BWLRF- This is my largest position currently. I see very little downside risk at current levels but I can see an easy double from here. I listened to the robtv interview with the CEO again. Lots of good news:
1. Production of their Canadian Langlois mine is now expected to start by late this year instead of mid 2007. There already is $225 Million worth of infrastructure in place there. It will only take about $25 Mil to get it up and running. When they decided to start it up they had calculated that it would provide a 17% Rate of Return based on 1100 tons per day and with zinc at 53c/lb. Now they plan to run it at 2000 tons per day and zinc is over $1.30.
2. They will add a lead circuit at Myrna Falls by the end of 2006. This will get them more money for their copper since an impurity is removed plus they will get substantial additional revs and profits from the lead.
3. They expect production in 2007 to return to the levels they had in 2004 before they closed two mines. That is nearly a 50% increase from current production levels.
4. They expect to have over $100 million in cash on hand by years end and that is after spending $75 million on capital expenditures to increase production and reserves.
5. CEO expects zinc prices to remain strong with increased world demand, especially China and India. As he put it, there will be blips like we have just seen but demand for zinc will exceed supply for quite some time. 60% of Breakwater's production is zinc, followed by Copper, gold, silver and lead.
AI
