"Given typical market valuation of 10 to 20 times earnings for mining shares", should Silverado succeed in its gold exploration, and subsequent production ("...which appears to be possible given their current placer operations, exploration work and reserves indicated in the Bundtzen Report..."), then "the shares would have the potential to move to the region of 40 cents to 80 cents ($0.40 - $0.80) - or a multiple of eight to sixteen times the current price."
Having being battered down to the $0.05 range we view the above comments with a little scepticism. However, it is not beyond the bounds of possibility as this article produced by Leonard Melman explains. (Leonard Melman is a leading metal exploration, mining and investment authority, and has been writing regarding precious and base metals for more than two decades as monthly columnist for California-based "ICMJ's Prospecting and Mining Journal" and Vancouver's "Resource World Magazine".)
The report was commissioned by Silverado recently and compiled by Thomas K. Bundtzen, President, Pacific Rim Geological Consulting, Inc. of Fairbanks, Alaska.
Silverado had this say: “This professional, independent NI 43-101 Report has assessed the company's activities and resources for 2007, and is subsequent to the 2006 Report also produced by Thomas K. Bundtzen, President of Pacific Rim Geological Consulting, Inc., (PRGCI) of Fairbanks, Alaska, USA. Mr. Bundtzen is one of the foremost placer mining consultants in North America, Scandinavia and Russia. The following are direct quotes from the Report, which can be found in its entirety on the Silverado website here. "The writer regards Silverado as the most competent underground placer drifting company active in Alaska today."
If you are a fan of Silverado then this report makes interesting reading. As a risk/reward play in the precious metals sector it id certainly worth some consideration, whether we will see it trade at $0.80 or not remains to be seen. However, unlike a lot of junior exploration stocks it has not just been formed and has been in existence for over forty years. They are also producers so do have some cash flow.
Do try and find the time to read this report it’s worth the effort in our humble opinion and at $0.05 a share it is certainly cheap at the moment. The summer doldrums are on the horizon so you may wan to wait for an even cheaper entry point!
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