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What to look for next. All of the warrants have now been exercised and the cash is in the bank. It looks like Sprott is through buying for now. The next news event for USSIF should be the announcement that USA.V is moving from the Canadian venture exchange to the main Canadian exchange. USA.V will now be USA.TO. This announcement should come in September according to the last CC. In the meantime, USSIF is still adding $100,000 per day to it's cash position every day. IMHO USSIF now has $31.9M in cash on hand. They should have $35M on September 30 and $45M on December 31.
Big institutional ownership. Someone posted on Yahoo - USSIF.PK the list of institutional owners of USSIF. I was surprised to see that 3 institutions control 75M shares of USSIF or 25% of the company. These 3 institutional owners likely are having a major say in the future of the company. Sprott Asset owned 24.4M shares(now 35M shares). Conus partners has 20.2M shares and Heartland owns 19.7M shares. Since Sprott is the only one that owns over 10% of the company they are the only one required to report insider transactions.
1,701,500 insider shares bought today. That makes a total of over 5M insider shares bought since last Monday. It now appears that Sprott owns around 36M or more shares of USSIF or 12% of the company. This only includes shares purchased on the Canadian exchange. If this keeps up tomorrow it is likely that Sprott is buying more than just the warrant shares. Sprott now owns around 36M shares or 12% of USSIF. If he buys 20% we've got to start thinking acquisition?
Sprott still buying? It looks like Sprott is still buying with the huge volume on USA.V. Once the warrant shares are gone it's off to the races.
Do we even want to go there? Do we dare think about what 3rd quarter results would be if silver is $50 on September 30? For the brave, here it is. 650,000 ounces of silver @ $50 = $32.5M plus $4.5M from repricing 2nd quarter silver plus $3M for byproducts = $40M in revenue. Profit before taxes would be $18M and after tax profits would be $13M or .04 per share. IMHO USSIF currently has $31.2M in cash on hand and is adding cash at the rate of $125,000 per day.
Sprott is switching from gold to silver. The article can be found on mineweb.com under silver news. Sprott is buying United States Silver(USSIF.PK) for .68 per share with both hands. He now owns 34M shares(11% of company) and is adding daily. USSIF just reported record revenues of $31M and earnings of $9.4M. They plan a 1/5 reverse split by yearend to gain an AMEX admission. They are opening a new mine in 2012 and production is on the rise. This is the most undervalued stock I have seen in 50 years of investing.
Sprott buys over 3M shares? It looks like Sprott has purchased more than 3M shares of USSIF this week. That takes his total holdings to at least 34M shares or 11% of outstanding shares. That takes care of half the warrant shares that were available. The big question is just how many shares does he want? Once the boat is loaded there is no longer a reason to hold the stock down.
Sprott switching from gold to silver. This article can be found on mineweb.com under preciuos metals under silver news. Sprott said on Wednesday that he is switching from gold to silver. He still likes gold, but now believes that silver will outperform gold.
If the warrant holders want to exchange their warrants for shares they must pay USSIF .35 per warrant to convert. With the recent drop in the market some of them might not have the extra cash. If they convert and sell now they make a .32 profit and receive a bunch of cash instead of paying it out. They are not actually selling shares. They are passing on an opportunity to buy more shares because they need cash. Most of the warrant holders allready own a lot of stock that they received in last year's offering. They are likely keeping those shares. This could have been bad short term for USSIF if Sprott had not stepped in and gobbled up these shares. Once all these warrants are converted USSIF will have $4M in extra cash, the threat of sales by warrant owners will be gone and Sprott will be loaded for bear.
Sprott buys 1.3M shares of USSIF? IMHO Sprott purchased more than 1.3M shares of USSIF in the last 2 days. I believe that they purchased these shares from warrant holders that didn't want to convert their warrants to shares. Sprott could have waited until these shares were dumped on the market and tried to pick them up at lower prices. It appears that Sprott doesn't think that USSIF is going lower or they would wait to buy lower. This is VERY BULLISH for USSIF. If Sprott is buying heavily at these prices they expect USSIF to take off. They are loading the boat with all they can get at these prices. After the warrant conversion Sprott will own well over 30M shares of USSIF. USSIF has traded more than 5M shares in the last two days between the U.S. and Canada.
I still think that Sprott is agressively adding. It is possible that Sprott with it's 30M plus shares influenced USSIF to call the warrants. This makes millions of new shares available to Sprott. They allready own 5.4M warrants. Sprott has had to accumulate very slowly due to the very low volume. Now millions of new shares are available. Sprott might have offered to buy all shares from warrant holders at this price level. I was told earlier this year that USSIF wasn't interested in a RS and an AMEX listing. Now all of a sudden they are. I wonder what(who) changed their mind?Sprott has a certain number of shares that they want and once they have that many it's off to the races. JMHO
Large insider buy yesterday. Someone bought 868,000 shares yesterday. It was probably Sprott and I'm guessing that they bought them from one of the warrant holders. Sprott has over 5M warrants that they will likely turn to shares. After that Sprott will own well over 30M shares of USSIF.
Sprott owns over 5M of the warrants that expire this month so I doubt that those shares will be sold. That leaves about 6M other warrants to be exercised. The volume on the Canadian exchange is very high today so some of those shares may have been sold. The CC was great. USSIF is sticking to it's 2.4-2.6M ounce production estimate which means about 650,000 ounces for quarter 3 and quarter 4. A final decision on Couer will be made in October. Production will begin six months later and full production of (500,000-600,000 ounces) will happen within 15 months. The goal for production at Galena is 2.5M-3.0M ounces in the future. Cash costs have been high because of mine repairs. The goal is $12-$13 cash costs next year. If silver is $39 on September 30 I look for revenues of $30M and profits of $11M in quarter 3.
USSIF has turned into a cash cow. Cash improved by $12M in quarter 2 and should increase much more in quarter 3. USSIF will be receiving an extra $4M in cash this month from the exercise of warrants. I now expect cash on hand to be at least $35M as of September 30. I expect cash at year end to be about $45M. Here is some great news from the report regarding drilling at the new mine: "All drill hole penetrations within the outlined resource blocks proved positive."
I am still going with 650,000 ounces sold @ $35 = $22.75M + $3M for byproducts. Total revenue $25.75M and profit before taxes of $8M. The hedge loss should be about $1.2M this quarter compared to $600,000 last quarter. I hope the 650,000 ounces sold turns out to be conservative due to the 147,000 ounces carried over from quarter 1 that didn't make it to the smelter in time. It all depends on the timing of shipments at the end of JUne. If they made it to the smelter by June 30 we could exceed 650,000 ounces. Aftertax profits don't mean anything because we aren't paying any taxes right now. The tax charge will be recovered at yearend.
I don't know why they need to raise any funds for the Couer mine. They only need $7M over a 15 month period for the Couer mine. They currently have about $21M in cash and should have $27M by the end of this month after the warrants are exercised. I heard earlier this year that they had two elevators on order to lift ore at Galena and they were due in July. I wonder if they have arrived and are operating? That may be why they are confident with their 2.4-2.6M ounce projection for 2011.
It is particularly the last opportunity to buy what I believe is the most undervalued PM stock for .58 per share. On Monday United States Silver(USSIF.PK) should report record revenues of $25M and record profits of $8M or .02 per share. The company allready announced that production was significantly higher in quarter 2. USSIF has gone from having $5M in cash on December 31 to $21M today. They should have $40M in cash by December 31, 2011. They are planning a new mine in 2012 that will add 20% to production. They are debt free and reserves are growing.
This report will be different. When USSIF reported it's 1st quarter results they reported very disappointing production for quarter 1. They reported that revenues dropped from $21M in quarter 4 to $19M in quarter 1. They reported record profits of $6M and the report was received favorably. The stock went from a low of .47 to a high of .69 a few weeks later. This report will be much better. USSIF allready announced that production was significantly higher in quarter 2. Revenues should go from $19M in quarter 1 to $25M in quarter 2 with profits of $8M. JMHO
$40M in cash on hand by December 31. IMHO USSIF will have $40M in cash on hand as of December 31. USSIF produces 9 rail cars of silver per quarter with an average of 70,000 ounces of silver per car(plus byproducts). Each car settles about 3 months later at the then current price of silver. On average a car settles every ten days. USSIF currently receives 70,000 X $38.50 plus about $300,000 in byproducts minus smelter cost for each shipment or about $3M per shipment. USSIF spends about $6M each month in cash, including capital expenditures. USSIF adds $1M to its cash position every ten days. IMHO USSIF has $21M in cash on hand right now. There are 14 more rail cars of silver to be settled by December 31. USSIF will also receive an additional $4M in cash this month from the exercising of warrants. IMHO USSIF will have $27M in cash on hand as of August 31 and $40M in cash as of December 31. That would be about .12 per share in cash compared to $5M in cash on December 31, 2010 or .015 per share.
It needs a good dose of earnings.
I just spoke to Heather in IR. She is very pleasant and willing to answer questions. She said the mine accident has not hurt production. Just a small part of the mine is closed and it may reopen today. A contract worker fell and broke his ankle. He was not wearing his safety device. They are working feverishly on the paperwork for the TSX and AMEX listings. There is a board meeting this week preceding Monday's financial results. I expect a big increase in production for quarter 2 and record revenues and profits. That was allready promised at the June 17 CC. Monday should be exciting. Heathers # is 208 752-1116 Ext 221 if you have any questions.
I hate to see so many options being granted also, but we need to consider some things. USSIF was cash strapped and issuing options vs cash bonuses was the only way to go. The number of shares that were recently sold were minimal. The recent options granted will bring in over $2M in cash if ever exercised. After the 1/5 RS only about 800,000 options were actually issued at a price of $2.65. I would like to see USSIF change next year to paying cash bonuses now that they have the cash. These options are not the problem right now. It is a lack of an AMEX listing. Once USS(AMEX) starts trading we will see several million shares traded daily(See GPL and EXK). These small amounts of options will be meaningless. We must get throught the 12M warrants that are about to be exercised. That is far more of an issue than a few warrants. Making sure no additional warrants are issued is more important than the options.
Has everyone forgotten that in less than 7 days USSIF will be reporting record earnings? Revenues should be about $25M and earnings about $8M before taxes. USSIF will suddenly go from a company that earned $10M in the last twelve months to a company that made $18M in the last twelve months. On November 15 that will change to $28M over the last twelve months. Silver revenues for quarter 2 are based on the close as of JUne 30 which was $35. With silver now above $39 we are headed toward another record in quarter 3. JMHO
Markets can get very irrational for a time, but at some point profits and cash on hand matter. At current silver prices USSIF makes about $40M per year and should end the year with $35M-$40M in cash. In 2008 silver plunged with a plunging economy. At that time the silver price was dependent on the economy and industrial usage. Today the silver price has become more dependent on the collapse of the U.S. dollar. People are buying silver as a currency rather than a commodity. If the economy tanks and oil drops then USSIF expenses may actually decrease. If silver moves higher then profit margins could increase. In 2008 USSIF was barely hanging on. Now they have a substantial war chest of cash and can continue mine improvements even with a tanking economy. Banks are now charging a fee for large cash deposites. U.S. bonds are going to be unpopular and stocks in general should tank. Where do you want to put your money? I would think silver and gold.
Over 800,000 shares traded in Canada today also so about 1.8M total shares traded. I hope some of those shares were warrant holders. Any warrant holder that wants to sell needs to get out so that won't be a problem later. Hopefully, they short now and then cover with the new shares after they send their cash in. USSIF should collect $4M this month from the warrant holders plus another $3M in cash from operations. They should have over $25M in cash by August 31. JMHO
Is it time to panic? Well lets see. USSIF should have about $25M in revenue and $8M in pretax profits for quarter 2 based on a silver close of $35 on June 30. Silver is now $38.50 or 10% higher than that. Based on todays close USSIF would have revenues of $29M and profits of $11M in quarter 3. That doesn't sound like panic time to me.
It all goes back to a TSX and AMEX listing. Look whats happening to EXK with earnings out today. The problem is that nobody ever heard of USSIF. Who's going to buy it until they've heard of it? If you look at Kitco silver and look at their list of all silver producers listed in Canada you won't even find USA.V listed. Much smaller companies are listed and U.S. Silver doesn't even show on their list. It's going to take an AMEX listing to put USSIF on the radar.
Canadian market(USA.V) is showing a bid of .59 and an ask of .59. That equals .615 on USSIF. This is probably related to the mine accident. There shouldn't be very much selling over the accident. The only negative regarding the accident would be if the inspectors come back and insist on additional safety measures. We also are likely to have some warrant holders selling over the next few weeks. Some warrant holders might not be willing to put up more cash to exercise their warrants. They may sell instead to raise cash. Sprott has over 5M warrants and is an unlikely seller. We need a big increase in volume to absorb these sellers. The quarterly report should help with that and there should be an announcement regarding a move from the Canadian venture exchange to the TSX. That could come on August 15.
It is now just 14 days or 334 hours until USSIF reports 2nd quarter earnings. The following is a quote from the USSIF 1st quarter conference call: "We have some catching up to do. We are achieving that in the second quarter." USSIF is confident that they will achieve 2.4M to 2.6M ounces of production in 2011. That means they need to average 633,000 ounces of production in the final three quarters. They have confirmed that production has increased. USSIF produced 494,363 ounces of silver in quarter 1 and they sold 438,043 ounces. I am expecting production of 590,000 ounces in quarter 2 and sales of 650,000 ounces at $37. That should bring $26M in revenues, including byproducts, and $9M in pretax profits. I look for USSIF to add $6M in cash during August alone as the warrants are cashed in and paid for. I expect USSIF to have at least $25M in cash on hand as of August 31.
Actually over 1M warrants had been voluntarily cashed in during quarter 1. I wouldn't be surprised if more of those were cashed in during quarter 2. Warrant holders were probably expecting these warrants to be called and some allready closed out their positions. A warrant holder must decide if they want to put up more money to buy more shares now or cash out and take their profits. These warrant holders are all people like Sprott that participated in the last financing. This is like a new offering for them to buy more shares at .35. If they thought it was a good deal last year they should really think its a good deal now. I think that USSIF is trying to clean everything up prior to the 1/5 RS and AMEX listing. These new shares are allready included in fully diluted share count. Get them issued and put the cash in the bank. I would like to see USSIF offer to buy back the .35 warrants at market value. Another words, if the stock is .60 offer to pay .25 to anyone that doesn't want to convert. That means the new shares never get issued. USSIF has plenty of cash to do that. It would actually drop the fully diluted share count if they did that.
USSIF to receive an extra $4.5M in cash. When these 13M warrants at .35 are cashed in USSIF will receive about $4.5M in extra cash by August 29. IMHO USSIF will have close to $30M in cash on hand as of September 30. These warrants are allready included in fully diluted share count. Sprott owns about 5M warrants and will now own about 30M shares of USSIF. The downside would be if someone cashes in the warrants and then sells their shares.
Sorry that was GPL or EXK or any other listed producer for that matter. There is no comparison.
It doesn't matter whether USSIF is actually a pink sheet stock or not. They are perceived as a pink sheet stock. If you want to find them on Yahoo you must punch in USSIF.PK. You have no idea how many people have told me they wouldn't touch USSIF because they are a pink sheet stock. Compare the $ volume of USSIF traded daily to that of GPL and USSIF and tell me there isn't a huge difference in what exchange you are on. Volume will skyrocket as soon as they get and AMEX listing and IMHO so will price
This stock is easy to manipulate because there is virtually no volume. On an average day USSIF trades less than $1M in volume in the U.S. and Canada combined. USSIF is so far off the radar it's ridiculous. No one ever heard of USSIF and if they did they won't touch a pink sheet stock. Compare that to EXK that trades about $25M a day in stock and isn't much bigger than USSIF. Earnings will help some, but the TSX and AMEX listings are whats it's all about. All of a sudden in one day USSIF volume will increase by 1,000% and stay there. Thousands of investors that wouldn't go near USSIF will now pant for it. There is nothing we can do but wait. Hopefully, these listings will come soon. USSIF could earn $1B in quarter 2 and many investors would never know and wouldn't touch it anyway. The day we get our AMEX announcement is the day USSIF arrives and things will never be the same. JMHO
This miner is selling at giveaway prices. United States Silver(USSIF.PK) will be reporting record revenues and earnings on August 15. I am expecting revenues of $26M and pretax profits of $9M. This stock can be purchased for .70 per share. USSIF is planning a 1/5 reverse split to gain an AMEX listing. After the split they will have 68M fully diluted shares. They should earn .40 per share in 2011. You can buy the after split shares for $3.50. USSIF has no debt and has $17M in cash. They are planning a 2nd mine in 2012 that will increase production by 20%. JMHO
USA.TO - On June 17 USSIF announced that a move from the venture exchange to the Toronto TSX exchange was a month or so away. This announcement could come any day now. This should be the first step in a move to the AMEX. The Toronto TSX exchange will give USSIF more exposure in Canada and should increase Canadian volume. It is now 503 hours until 2nd quarter earnings. I am looking for $26M in revenue and $9M in pretax profits.
Unfortunetly, the way accounting rules are when USSIF reports they must compute what taxes would be even though they don't pay taxes right now. If they make $10M in pretax profits they will report $7M in aftertax profits or .02 per share. The taxes are recovered at the end of the year. EPS is pretty meaningless right now until after the split. After the split, with 68M fully diluted shares, USSIF will start to see significant EPS. Then we can start being evaluated on an EPS basis.
We are undervalued because we hedge, we have too many shares outstanding, we are a pink sheet stock, we report our results late and we have been artificially held back so that someone could accumulate millions of shares at a cheap price. By the end of the year all of these problem areas should be gone. On January 1 USSIF should be a company listed on the TSX and AMEX with 68M shares outstanding. They should report about $40M in profits on $110M in revenues for 2011 or .60 per share. They should end the year with about $30M in cash. They will begin 2012 unhedged and the new Ceure mine will be under construction and close to production. JMHO
$40 silver = $30M in revenues. With 650,000 ounces of production $40 silver should bring $30M in revenues in quarter 3 & 4, including byproducts. Pretax profits should be around $12M and aftertax profits around $9. With 68M after split shares earnings would be about .13 per share per quarter or .52 per year. Actual earnings are much higher as USSIF pays no taxes right now.
2nd quarter revenues should be about $27M and pretax profits should be about $10M IMHO. I am looking for 650,000 ounces sold at
$37 plus $3M for byproduct sales.