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February 27, 2009

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MontyHigh

I decided a while back to dump my silver miners. This was for a couple of reasons:
(a) I just didn't buy the "silver is scarcer than gold and is going to the moon" arguments of silver pumpers. The fact is that a decent silver underground mine ore grade (of 300 g/tonne) is about 50 to 1 the ore grade of a decent underground gold mine (6 g/tonne).
(b) I couldn't find any silver miners that were set to flat out make a bunch of money at current silver prices. I am a value investor at heart. I want companies where all they have to do is execute with commodity prices staying stable to make a tonne of money (while I have a bullish outlook on the commodity fundamentals). I've found this with Jr gold miners, but not with silver.

I should probably turn this comment into an article.

MontyHigh

BMinnick

Doug, If you buy silver stocks, have you considered Minco Silver? 321gold put me on to it.
4 ounces of silver per $1.00 share coming on line in 2 years. China mine with low costs and great management with good connections. Solid finances and few outstanding shares. Wild card of just foreclosing on upgraded Sunshine Mine. Sunshine has over 200 Million ounces of silver and only needs to be dewatered further to return to producing 4-5 million ounces a year. Sunshine is in court a battle between SNS Silver and Minco. Minco seems to be in the better legal position.
Either way without Sunshine Minco seems to be a homerun.
Thanks for the tip on Dynasty Metals. I bought some today, and will continue to load up next week.

Gold Stock Strategist

Doug, you are doing a fantastic job analyzing junior gold producers with this series on open pit miners that is expanding to other companies. Keep up the great work! Best.

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