Yours has the nutshell version of the facts right.
The issue here is that they will never be one of the lowest cost producers. That will mean higher dependence on the price of metals than lower cost producers. I don't think CDE was wrong in their "big picture" analysis of the relative opportunities, but CDE was, and, IMO still is, a badly managed company. It is pretty hard to argue with the numbers CYLPF is putting up, now. The new owners are doing a vastly better job managing the mining than prior owners could, doing well at controlling costs, finding better targets, and getting things CDE broke and left in disrepair, fixed up well enough to make those new finds more meaningful in the future.
The meaning for investors of NOT being among the lowest cost producers is a vastly greater dependence on metals prices.
When silver is at or heading to $4 an ounce... you'll want to be in something else. But, when metals prices are rising, and moving higher from the point where profits are being made, there is vastly larger LEVERAGE available to investors from holding shares in companies that are just below or near to break even. The shift to profitability here is a big deal. The fixing and reopening of closed shafts is a big deal too. All of that happening now is timely.
Where this goes in the future is STILL going to be a function of metals prices. I don't think you need the most optimistic projections of future metals prices to happen in order for this investment to work out. All you REALLY need for this to work out is for what we see now in the trends to continue over the next two or three years.
What will CYLPF look like with silver at $25 in a year... and what will they look like with the trend in metals prices moving up from there ?
You ALWAYS get better leverage from higher cost producers and juniors with new finds as the metals bull romps. The expectation some have that we're in a "bubble" for metals now... is only evidence of how deluded some are about how bad things are in the economy, and how bad the management of the problems we have is. Inflation IS coming. Asia IS going to generate more wealth than a debt laden U.S. The Chinese ARE going to buy more silver with their wealth.
The story has a few more layers to it than you see in the media. It isn't just Chinese concern with our dollars causing them to diversify their dollar holdings into hard assets... it is a FACT of cultural differences in our approach to creating and preserving value. Their model is going to dominate in the future... so, what THEY value is going to be what has value.
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