the long and short of this story is that if silvers goes under...

the long and short of this story is that if silvers goes under AUS20 they are breakeven profit wise, though still cash flow positive.

I am working on $40 a tonne cash cost.At $20 silver that means they need around 60gpt to the tonne to breakeven cash wise . they are getting about 80gpt.At $15 silver they are breakeven


but at $15 silver they are $15million in the money on the hedge. What this means is the bank debt is effectively hedged

however this is no place for old men. You cannot invest in this if you are not willing to take a big risk.

Everyones position is different. I bought in at 6 c and sold a third of my position at 90c. I am only taking up about half my rights, mainly because i have been buying in the market at 12.5c. I see the risk here in the price of silver more than operational performance. Worst case is they shut the plant down until silver improves. They have enough cash from hedging and the rights to clear trade payables and bank debt. The price will go to 3 to 5 c in this scenario.

Upside is silver goes to AUS$30. CPM Group who have the best handle on silver are seeing US22 -24 range for now ,with a slighly bullish slant. But any big upside only comes from investor interest or someone cornering the market causing a big short squeeze like Buffett did in the late 90's. But dont invest here hoping for that to happen

so if we hit AUS $30 and production ramps up to over 2millionces ounces market cap may rise back to $60million plus or 20 c a share. Not great odds. There is far better value in gold juniors than silver juniors right now.