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Here is an excellent report on Silver
Eagle Mines by
Silver Eagle Mines
is one of the many junior silver explorers active in silver-rich Ever since the
Europeans began exploiting the precious metals in the “ Considering its
history, I believe The miners of the
past already did the work for the new generation of silver miners. They made the discoveries. And the new miners can take advantage
of these discoveries because most of these old mines still have a lot of
silver remaining. While this
concept seems a little backwards, today’s silver miners have the
advantage of time. Most of Because of this,
today’s silver explorers are finding vast resources of silver
mineralization at these past-producing mines that previous operators either
didn’t identify or considered too low grade. So with a combination of modern
exploration and processing techniques and higher silver prices, many of these
historic deposits are today amenable to profitable mining. Even better is many of these deposits
are open in all directions. This
allows for brownfields discoveries of the same
high-grade silver that was so abundant for the Spaniards centuries ago that
they used it to shoe their horses.
Silver was flowing in the streets! With so many silver
explorers flooding into Silver Eagle is a
newer stock to hit the public markets but its founding as a private company
dates back to 2003 under the name of A.J. Resources. While Silver Eagle’s early
interests were in Canadian exploration properties, the late 2003 acquisition
of a private Mexican company brought it to where it is today. This acquisition gave Silver Eagle
Mines an 80% interest in its flagship Miguel Auza
property. Miguel Auza is a small-scale but impressive silver project that
is quickly advancing to once again become a functional mining operation. This project is spearheaded by an
exceptional management team with a broad array of valuable experience in the
mining industry. And the
experience this management team brings is being translated into vertical mine
integration that should greatly reward shareholders.
Miguel Auza is a municipality in the state of Zacatecas. It is also the name of the property
that has been host to mining for over 400 years. Interestingly remnants of infrastructure
can still be found on this property from the days when true horse power spun
the winders to hoist ore from the rich silver veins. The area in which Silver Eagle is
focusing saw mining operations as recent as the late 1980s. And SEG believes there is a lot of
silver left to be mined. As mentioned Silver
Eagle acquired its original interest in Miguel Auza
in 2003. This initial 80%
interest was obtained for just $250k in cash and $2m of exploration
commitments which have subsequently been fulfilled. Then in late 2006 SEG purchased the
remaining 20% of this project for $4m.
Also in the last several years SEG has continued to consolidate the
ownership of the massive Miguel Auza property to
where it now has direct ownership in 18 of the 20 mining concessions. This total land package now includes
the mineral rights on over 41k hectares (100k+ acres). Since it has
established ownership, Silver Eagle has been aggressive in advancing the
development of Miguel Auza. It has already obtained all the
necessary permitting for exploration and operation, the infrastructure is in
place, and a local experienced workforce is already on the job. In its exploration efforts to date 50k
meters of drilling have been completed with another 30k planned for
2008. SEG is now able to see the
fruits of its labors with a growing resource base that includes 17m+ ozs of high-grade silver. Typically the silver
mineralization in underground vein mining grades higher than what you would
see at an open-pit deposit due to geological makeup and mine design. And Miguel Auza’s
resources are grading very nicely so far. About two-thirds currently reside in
the indicated category grading an average of 159 g/t with the rest in the
inferred category grading an average of 215 g/t. And I suspect that through ongoing
exploration Silver Eagle will not only be able to grow its silver resources
but improve the grade. Overall exploration
and development efforts at Miguel Auza continue to
be encouraging. At the known vein
systems from previous mine workings Silver Eagle continues to drill and
develop intercept ramps. And this
development continues to identify new
veins. In fact drilling at
several veins has been returning silver grading in excess of 1k g/t! So far all veins remain open at strike
and at depth. Now even though
Silver Eagle Mines has not proven economic reserves yet, I consider Miguel Auza to be a development project. And this is because within Miguel Auza’s Calvario vein
system a small-scale mining operation is already underway. Calvario is SEG’s primary vein system of focus and currently
hosts all the identified resources.
Test mining is focused on the bulk samples retrieved at depth or
stockpiled at the surface and the ore is currently being processed at a rate
of 150 tonnes-per-day (tpd). Even though this
operation does produce cash flows with the sale of its concentrate, it is not
classified as an official mining operation. Silver Eagle classifies this output as
incidental revenue that credits development costs. Overall the information obtained from
this operation has proven to be very helpful in the design of the future
mining plan. As part of a $3m
2008 exploration program Silver Eagle Mines has four drills spinning on the
Miguel Auza project. I expect the results from this program
will continue to upgrade and expand resources. These results will also feed a PFS
that is underway targeting expansion plans. Interestingly Silver Eagle just
recently purchased equipment capable of increasing mill capacity to 800 tpd. The PFS
is expected to be complete any day now and the results should dictate how
best to utilize this new equipment. Ultimately
don’t let resources and operations on the small side today distract you
from Miguel Auza’s potential going
forward. With all the known vein
systems open in all directions, several other high-potential exploration
targets, and a huge land holding in the middle of a rich mineral belt that is
largely unexplored, I believe the sky is the limit for this project. Miguel Auza
is an excellent operation.
Silver Eagle has a
very strong balance sheet and already holds sufficient working capital to
bring Miguel Auza into full commercial
production. This is the result of
active equity financings since its IPO.
In June 2006 SEG’s IPO brought in
about C$17m. Then in May 2007 it
closed a massive public offering (considering the small size of SEG) that
grossed it C$30m. As you can see
in its chart this unfortunately had a significant dilutive effect on SEG’s stock.
First, look at www.miningpedia.com
It is a FREE comprehensive database of mining stocks. Anyone can update
or enter data, it's like wikipedia.com. Miningpedia
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frees me up to do what I like best, which is to write commentary. My commentary retains the name, "Silver Stock Report", but
for individual stocks, please see miningpedia.com. Second, I offer a "look at my
portfolio" for $50/month; where I share a peek at which stocks I own,
once a month. You can log in at any time, repeatedly, and also see all
my prior months Please
visit Silver Stock Report for specific stock picks. Information
contained herein is obtained from sources believed to be reliable, but its
accuracy cannot be guaranteed. It is not intended to constitute individual
investment advice and is not designed to meet your personal financial
situation. The opinions expressed herein are those of the author and are
subject to change without notice. The information herein may become outdated
and there is no obligation to update any such information. The author,
24hGold, entities in which they have an interest, family and associates may
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