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American Silver - A Long-Term Call Option on Silver
http://www.321gold.com/editorials/jones/jones021904.html
Phil Jones
Posted February 19, 2004
If you are reading this, then there is no need to go over the repeated statements made by others who share the same beliefs as we do concerning the U.S. economy, and the burgeoning fiscal deficits and federal and private debt that eventually will "consume" the American way of life. I'll be more than happy to let others analyze, review, and repeat the horrific numbers generated by our local, state, and national governments until their very words become more painful to swallow than the actual figures.
We all know we're in deep to ourselves and to others, and we all know what we need to do to avoid the very painful future in store for most of our neighbors. As with most other writers and self-styled "analyst", my belief is to have a staple of gold and silver investments, including physical bullion and precious metal mining stocks. One of those stocks that has yet to get any attention, and I'm not quite sure why, is American Silver Mining Company (ASLM on the pinksheets). American Silver is one of a handful of the old Silver Valley mining companies that shuttered during the 20-year bear market in silver and gold prices. Fortunately enough, the current President had the foresight to keep the Company dormant, and free of debt, for the last 10 years, waiting for a renewed bull market in silver to continue exploratory work.
Before I get into American Silver, the company, a little history and synopsis on the Coeur d'Alene Mining District (C d'A), where ASLM is located. As most mining investors know, another small (not so small anymore) silver mining company called Sterling Mining (SRLM) has made tremendous gains both industry wise and market cap wise recently with its astounding news where it gained control over the old Sunshine Mines with millions of ounces of silver reserves and $75 million dollars worth of operating equipment for $5 million. SRLM currently has roughly 10 million shares outstanding and a stock price of $12 per share. That's a $120 million market cap for SRLM. It looks like the market is pricing SRLM at around $45 million for the silver in its ground, with the rest as the value of its equipment. I am being very general here.
Another silver producer, Coeur d'Alene Mines Corp (CDE) also has two major mining shafts in the Silver Valley District, the Coeur Mine, and the Galena Mine. I'm sure you all have heard of CDE before, the largest silver producer in the world, so I won't go into details regarding this company and its BILLION-dollar market cap. So why am I discussing the current largest silver producer, and the old Sunshine Mine, which was the previous largest silver producer in the world, at over 360 million ounces mined over the last 50+ years??? Well, take a good look at American Silver's geographical location, and take a look at where the Galena and Coeur Mines, and the old Sunshine Mine are located, and then you'll start to get a picture of what I'm getting at. ASLM has roughly 320 acres immediately between the old Sunshine Mine and the Coeur and Galena Mines, all four of which sit on what is/was called the Wire Silver Vein that runs through the C d'A District in Idaho! This multi-mile vein (six to be exact), and measured at over _ mile wide, yields some 1000 ounces of silver per ton in certain locations. The old Sunshine Mine, which has already seen some 350 million ounces produced, sits west of American Silver's 21 lode mining claims, with Galena and Coeur due east of it. CDE's website claims a 26 million ounce reserve for the two mines they own, which I believe are super conservative as the Sunshine keeps producing beyond it's original estimates.
Now back to ASLM. ASLM is not SRLM, with $75 million in operating equipment and mining claims that cover 10 square miles (But most of it's acreage is not on the famous Silver Vein, with the only the Sunshine Mine located there). ASLM is smaller geographically, but ALL of its claims sit exactly on the Wire Silver Vein. During the silver bear market, CDE drilled several down-holes from the surface of American Silver's property and found the same favorable host rocks as those containing commercial silver deposits in the Coeur, Galena, and Sunshine Mines. This does not necessarily equate to massive silver deposits at the ASLM mines, and there is no way to know until further drill samples are completed, but odds are very favorable that this un-mined region is comparable to what CDE and Sunshine have seen in the past, in and around the Silver Valley.
The Company. ASLM has zero debt, and less than 2.9 million shares issued and outstanding. At a current price of $1.15 per share, up from a low of 14 cents, the market cap of this company is still only $3.4 million, as opposed to SRLM at $120 million. Again, ASLM doesn't have $75 million in operating assets, but it does have something I believe is more valuable: A 20- year lease agreement with CDE that provides for a net profit sharing arrangement highly favorable to ASLM. CDE basically will give 20% net profit royalties to ASLM on all silver mined on American Silver's properties. Should silver prices reach $16.50 an ounce or above, the profit sharing goes to 40%. My belief is that silver prices will exceed $16.50 by 2005 and test $50 an ounce within this decade. American Silver also receives 11% net profits from properties south of ASLM, which are owned by CDE. Now comes the really good part; CDE basically mines all the ore for ASLM, at CDE's costs and expense. ASLM does not need to lift another finger to profit from a rising silver price for the next 13 years (Remaining time on lease agreement-see below). That means no dilution of its shares, and no risk in the cost of drilling and exploration, refining ore and smelting. Absolutely nothing, except the costs to calculate how much money is being made and what to pay out in dividends to shareholders. CDE has agreed to spend at least $100,000.00 for exploratory purpose on ASLM property every five years for a 20-year period that began in 1997. CDE, during depressed silver prices, came extremely close to bankruptcy and shelved many exploration plans on all its properties. Due to better financial conditions, CDE intends to reevaluate many of its properties for significant silver deposits, including the mines in the Silver Valley (For more information on CDE and its recent developments, go to www.coeur.com).
If silver prices don't rise, then ASLM spends no money on upkeep for property, plant and equipment. That means no dilution, no expenses, and not much possibility of bankruptcy or financial distress. This ugly situation is prevalent for most mining companies that wait for rising precious metal prices while sitting on millions of dollars of plant and equipment that costs money to upkeep and maintain. That was the case for Sunshine, and almost for CDE itself. American Silver does not have this problem. ASLM is basically a super long-term call option on the price of silver. The only inherent risk investors will be taking are silver prices going down, and/or ASLM not having any silver in the ground, which would be quite impossible if you look at the geographical location of the claims. Plus, would CDE actually agree to such a lease deal if they believed there is NO silver on American Silver's property? Not impossible, but highly doubtful they would. CDE can spend their $500,000.00 on ASLM property and not mine an ounce of ore if they wish to in the next 13 years. But that would not detract from the intrinsic value of the property and the silver that lies within. In fact, if CDE were to buy out the lease, I doubt ASLM will have any difficulty shopping itself out again for even more favorable terms to say, SRLM or SSRI. That, however, is looking too far ahead.
If you are reading this, then I believe we are in agreement when I say that silver prices are headed much, much higher. I won't go into the fundamentals of silver prices, as there are much better sources to get such information. Below is a map of ASLM and its surrounding mines; call the Company to get an information packet. My advice is to not believe what you have read in this article, and call the company. Talk to E. Wafford Conrad, Jr., President of ASLM, and ask him for the details. Do your own research, and you will most likely come to the same conclusions I have. Remember, the old Sunshine Mine which is only 1500 feet west of ASLM, produced over 350 million ounces of silver. At a little over $3 million market cap, I believe ASLM is extremely undervalued. So what do I believe the Company is worth now, with silver at $6.50 an ounce? For just the call value of silver in the ground alone, I believe ASLM is worth $8 to $10 per share, NOW. With Sunshine putting out 350 million ounces, and with Galena and Coeur having conservative estimates of 20 million ounces remaining, ASLM could easily have 20 million ounces, with much more possible (ASLM is still in the exploratory stage and no reserve or resource numbers are available). A low estimate of 20 million ounces would yield 6.7 ounces of silver per share or 17 cents an ounce at today's stock price of $1.15. If ASLM should reach $10 per share, that would give ASLM a still tiny $30 million market cap. With those numbers, ASLM would still barely equal _ of Sterling's, and 1/15th of Silver Standard Resource's (SSRI) market caps. ASLM hit $7 per share twice back in the early 80s before any drilling was completed and the true depth of silver deposits were estimated, and before the lease agreement was signed with CDE. I believe that price level can easily be surpassed now that we know much more about the property. Plus, there is a lot less silver available in today's world than 20 years ago. As an added bonus, the property is believed to have large copper deposits estimated from previous samplings.
What happens after all the silver from the Sunshine, Galena, and Coeur Mines are mined and depleted? Exactly, they will have all available infrastructure nearby to mine one of the last great C d'A properties in the area. Remember; value ASLM as a long-term, perpetual call option on the price of silver; a 13-year call option.
www.bigcharts.com
Technically speaking, ASLM has broken above multi-year resistance at $1, and is now finding support in the same area. I believe this basing action portends much higher prices as silver continues its bull market advance.
American Silver Mining Co.
2503 E. 17th Avenue, Spokane, WA 99223-5124 (509) 534-7277
Disclaimer: I was not nor will I be, paid or reimbursed by ASLM or any third party to write this article. I, however, do own shares of this stock purchased on the open market, and reserve the right to buy and sell as I so see fit. I am not advising anyone to purchase this stock, and believe that the information obtained from sources in this article is reliable and accurate. ASLM is traded on the pinksheets and is considered to be highly risky, with low liquidity and wide spreads. Please do your own research and trade or not trade, accordingly. Quotes can be obtained at www.pinksheets.com.
Copyright © Phil Jones 2/14/2004
All Rights Reserved. You may reproduce this article in part or in whole as long as you give credit to the author and his sources.
____________
321gold Inc
This is general information and I would like to let everyone know that the DNAP board does not allow for disruptive posters. It is not our intent to delete posts on the board as long as they follow Ihub's tos for stock boards. If a poster continues to disrupt the board, their posts will be forwarded to Ihub for review! None of us wants another RB chaotic board!!!!
IVRT
OT: I tried to follow Lowell, but I could not keep up with him!
SS, if you start s101 training video tomorrow, you may have to change your board name! lol
IVRT
Stocky is a hard act to follow!eom
Too much!!!! OMGROFLMAO! eom
I think Dr. K was under contract or had to give notice at UT, before he could go to work for DNAP. That took about six months to happen! imo
IVRT
Here is post 77:
This is the best article on DNAP that I have ever read... excellent overview
of the company and it's business model.
PERSONALIZED MEDICINE NO LONGER SCIENCE FICTION
DNAPrint genomics (Pink Sheets: DNAP), a cutting-edge, genomics company based in Sarasota, Florida, is working to revolutionize the way medicine is practiced by offering clinicians the ability to ¡§customize¡¨ the way they prescribe drugs.
Imagine being diagnosed with a disease. Your doctor recommends prescription drug therapy, of which there are several choices on the market. But which one is best for you? Doctors know that you could experience different side effects to any one of the prescription medications. But currently prescription drugs are tested on general population groups, making drug reactivity on individuals highly speculative.
Basically, you¡¦re a human guinea pig. You are put on a new prescription drug, and often are required to return one month later for a follow up blood test to make sure the new drug has not damaged your liver. For example: it is no secret that your liver could be damaged by the use, misuse or overuse of certain pharmaceutical products, and this is significant because the quality of your liver function and the state of health of your liver affects every biological healing process, and will adversely promote the advancement of disease if over-challenged or damaged.
However, if your doctor practices ¡§personalized medicine,¡¨ he/she simply logs onto a secure internet database to compare your DNA profile (obtained non-invasively in the doctor¡¦s office with a cotton swab of the cells on the inside of your cheek) to a ¡§recognized pattern¡¨ of drug interactivity, with the increased likelihood that the individual will have a positive response to the drugs being prescribed with less side effects and less damage to the liver.
¡§Personalized medicine¡¨ will allow doctors to subscribe to a service, via the internet, which offers the ability to match an individual¡¦s genetic make-up to a recognized genetic pattern that is shared by individuals with a certain disease. DNAPrint genomics expects to be the first company to offer this service to pharmaceutical companies and doctors.
They are doing this by building their own database, called the Phenome„§ database. Unlike the public or government genome database that comes from healthy donors, the PhenomeTM database focuses on many of the most ¡§important¡¨ human drug metabolism and disease genes whose function is compromised in certain individuals who show drug side-effects or neoplastic disease (abnormal tissue growth).
By focusing on these several hundred ¡§important¡¨ human genes as opposed to the entire human genome (over 100,000 genes), DNAPrint genomics is developing a database that contains more high-quality, usable genetic material than that which is in the public database. This will allow DNAPrint genomics the ability to execute targeted scanning searches, as an alternative to systematic genome-wide scanning. Not only will this enable the company to conduct detailed studies, it will allow them to begin their studies well in advance of those organizations awaiting the completion of the public database.
The PhenomeTM database recently recorded its 2000th entry, and is scheduled to add its 5000th entry later this year. DNAPrint genomics is in the process of securing arrangements with clinics and hospitals to obtain the information and patient specimens needed to build the database and the associations between people with known diseases taking specific drugs.
As many of the country¡¦s 1300 biotech companies rush to produce new disease-fighting treatments using the information from the recently completed human genome project, DNAPrint genomics is focusing on the potential of existing drugs by combining their highly-concentrated genetic database and highly specialized mathematical modeling.
The system uses a variety of innovative mathematical models and programming techniques, which requires the merging of advanced mathematical algorithms, biological science, fuzzy-logic computer science and artificial intelligence techniques.
Dr. Tony Frudakis, DNAPrint genomics¡¦ CEO/Chief Scientific Officer, has hired two renowned mathematicians, Myung Ho Kim, PhD, and Venkateswarlu Kondragunta, PhD, and is in the process of hiring a third, to assemble what he calls the top bio-informatics team in the world.
¡§There are only a handful of people in the world with the abilities of our bio-informatics department,¡¨ says Dr. Frudakis, speaking of his team¡¦s ability to combine the high-level skills required to accomplish the Company¡¦s business plan.
Currently, there are only 20-30 biotech firms working in the area of ¡§personalized medicine,¡¨ and only a few that have the ability to combine the three components of mathematics, biology, and computer science. ¡§A lot of the firms have the science, but the math is missing,¡¨ says Craig Hall, Director of Corporate Analysis at Tampa Bay Financial, the venture capital firm that signed a significant funding agreement with DNAprint genomics in July, 2000.
Of the handful of firms with the mathematical ability, only DNAPrint genomics is focused solely on applying its informatics platform to real-world pharmacogenomic study.
Dr. Frudakis describes pharmacogenomics as an offshoot of pharmacogenetics, which studies a drug¡¦s reactivity using simple Mendelian genetics laws. The brand new field of pharmacogenomics is the study of a drug¡¦s reactivity using complex computations in order to find a ¡§recognized pattern.¡¨
Pharmacogenomics could have a dramatic impact on overall health care costs in the future. By having access to pharmacogenomics data, pharmaceutical companies can focus their clinical trials on segments of the population that are genetically receptive to the treatment. Experimental drugs can be targeted to individuals of a particular genetic makeup, and genetic variations shown to underlie a poor-response to a trial drug could be used as a basis for eliminating the non-responding segment of the trial population from the study. In this way, pharmaceutical companies can reduce drug trial failures and the costs associated with them.
Not only is Dr. Frudakis bringing together the top bioinformatics minds in the world, he is also assembling a top-notch Scientific Advisory Board to assist the Company in the execution of its business model. The recent addition of Jose Arena, M.D., P.H.D., and currently the Director of Translational Research at the Familial Ovarian Cancer Center, Jackson Memorial Hospital and the University of Miami in Miami, Florida, will greatly enhance the Company¡¦s reach and expertise in the field of medical genetics.
DNAPrint genomics is also amassing an impressive collection of state-of-the-art robotic tools needed to analyze and interpret this data. The company¡¦s most recent purchase, an SNPStream machine, will allow DNAprint genomics to validate their software¡¦s ability to recognize specific genetic patterns.
The company recently relocated its laboratory and offices to a much larger facility in Sarasota, Florida, to provide for growth and acquisition, and to accommodate the new equipment.
Dr. Frudakis thinks DNAPrint genomics is poised to stake a claim in the biotech industry by becoming the first company to practice human genetics on a systems-based holistic approach, using truly innovative and revolutionary ideas on how to find a genetic pattern.
The total market just for bioinformatics (the computer tools and databases genomic research depend on) could exceed $2 billion within five years, according to a recent study by Oscar Gruss & Son, Inc., an investment and merchant bank.
Written by: Amy Goddard. Amy is a freelance journalist in Dallas, TX. For story ideas: writeamy1@hotmail.com
itsonlymuni, please read post 77! This pr stated ...Dr. Tony Frudakis, DNAPrint genomics¡¦ CEO/Chief Scientific Officer, has hired two renowned mathematicians, Myung Ho Kim, PhD, and Venkateswarlu Kondragunta, PhD, and is in the process of hiring a third, to assemble what he calls the top bio-informatics team in the world... This pr was in October 2000, about five months after DNAP's r/m with Catalyst!
What's the float on Qbid?
OT: Gcbr, Check this link out! http://sportsgambling.about.com/cs/nfl/a/nfl_super_bowl.htm
OT: It was a good game! The field goal kicker had me worried! I was looking forward to overtime, but knew that the kicker would not likely miss three in a row! Fifteen wins in a row is nothing to laugh at. I think Chicago has the record of sixteen in a row? It will be interesting to see, if the patriots can extend this streak later in the year!
IVRT
DNAP original founders were Tony and his dad! They had a small DNA lab! Paternity and DNA sampling were their primary products! If I am not mistaken!
IVRT
OT: Miss Scarlet, I did, and purposely used dropper, but I failed to use quotation marks! lol A "dropper" is a drooper! You have to look at the pendulum! The more pronounce the swing the more the drop, if you know what I mean!!!!!
IVRT
OT: Can tires get "Cooper's Droppers? lol
I just read an article that said that homocysteine causes arterial inflammation. This inflammation is the causative factor in plaque formation. The treatment is vitamin B. The vitamin deficiency can be cause by an under active thyroid gland (not to mention diabetes). If this is true, DNAP should be looking at thyroid glandular problems!
IVRT
OT: I have an IRA with Prudent Bear! lol
DougS, I think those guys are fishing for a genomic company with a good platform that they can buy into or buy out! Like window shopping. Today, these genomic companies are cheap and any big pharma can/could pick a "plum" quickly!
IMHO
IVRT
OT: DougS, is it stagflation, soft depression or deep do do? I think everyone, of us here can read tea leaves. Jobs are going east, and we are left with plastic chinese products from Walmart! Heck, soon people will be making minimum wage and calling it good money! Well, at least their not calling it "good" yet. However, before this decade is up, this economy will surely shrink and debts will be paid. Probably see m3 supply fall so low that hell tries to grab it again for another hellish bubble, but the dollar and other fiat currencies will be toast by then. Then the ultimate plan will take over, and the elite will institute more play money (fiat) and call it a global currency! A terrible day, when that happens! There are other outcomes, but mine is just as plausible!
IMHO
The dow needs a parachute! Look out below!eom
A perspective! some years ago we talked, about DNAP getting rid of it's pink sheet status and developing it's platform. We pondered over DNAP's products and their usefulness in the market place. We worried that DNAP would not make it to the market place first. Many thought DNAP would never leave the development stage with a product.
Today, we see DNAP in a variety of news formats, and on the internet. Their products are becoming household names. Crime and ancestry are very popular areas, of interest for most people. I would not be surprised to hear DNAP's named mentioned on CSI or a murder suspense movie one day in the future.
IMHO
IVRT
jimmy_g, if they catch one? DNAP helped in the Baton Rouge case! It is only a matter of time; DNAP will help catch another one! That is $1000/case, and there are probable thousands of cases that DNAP can help solve. There is great potential here, for society, DNAP and it's stockholders! IMHO
IVRT
I see $$$$ (revenues for DNAP)! Great News!
I second that!!!eom
This is general information and I would like to let everyone know that the DNAP board does not allow for disruptive posters. It is not our intent to delete posts on the board as long as they follow Ihub's tos for stock boards. If a poster continues to disrupt the board, their posts will be forwarded to Ihub for review! None of us wants another RB chaotic board!!!!
IVRT
eb0783, I am sorry, but you have to be a subscriber or grandfathered in for the login to work! That is, to get rid of the ads!
IVRT
chrisbaskett, if you login, the ads will go away!
IVRT
To those who post here at ihub for free. You can email Ihub and tell them what you think about the ads! Remember, the Dnap board moderators do not control these adds!
IVRT
cosmiclifeform, I just logged off and got the same ads. Did you read the sentence at the bottom of the box. Here is the sentence: Do you want a feature-rich, ad-free iHub experience?
Click here to subscribe to iHub and get the whole thing.
Billycal, you did good. You got yourself in with grand company here at Ihub jail! Lookup Billybob, I think Billy needs a bar of soap!
IVRT
Billybaby, you should quit whining, take your jail time like a grown- up!!!
IVRT
Would somebody in jail please get billboy a new bar of soap! Billbaby is still not getting the part, about picking up the soap!
IVRT
billyboy, what is yur prob? You lost yer soap!!! lol
Did you ever see that movie about Rudolf, the red nose reindeer, where he goes to the island of Misfit Toys? These poor toys are looking for a home to take them in 'cause no one cares about them being non-conformistic toys! Well, the jailhouse inmates here remind me of those toys. The misfits (non-conformists) are upset 'cause the majority of posters did not like their "crap" in the first place! Now these misfits are asking Santa Matt to rescue them from the island of Ihub misfit jailhouse non-conformistic jugheads! Why Santa Matt would stop by this place to rescue you reprobated mind bending anarchists is beyond me! All you will do is just cause more trouble for the majority of us that asked that you be sent here in the first place! However, may be Santa Matt will pick you up and give you to some poor kid and home that needs a misfit like you! I just do not know if Santa Matt stops over Iraq or that other place?????
IVRT
Good to see you posting again Lowell. Whatever you do, make sure you leave a few dollars for the rest of us! :) lol
Have a great day, I am out of here! Later!!!!!!!
IVRT
Team, I remember stocky posting about these shares back then! Many of us had 100,000 shares or more of DNAP in August and September of 2000!
IVRT
stockhlder101, I agree. DNAP is nearing that critical time frame for FDA approval for it's products. The world will not sit on the sideline and wait! Someone else could leap to the forefront! Tony wants to be the first on the block, but he has never had the "grand capital" that was needed! Only time will tell!
IVRT
Do you remember, when we used to talk about DNAP's otc bb listing and first product that would bring in revenue?
That was three years ago!!! Time flies doesn't it? IVRT
That was great!!!!
The float is keeping the share price down. That is one thing that got you down on DNAP! The sp never moved up like it did before! I think this summer saw a good move up to 18 cents per share from around 3 or 4 cents a share! Of course DNAP is a penny stock and they have to sell shares to remain an on going business! The question is how many more shares must be spilled into the public float, before DNAP is make more money than they spend?
IVRT