I wouldn't exactly say ECU was a merger of equals, even though they got half the company. ECU was a HUGE resource base in a good jurisdiction and near term production. I think AUMN really "stole them." Velardenas will have modest production next year, but when expanded will be a very robust producer. This is the cash flow engine a company like AUMN needed to develop a world-class asset like El Quevar.
Speculative? Yes if you bot high, and using "conventional wisdom," but I tend to think this IS a SURE THING at $7. There is no way this stays at this price once production ramps up and El Quevar starts to show what a world-class ore body looks like.
I'm with you on issuing stock at a 52 week low. They had $85M end of Q2, so I think they could've waited for market to recover, but maybe they thought they needed to cash up a bit more "just in case" capital markets really sh*t the bed next. In any case, they went from 34M shares to 38M shares. It's not the end of the world. Most companies would kill to have this resource base and only 38M shares. You can count the number of companies with this large a resource on ONE HAND with < 100M shares outstanding! Let's see: Randgold, Detour, CDE (1:10 reverse split LOL), uhhh, ok now I am drawing a blank... GORO only has 53M shares, but I don't think they really "count" without a 43-101 yet, although they have a lot of lightly drilled high-grade and I'm sure they will prove up more eventually. Bottom line: these are all big time billion dollar outfits. AUMN isn't YET.
AUMN seems to have priced in complete disaster. There are a lot of catalysts: updated El Q resource, ramping up and expanding Velardenas, continued drilling success at El Q, cash flow at V next year. Not sure how far away a PEA on El Q is, but it could be a doozy by then, especially with silver prices heading higher than $50. Don't believe all these IDIOT brokerage houses who are calling for $25 long term silver. They are F*CKING MORONS. They are NEVER EVER RIGHT about long term metal forecasts. These douche bags are more useless than a bag of dick hair. It's comical to me. They couldn't find their ass with both hands. Their HORRENDOUSLY WRONG CALLS are a JOKE! When gold was $700 it was going back to $500. When gold was $1000 it was going to back to $700. When gold was $1200-1300 it was going back to $1050. Their opinion on silver price is about as good as Oprah or Dr. Phil or Lady Gag-me. Doesn't it occur to everyone these guys are PAID LIARS?!?!
I don't buy companies based solely on being a takeover candidate, but let's face it, AUMN fits the bill for ANY senior or midtier silver miner. Take a company like First Majestic. They are a class act. Fact is, AUMN would DOUBLE AG's resource and provide a pipeline that could double their production as well. And trading for 20-25% First Majestic market cap. Can't get more strongly accretive than that. Another possibilty: cash-rich, cash-flowing giants like PAAS CDE or Hochschild could come in any buy this for CHUMP CHANGE. They'd be stupid not to. Mexico and Argentina are among the best places these guys operate in too, so that's a bonus. Wouldn't be surprised if someone came in with a lowball bid and a counterbid emerged.
I'll admit AUMN has been the worst stock for me in over a year for me. The lower it goes the more I like it and the more I've bought. My portfolio is practically a PM mutual fund so it's not a big deal for me to hold a large position in a miner that is sucking bad temporarily. Fortunately I'm no latecomer to PMs so I've made so much over the years, I can afford to get deep in the hole on one and no biggie. I understand AUMN is a multiyear play. It could easily go back to the teens within 6 months IMO, but I am holding this as more of a multiyear multibagger play.
