My fave sleeper silver play

Greetings investors.

Here’s our current fave, a real sleeper called Fortuna Silver Mines Inc. (FVI.TSXV), with silver/polymetal assets in Mexico and Peru.

Shares of FVI spiked 25% yesterday on news from its 76% owned San Jose silver-gold deposit in southwest Mexico. It released the best intercepts from drilling that ranged to 4.36 grams gold and 302  grams silver per tonne over 7.1 meters.

That’s the first of many such media releases to be expected in the coming weeks. The company drilled a total of 43 holes in the project’s Trinidad zone and 23 in the San Ignacio during 2007, and assays for all are in the pipeline now.

Fortuna plans to use the data to update its mineral inventory at San Jose by the end of the next quarter. That currently stands at an indicated resource of 17.7 million ounces silver equivalent, with another 49.1 million inferred ounces.

That’s not bad for a deal with $46 million in the bank and a market capitalization of $195 million. In fact it’s among the best silver deals I’ve seen.

They even have some ‘elephant country’ stories from Peru, where the company’s wholly-owned, silver-lead-zinc Caylloma Mine is situated, in Arequipa Province. How does 6,231 grams per tonne silver over 7.35 meters grab you? That intercept was made along the eastern extension of the Bateas Vein, located more or less in the center of the concession area.

Caylloma has proven reserves of 3.6 million ounces silver, and about another 13 million ounces in the inferred resource category. The mill there currently processes approximately 850 tonnes per day.

If you’re looking for a silver deal with home run potential, this is as good as it gets!

Kb
 

The BarkerLetter on April 10th 2008 in Commodity investing

2 Responses to “My fave sleeper silver play”

  1. silveraxis responded on 20 Apr 2008 at 6:52 pm #

    The true width of that 6Kg/T silver intercept is about 1.6 meters. Still very good but Caylloma is primarily a lead-zinc project for now (silver was about 20% by value of 2007 production). Also, how much of a sleeper is Fortuna considering it is Dines’ top recommendation? If you want a real sleeper silver play with aspirations to be a senior producer (Fortuna has humbler plans to be mid-tier), take a look at First Majestic.

  2. The BarkerLetter responded on 22 Apr 2008 at 3:49 pm #

    yeah well, I guess. I looked at First Majestic, bought it, sold it, yadda yadda. Don’t think I want to buy it again at $4 though.

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