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Message: Re: the silver rush is on

Oct 20, 2008 06:36PM

i can only speculate about that, but there a couple of possible answers. they still won't be shipping any concentrate for another few months, and the disconnect between the prices of paper and physical silver isn't going to last forever. some kind of event will bring it to an end, probably sooner rather than later. it may be a comex default, or a new international monetary reform and/or a devaluation of the us dollar.

so by the time the company did all of the work required to produce silver bullion for the retail market, it may be unnecessary. that just isn't the business they are in. it may not be worth the time of management to get involved, as they may already have a full plate with 17 projects. they will be producing concentrate, which will then have to go to a smelter, and then to a mint.

i don't know the specifics of the contracts they have negotiated, but the company will produce three concentrates; silver, tin and zinc. the silver is of high purity, so i believe they have negotiated the best conditions of sale possible. tin is also in high demand, but zinc prices are weak, so the zinc may have to be placed in country. they haven't hedged or sold forward any production, but as of now, they will be selling the metals at the spot price. i would prefer to wait until prices recover, but it appears the company's cash requirements come first.

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