my part as to whether the Chester nsr applies to the good hope area.

5. I also forgot to note that Chester retains 1.5% nsr on the Idaho cobalt property in addition to the shares in Independence resources.

6. Finally, San Bruno if you talk with Bill you might want to get clarification on apex rights which were decided by agreements made in 1943.

[brandemarcus]

Chester update part three :

1. Chester first declared dividends on October 27, 1964 and the 20th and last dividend was in 1970. Hecla at that time owned 52% of the company as it was part operator from the con silver shaft.

2. Sunshine's mine 1999&2000 annual reports talk about depletion of the ore body at west chance and the possible new areas to replace it in the eastern section of the mine. They talk about exploring the eastern part of the 101 vein, Yankee girl vein, and the Chester vein towards the consolidated silver shaft.

3. These were interesting plans, but since the mine was closed by early 2001 one can guess not much of #2 was done. I think for now, all sterling and sunshine silver mines provided to the 43-101 is old Sunshine Mines records where nothing can really be established in resrves where the Chester nsr applies.

4. Only indication one might get is from the 1999 report talking about the good hope area of 8300 tons at 29 0z per ton. This is total speculation on my part as to whether the Chester nsr applies to the good hope area.

5. I also forgot to note that Chester retains 1.5% nsr on the Idaho cobalt property in addition to the shares in Independence resources.

6. Finally, San Bruno if you talk with Bill you might want to get clarification on apex rights which were decided by agreements made in 1943.

[brandemarcus]

One thing bill told me is that some old sterling documents (maybe some you referred to) are probably better sources of info about areas subject to the chester vein than the new 43-101 from sunshine silver. perhaps you could create a link.

[brandemarcus]

Chester update part 2:

1. Chester also does not own directly a 3% nsr on the new departure project. It owns a 34% interest in Lucky Friday extension mines which owns the 3% nsr on new departure.


2. It does own directly a 3% nsr on the conjecture property which is supposed to be in production soon with 700k ounces produced.

3 Chester and Lfex both own 500k of black mountain resources and hold rights to an additional 500k each of black mountain resources if production is achieved.

4. Chester also owns 2.85 million shares of independence resources valued at 285k.

5. Chester owns some nsr's on ground to the east and north of the lucky Friday mine.


6. I would encourage you (san Bruno) to call the 800 number at the chester web site rather than relying on a third party for info. I probably have misinterpreted some of the information I was given so you maybe a more reliable source if you talk with Bill Campbell.

7. I have not included a few gold mining properties that Chester owns interests in but again anyone can call Bill and get reliable info on exactly what Chester owns.

8. I think it's reassuring to know that ceo is concerned that mis-information which inflates the value of his company is presented on the internet.


9. I hope I have presented an accurate picture of the situation. If I have blown it, than hopefully San Bruno you will do a better job of gaining Mr. Campbell's confidence.

[brandemarcus]

1. I was actually wondering not for chester but for an individual as an example after ildm takeover aslm spiked a bit but quickly calmed down.

2. I had a talk with Bill Campbell today and we both have some misconceptions about the nature of the company.

3. Noneof the reserves associated with the chester vein in the 43-101 report are subject to the 4% nsr or the 20% net profits interest. These reserves are part of the sunshine mine and not subject to the chester royalty.

4. This is not to say that the chester vein does not extend onto property subject to the nsr and net profits interest but no reserves for that area have been published in a 43-101. I believe but am not certain the chester nsr covers area to the east of the area marked chester vein and to the west silver summit shaft.

5. This area has been mined way in the past (40-50 years ago) and was the source of very high grade silver and that was when chester paid dividends.

6. These areas are also not subject to the 7% nsr that the rest of the sunshine mine is subject to which goes for epa cleanup and to compensate the Coeur d'Alene Indian tribe.

7 One can only infer about the prospects for this ground from the fact that Sunshine owned 51% or more chester and Sterling also held quite bit back in 2007.

[sanbrunobaby]

Answer to 3 questions

Sterling Tunnel was just built by De Motte and Mclean starting from plans developed in 2005, and completed by 2007.Over 5000 feet !

On rolling up ASLM and SBUM that would probably require an s1 registration statement, hard to imagine CHMN paying for that, they keep their expenses down !

Dividends, who knows what plicy of current management would be, but paying a steady dividend would certainly help boost price of stock. Also I have heard, helps to clear shorts out of market for this type of stock , though I doubt many pople would be gutsy enough to try to short this stock

[brandemarcus]

1. My point is it seems given how much production was from chester there would be more frequent dividends in the historical record.

2. I forgot whether 11-12 was the cash cost or full cost in the production estimate? I think it was cash cost?

3. Was the sterling tunnel in relatively good condition compared to other areas of the mine?

4. In the event Sunshine bids 10 for chester how cheap do you think we will be able to roll into aslm and sbum?


5. Off topic- Imagine this merged company usa silver, axu=alexco, rvm -revett minerals, sunshine silver, atna resources, mines managemt-mgn, vista gold-vgz- use all excess cash to get rid of any debt - consolidate g & adm expenses promotion etc. YES a lot of un- economic property at current prices but a cheap perpetual call options at no cost.

[sanbrunobaby]

Chster could pay dividends simply because that was where Sunshine was mining from.Hard to forecast how many ounces would come from production form Chester areas without revised mine plan,but 1.5 million ounces as good a forecast as any.

USA Silver certainly has potential, just with Sunshine's higher grades and very consistent- when exploration continued- conversion of resources to reserves it seems better poetntial for the future.Hecla just hasnt been as agressive as one might have hoped in going after USA Silver.

Also, big change is the Sterling tunnel built by De Motte and Mclean to access upper country areas that hadnt been explored for many decades. Thi sis a wild card to additional potential at the Sunshine.

California not a great place to mine, but very few Cobalt deposits in the world so for long term a reasonable speculation.Inpdendence Resource guys seem very experienced in mien finance, if market turns in 2014 it could do well.