nice silver play, page-10

From another poster on the SVL thread:

My opinion is CCU is an AVOID and it is best to stick with SVL for upside.

CCU currently only has 12.8Moz over 5 year mine life.

At $34 silver, $30m capex & $10 opex, CCU will earn $170m in net cash over 5 years or, (on 160m shares), $1.06 per share in cash over 5 years.

The current share is $1.04. So if you buy one CCU share today for $1.06 and CCU is wound up afer 5 years of production, you will earn a profit of 2 cents on your $1.04 investment.

Then silver price may fall, say to $25/oz. This means CCU will earn $100m net cash (after capex) over five years or 63 cents per share. Your $1.04 investment will lose 41 cents over 5 years.

CCU has low grade silver. CCU are gambling on increassing their already low grade deposit.

In my mind, CCU is a definite sell. It has done well for shareholders to date but, imo, buying CCU for $1.05 is crazy.

Best to stick with SVL for upside.

SVL is just beginning, like a small child ready to grow.

But CCU has not even started production and is already a full grown adult, like an adult that has not even started to walk yet.



My response:

CCU and SVL are very different.Same commodity yes but other than that very different.The silver price is flying at the moment.Is CCU or SVL in a better position to take advantage of this?CCU should be producing by years end.SVL??I dont know?2014/2015??If ever?Who knows?

The above post failed to recognise that CCU has 14.3 million ounces in reserves AND a further 50.6 million ounces in resources.They have a definate reserve at the current time and there is a strong chance that this will be added to substantially IMO and once again time will tell. SVL I believe have 10 million ounces of INFERRED resource.Granted they are targetting for 26-57 million ounces of silver at their webbs silver project and some are talking as though the top end of this range is a given. We all know what can happen if this fails to materialise.

I do not have anything against SVL.Great grades,great commodity at the present time and great POTENTIAL. We shall see if this potential materialises in the future and if it does then the SP will be many multiples of todays price.I do wish holders well because their could be great rewards for holders here.

Both CCU and SVL have their merits.As long as the silver price keeps moving forward then CCU will like wise do the same.The incremental silver price increases adds straight to the bottom line.

CCU should indeed have a far greater MC than SVL at this stage.