nice....very nice

Nice....Very Nice...terrific day and terrific close.
Technically strong, tomorrow will probably see the test of 50c and if it takes this level out, blue sky.

Let's recap, my hope has realised or realising so far:
1. Ill winds have blown away- commodities rising
2. Silver crossed US$30/oz and A$30/oz, both significant milestones and yet Gold/Silver is still at 47:1 (slowing moving down). Prefer that it stays $30-31/oz for the week - slowly does it "three steps forward one step back" for a sustainable climb.
3. My prediction of CR placement to Indon billionaire at a premium then. Prajogo bought in at 40.8c, he would not do that if he does not see multiple fold return on his investment. In fact, the risk/reward ratio is rather low (low risk high return) that I am wondering why the Future Fund would rather put big$ in companies like Telstra and completely losing sight to all the big future generators of Australian wealth- yes, the miners...and which the Govt prefers to tax after they have successfully dug the ore from the ground
4. Santa rally - realising but to be proven. US S&P500 futures is in the green and a close above 1225 would be good. Dec also traditionally a good month.
5. US unemployment at 9.8%- bad news means Bernanke will have ammo to implement QEII (print money) possibly in excess of announced $600b- money printing means sorry state for the US fiat currency. This development is an important one that will continue to underpin silver and gold prices. Now EU also looking to print money, so goes the Euro as well. What's also spectacular is that silver prices are rising in A$ terms and that is fantastic for CCU as US silver proceeds get translated into A$

Looking forward, CCU is gearing for production in late 2011 - so what would silver price be then? I see two scenarios. Scenario 1 is an orderly rise in tandem with a high gold price (that would reach US$2k by end 2011 or early 2012). I believe that there is small room for a USD rate rise given the jobless recovery situation in US. If gold reaches US$2k, silver should be at US$42 assuming the 47:1 ratio is maintained. Scenario 2 is a more armageddon scenario with a loss in confidence in the US monetary system with US currency no longer serving as a safe haven...instead gold becomes the safe haven that people resort to and the IMF stops selling gold. Cataclysm takes gold to US$5k and silver $100.

Now what impact does this have on CCU valuation:
Let's assume US:AUD is 1:1 for simple calculation

Scenario 1

Annual production of silver: 2.3m oz (10% less than management estimate)
Opex cost: $8.50/oz (30% more than mgt est with lead recovery)
EBITDA: A$77m (A$42-$8.50)*2.3m
Share base: 150m (allow 10% higher)
EBITDA/shr= 0.513
EBITDA multiple= 3 (conservative)
Valuation= A$1.54

For every A$1 increase in silver price per oz, EBITDA increases by A$2.3m and EBITDA/shr higher by A$0.015 and valuation increases by A$0.046 (at 3x multiple)

Management Powerpoint slide also showed CCU's EV/Resource and EV/Reserve is half that of its Canadian peer silver developer Minco Silver corp (TSX listed)- equivalent valuation would effectively mean CCU price should be A$0.80.

its mind boggling if Scenario 2 becomes reality....and you know why banks should be avoided and buy precious metal stocks.