Coeur d'Alene Mines Corp. (CDE)

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Where are the silver bulls?
Few listed resources subsectors are more reviled than that mining, developing and exploring for silver bullion.
http://www.mineweb.com/mineweb/view/mineweb/en/page43?oid=73294&sn=Detail

Author: Barry Sergeant
Posted: Tuesday , 18 Nov 2008

JOHANNESBURG -

Across the broad landscape of globally listed mining companies, silver bullion miners, developers and explorers are less wanted than anything else. Looking at 43 names listed in the category, the average stock price loss from highs, measured on a weighed basis, is currently around 83%, leaving especially the smaller stocks fully vulnerable to facing the prospect of shorter term bankruptcy.

Silver bullion itself is 56% off its highs, seen in March this year. Amid the apparent dire state of affairs for both silver bullion prices, and stocks operating in the silver space, bullish comments and forecasts remain the order of the day. This week, ScotiaMocatta insisted that in spite of poor demand outlook in the short term, the long-term outlook for precious metals remains bullish, and that "silver is well placed to outshine gold".

Pan American Silver president and CEO Geoff Burns noted last week that despite the global financial crisis, "the physical investment market remains very strong as common investors are accumulating physical silver and gold during turbulent times. I personally believe they will be handsomely rewarded for their foresight," he told analysts and investors during a conference call to discuss quarterly financial results.

In his opening address to the successful London Silver Summit on 5 November specialist precious metals and natural resources fund manager Ned Naylor-Leyland said the "death of fiat money will happen". He argued that a new series of Bretton Woods discussions getting under way at the end of this month will at least focus people's minds on the idea of a precious metals backing for world currencies.

During a conference call on 4 November Hecla Mining president and CEO Phil Baker insisted that long-term fundamentals for silver have never been better: "While there is a great deal of short-term uncertainty about the prices of the metals we produce, I believe in the long-term the fundamentals have never been better . . . Silver like gold should eventually perform well as a result of the impact of all the liquidity injection into the economy by the Fed and Treasury in what we believe will be the ultimate impact on the US dollar".

While conceding that current silver prices are probably "the exact opposite of what most would have predicted in these economic times," Silver Wheaton president and CEO Peter Barnes declared on 3 November that "we're more bullish than ever on the price of silver as a result of what's happening on the global markets today". In a conference call to discuss the company's financial results, Barnes said that "while nobody knows how long it will take to get through this crisis mid to long-term prospects for the silver market continue to look very promising".

Investors are nowhere near buying the story, but the bulls are apparently nowhere near holding off. Dennis Wheeler, president and CEO of Coeur d'Alene, declared earlier this month that while the global credit crisis wreaks havoc with the mining industry, "overall, we continue to see a positive supply/demand fundamental picture, particularly on the supply side". During a recent conference call to discuss financial results, Wheeler noted that 75% of silver production is a by-product of base metal mines.

The suggestions are that recent dramatic drops in prices - as in the case of silver bullion - for copper (down 59% from highs), lead (down 64%) and zinc (down 60%) delay certain projects from streaming, and curtailment or even closure of certain existing operations. While price falls remain essentially an external factor, given that miners are price takers in most senses, the real danger for silver may be its ignominy, like some other commodities such as cobalt, as mainly a byproduct.

Of the world's top 15 silver miners by physical volume, just three, Fresnillo, Pan American Silver, and Volcan, rank as primary silver bullion diggers. Separately, investor demand for listed silver stocks may have been partly cannibalised by specialised exchange traded funds which hold silver bullion, currently worth USD 2.5bn, on behalf of investors. These ETFs started appearing during 2006, a time when listed silver stocks traded at a premium to their gold peers.

Selected silver stocks

Stock
From
From
Value

PRODUCERS
price
high*
low*
USD bn

Fresnillo
GBP 0.98
-83.0%
3.0%
1.055

Silver Wheaton
USD 2.78
-85.8%
8.6%
0.699

Pan American Silver
USD 10.04
-77.2%
12.4%
0.811

Hochschild Mining
GBP 1.16
-77.1%
25.1%
0.535

Silver Standard
USD 8.28
-79.8%
54.8%
0.519

Coeur d'Alene
USD 0.52
-90.0%
26.8%
0.287

Hecla Mining
USD 1.31
-90.0%
32.3%
0.222

Volcan
EUR 3.60
-82.8%
19.6%
0.382

Silvercorp
CAD 1.66
-84.4%
1.2%
0.206

ECU Silver
CAD 0.58
-77.7%
5.5%
0.115

Apex Silver
USD 0.74
-95.9%
63.7%
0.043

First Majestic
CAD 1.26
-78.1%
44.8%
0.076

Silverstone
CAD 0.46
-87.2%
15.0%
0.046

S. Métallurgique d'Imiter
MAD 242.00
-66.6%
0.0%
0.455

Endeavour Silver
CAD 1.20
-73.3%
20.0%
0.048

Excellon
CAD 0.22
-88.8%
2.4%
0.028

Fortuna Silver
CAD 0.53
-85.3%
39.5%
0.037

Great Panther
CAD 0.29
-83.1%
61.1%
0.019

Genco Resources
CAD 0.32
-91.9%
68.4%
0.011

Impact Silver
CAD 0.29
-84.7%
65.7%
0.011

Revett Minerals
CAD 0.08
-91.7%
14.3%
0.005

US Silver Corp
CAD 0.04
-95.7%
0.0%
0.007

DEVELOPERS & EXPLORERS




Abcourt Mines
CAD 0.08
-86.4%
23.1%
0.004

Apogee Minerals
CAD 0.04
-92.6%
33.3%
0.002

Aquiline Resources
CAD 0.93
-92.0%
19.2%
0.048

Arian Silver
CAD 0.05
-91.1%
25.0%
0.005

Aura Silver
CAD 0.04
-91.3%
100.0%
0.001

Avino Silver
CAD 0.38
-78.7%
111.1%
0.006

Bear Creek Mining
CAD 0.80
-91.5%
37.9%
0.036

Esperanza Silver
CAD 0.48
-77.0%
54.8%
0.019

Klondike Silver
CAD 0.08
-78.1%
33.3%
0.006

MAG Silver
CAD 4.70
-70.4%
33.5%
0.188

Mexican Silver
CAD 0.11
-87.8%
69.2%
0.004

Minco Silver
CAD 0.46
-89.0%
39.4%
0.012

Mines Management
USD 0.85
-81.3%
77.1%
0.019

Oremex Silver
CAD 0.08
-85.3%
275.0%
0.002

Orko Silver
CAD 0.40
-81.2%
42.9%
0.035

Oro Silver
CAD 0.08
-93.3%
23.1%
0.002

San Anton Resources
CAD 0.05
-95.8%
11.1%
0.004

Silvercrest
CAD 0.30
-80.2%
55.3%
0.011

Silver Eagle Mines
CAD 0.07
-92.7%
7.7%
0.003

S American Silver
CAD 0.16
-80.0%
6.7%
0.007

Southern Silver
CAD 0.04
-89.9%
33.3%
0.001

Averages/total

-85.0%
39.4%
6.032

Weighted averages

-83.1%
16.3%








GOLDS WITH NOTABLE SILVER




JSC Polymetal
USD 2.67
-72.9%
167.0%
0.841

Minefinders
CAD 4.58
-67.4%
13.1%
0.186

Gammon Gold
CAD 4.01
-64.2%
14.2%
0.392

Kimber Resources
CAD 0.75
-62.1%
41.5%
0.038

High River Gold
CAD 0.09
-97.4%
125.0%
0.023

New Gold
CAD 1.10
-88.7%
3.8%
0.191

Ovoca Gold
GBP 0.03
-84.3%
23.5%
0.017







WORLD'S TOP SILVER PRODUCERS (2007)



BHP Billiton
GBP 8.76
-60.3%
15.7%
82.121

Polska Miedź
PLN 24.20
-79.8%
20.5%
1.600

Fresnillo
GBP 0.98
-83.0%
3.0%
1.055

Kazakhmys
GBP 2.36
-88.0%
12.3%
1.893

Pan American Silver
USD 10.04
-77.2%
12.4%
0.811

Goldcorp
USD 19.97
-62.1%
44.3%
14.554

Volcan
EUR 3.60
-82.8%
19.6%
0.382

Buenaventura
USD 12.48
-70.9%
38.7%
3.431

JSC Polymetal
USD 2.67
-72.9%
167.0%
0.841

Southern Copper
USD 11.50
-72.6%
26.0%
10.017

Hochschild Mining
GBP 1.16
-77.1%
25.1%
0.535

Rio Tinto
GBP 24.35
-66.0%
24.4%
52.760

Coeur d'Alene
USD 0.52
-90.0%
26.8%
0.287

Oz Minerals
AUD 0.73
-82.0%
9.0%
1.490

Xstrata
GBP 7.95
-82.1%
16.0%
11.591







SILVER ETFs





iShares Silver Trust
USD 9.35
-54.9%
10.7%
2.054

ETFS Silver
USD 9.33
-55.9%
9.0%
0.183

ZKB Silver
CHF 1,085.00
-48.5%
13.4%
0.280

Averages/total

-53.1%
11.0%
2.517

Weighted averages

-54.3%
10.8%














Spot silver/oz
USD 9.42
-55.9%
11.4%


* 12 month





Source: market data; table compiled by Barry Sergeant