Opinions
Jaime Carrasco
U.S. Silver Corp.
USA-T
TOP PICK
Sep 07, 2012
Stock price when the opinion was issued
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A great company. Good management. This should be the 1st quarter that the cost of production is below the cost of silver. Have brought the $35 costs of 2011 down to $12. Production costs will continue to go down. One of their Mexican mines has an offshoot of zinc and lead. That covers the cost of production. By 2018, costs should be down to zero, because of the offshoot of these 2 by-products.
The question is, how do you see the price of precious metals from here. We saw the bounce back from around $1050 touching $1300 recently. Thinks this is a reversion to the mean in that gold and silver, not to mention oil and other metals, were greatly oversold. To get back to some equilibrium positions you need silver back to $1600 and gold where it is. He is very keen on both going forward.
(A Top Pick Apr 16/19, Up 87%) He still holds this. Likes the management team that has executed well. It should be trading higher than where it's at right now too. Management is the M&A team from Barrick.
USA hit a 52-week high today. It is moving with the sector but also good growth and lower losses are expected. The recent consolidation of assets and financing have brought further interest to the company. We would be OK letting momentum ride here for a bit, trimming into additional strength to maintain an appropriately-small-sized position.
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Management was the merger and acquisition team for Barrick (ABX-T) and left when Barrick bought their copper asset. Will produce about 2.5 million ounces. Very levered to the price of silver. Thinks they will continue to acquire.