The following is all speculation based on company anns.The Dec...

The following is all speculation based on company anns.

The Dec qtr showed 109,561oz @ $31.78/oz = about $3.5M

Total sales and related revenue $4.3

$920K for exploration
$4.4M for development
Nil for production (???)
$600k for trust payment (last payment, not ongoing)
$1M for admin.

So assuming all the production costs came out the development budget (trial production?), we can probably assume at least $1.5M is actually production, so about $3M for actual dev. Hopefully this will drop.

For the March quarter, they are talking 3100oz/day. 90 day quarter, can they do 250,000oz for the quarter? At about $30/oz silver price over the quarter, we would like to see at least $7.5M in sales revenue this quarter. Production at $15/oz, ~$3.8M in prod costs. Another $1M for exploring, $1M for admin and $3M for dev makes $8.8M.

Could well go close to breaking even for the March quarter.

Even so, for 2012/13, if they are doing 1.5M oz at net $15/oz, then projected revenue is ~$22M. Admin and exp at $8M (from above $1M + $1M per qtr) leaves $14M minus development for earnings. Even at zero development, that would give a P/E of about 7 at the current share price.

In terms of total value I have concern that the MC is over 5 times the asset base. There is no way this stock could be considered a value play. Growth play, yes, highly dependent on silver prices. That's why I'm holding.