In Past Takeovers, Jr. Gold Mining Stocks Have Gone For As Much As
posted on
May 04, 2010 06:31PM
In Past Takeovers, Jr. Gold Mining Stocks Have Gone For As Much As
10 Times. . .20 Times . . .Even 100 Times Their Earlier Trading Price:
Goldcorp Paid $8.6 Billion ($59.49 a share) for Jr. Gold Company Glamis!
Barrick Gold Bought Placer Dome for $10.2 Billion ($22.50 a share)
Goldcorp Paid $238 Million for Canplats
Barrick Paid $475 Million for 25% of Kinross Gold Project
Newmont Mining Paid $2.2 Billion for Normandy Mining
Newmont Mining Paid $4.9 billion for Franco-Nevada Mining
Dear Investor:
When the big boys - Barrick Gold (NYSE:ABX) market cap $38.2 billion. . . Newmont Mining (NYSE:NEM) market cap $25.2 billion and Goldcorp (NYSE:GG) market cap $28.3 billion - weren't looking, Silver America (SILA.OB) a little-known, junior gold and silver company out of Nevada stole off with 2 of the world's richest, remaining underdeveloped mineral prospects:
2 historic, long-dormant claims in Nevada's mineral-rich Carlin Trend, estimated to STILL CONTAIN $3 BILLION in forgotten gold, silver, lead and copper!
699 under-developed acres in Mexico's richest mineral belt, right next door to the world's biggest and most productive silver mine which is estimated to have RESERVES WORTH $6.6 BILLION!
Now that the deals are public, it's only a matter of time until one, or all of the major mining companies, decides to take a run at Silver America. Barrick, Newmont and Goldcorp all have major, neighboring operations in Nevada and Mexico that make Silver America's newly-rediscovered properties tempting takeover targets.
When it happens, you can be sure the price tag is going to be 20 times. . .30 times. . .even 50 times higher than the $1.00 a share you'll pay if you act first!
Why are all 3 of the world's biggest mining companies likely to start a bidding war for Silver America's two recent acquisitions? Why do the majors feel they have to go after under-developed claims that have been virtually inactive for the last 50 years? I'll tell you why:
Because, worldwide gold production is slipping and the big boys need to acquire new reserves of gold and silver just to maintain their stock price.
And here's what is important to understand if you want to grasp the real value of Silver America's two recent deals:
There are no more new mineral discoveries to be made! To add massive new reserves, geologists are turning to the biggest and best of the old.
Silver America is an exploration stage company focused on rediscovering and buying up formerly productive, but now-inactive, or under-developed mining properties, abandoned when $270-an-ounce gold . . . $5-an-ounce silver. . . and now-obsolete mining and recovery technologies made them unprofitable.
$35 of Silver, Gold and Other Minerals for Each $1.50 Share!
$3 billion dollars!
That's the value of the recoverable gold, silver, lead and copper reserves a Certified Report states still remain in the 2 historic, Nevada leases just signed by Silver America (SILA.OB)! I've studied the Report in exhaustive detail and it leaves no doubt.
Divide that $3 billion by the number of outstanding shares of SILA stock and you come up with $35 per share! Not bad for a stock that, if you hurry, you can still buy for $1.50 or less.
But you better hurry. That $3 billion in Nevada minerals could pale in comparison to what Silver America expects to find it its second blockbuster deal! Silver America has also just nailed down the mineral rights to a 698.9 acre prospect that neighbors to the world's biggest and most productive silver mine in Fresnillo, Mexico!
With an estimated $3 billion in reserves, Silver America is a Prime
Take Over Prospect. Don't wait, it could happen at any moment!
Now you and I both know that many exploration mining companies make exaggerated claims with nothing to back them up. I'm used to reading and hearing this all day long, and $3 billion is a big enough number to get anybody's attention. So, I dug deeper and really did some intensive homework on Silver America.
I read through every filing and the most detailed information I could find on Silver America (SILA). It was worth the effort, because I uncovered a previously-unpublished and very interesting report written for the previous owners of SILA's Nevada project by a prominent geologist by the name of Mark See.
Mark See, a renowned American Geologist, states in his report that SILA's Nevada property contains approximately...
69M ounces of Silver and...
1.1M ounces of Gold!
These two precious metals, together with other minerals on the property, add up to just over $3 Billion Dollars at current commodity market prices. This is a huge coup for Silver America and early investors who get in now before Barrick, Newmont and Goldcorp potentially buy SILA up from under your feet.
BUT.. The story gets even better - SILA not only holds the key to success with its rich Nevada project, but it also has. . .
. . .a 699 acre prospect right next to the single largest
producing Silver mine in the world!
Located in Northern Mexico adjacent to the US border. SILA's Guadeloupe Project is right next door to the famoyus, Fresnillo controlled silver mine.
Fresnillo is a Mexican company that, according to the Silver Institute, the world-wide association of Silver Miners, produced, approximately 34.8 million ounces of silver in 2008, making them the 3rd largest Silver Producer in the world.
Fresnillo is listed on the London Stock Exchange (LSE: FRES.L) and has a market cap of approximately $6.013 Billion Dollars. They are Mexico's largest individual Silver production company and their mine right next to Silver America's (SILA) Guadeloupe Project is the world's single largest silver mine producing some 33.78M ounces of silver a year.
With its $3 billion Nevada claims, SILA is sure to be on the radar screens of Barrick, Newmont and Goldcorp, and now the addition of 699 underdeveloped acres in Mexico's richest mineral belt has undoubtedly the company on Fresnillo's radar screen as well. I smell a takeover war!
Always hunt for elephants in elephant country!
It's a mining industry tenet: developing new projects next to massive already-producing mines will force the major player to protect its existing operation with a defensive acquisition.
Time and time again, major gold and silver mining companies have bought out their competitors or junior companies that happen to pull off miraculous deals like that of Silver America.
I wouldn't be at all surprised to see this stock hit $7.50 in the next six months and down the road, I see the potential for this totally undiscovered stock to reach $25 to $35 within the next 18 to 24 months! If Barrick, Goldcorp or Newmont decides to buy them out, who knows, you could see this stock explode to $45 or even $50 as share!
I wouldn't wait. Silver is set for a bungee-cord catch-up against the price of gold and the fact that Silver America is focused on developing silver resources makes it all the more attractive.
Believe me, I know what I'm talking about. I grew up around the mining and minerals business and I make my living today being among the first to identify early-stage mineral companies that are about to make the big time.
My name is Eric Dany. I'm the editor of Eric Dany's Stock Prospector Main Street Research. My specialty is digging up the facts on little-known natural resource companies whose stocks are about to explode with profits!
In addition to my regular monthly newsletter, every year since 2004, I put out my Annual Winning Stock Report. Last year's Winning Stocks averaged. . .
a 42.1% return, more than double the DOW's 18.8% gain!
My Best Buy pick gained 87.9% and one of my Winning Stock Picks was up 223.5%!
Some of my other recent winners include:
Sunovia Energy - Profits of 100%, 300% & 488%
Calamos Asset Mgt - High of 302%, up 206%
Transocean - Profits at 100% up 127%
Quintana Marine - up 114.9%
Celanese - 84.1%
General Cable - 69.8%
My research on Illumina Inc. told me the stock was undervalued and poised to move up. It gained over 100% after becoming a Prospector Pick. All of these stocks moved hard and fast.
And right now, I believe Silver America (SILA.OB) is the right stock to buy in this uncertain market.
Right now, every investor wants to know which way the market is headed. My answer is that you can't worry about the overall direction. This market is strictly for stock pickers. You want to be in the kind of special-situation stocks that are not dependent upon an up market for their shares to gain.
You don't want to miss this one. So, be sure to click on the link below for the complete story on my latest pick, Silver America (SILA.OB)