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2/4/14

Silver Standard (SSRI) (SSO.to) notes

On the Marigold mine deal: I think it's made a smart purchase at the right price.

My interest in the company also went up a notch or two a few days ago, when reading (got to it late) that of its pared down $22m exploration budget for 2014, it was going to spend a chunky $6.5m on the Berenguela project in southern Peru. It just so happens that many mining people in Peru unconnected with SSRI think highly of that project and it's been a bit of a headscratcher for many that the thing has been left undeveloped for so many years. The strong copper kicker from the rock makes the economics solid, the engineering looks simple enough (in theory), political risk and community relations in that microzone of Peru have improved a lot in the last two or three years and it could easily become a very profitable 2m oz Au per year mine.

Pirquitas isn't doing badly and the recent financial upheavals in Argentina will help it on the costs side. Though I need to look more closely, because it's been a while since doing any real work on this thing.

I don't own SSRI, though it probably deserves a revisit and some decent DD work now. Treasury position good enough even after paying cash for Marigold, debt position looks manageable. Looks quite cheap on a first pass.