Revett Minerals Inc. (RVM)

[DetVicMackey]

If undervalued is what you want, then SLX does not come close in my books. With close to 300M shares fully diluted (basic + in the money derivatives), its market cap is roughly $270-300M. It has one operating mine, La Guittara, that produces less than 1Moz Ag at 320tpd. They have plans to expand operations there, but this will take time and money to make it happen. Genco was undercapitalized to develop the mine any further, hence the merger. Underground development also presents lots of challenges and risks which is something RVM and other underground miners are aware of. In terms of M&I ounces, SLX is pretty slim even after combining all of its properties. Silvermex could make its operation profitable, but I don't like the risk-reward and for all those reasons I think it is overvalued.

With silver continuing to make new highs, pretty much all momentum silver stocks are as well, but I would argue all of them are expensive. RVM and USA are the biggest undervalued silver companies that I am aware of and are relative laggers in the industry. RVM produces over 1.3M ounces, without counting copper by-products, and trades for near half SLX's market cap. USA produces about 2.5M ounces with similar market as well. The only other silver producer I own is SVL which trades at a slight discount. GPR seems fairly priced.