WSG News Part Two21 Feb 2011 16:53
First Majestic Silver, in which Woodburne holds 18,700 shares valued (on the close on Friday 18th February) at C$261,987 (£163,408), is a TSX listed silver producer at three mines in Mexico. The company had net production of 7,024,055 ounces of silver equivalent in 2010 and is targeting 7.5 million ounces in 2011. The company has defined NI43-101 resources across 5 projects and, with an expanded exploration budget for 2011, anticipates releasing a new resource statement towards the end of 2011 or early 2012.
The third holding is in Great Panther, which, like First Majestic, is operating in Mexico and listed on the TSX. Woodburne's holding of 124,000 shares is currently valued at C$373,992 (£233,269). Great Panther is producing from both its Guanajuato and Topia mines with output from the former 1,433,555 ounces of silver equivalent in 2010 and output from the latter 822,247 ounces of silver in the same 12 month period. Ongoing drilling is looking to define new resources at Guanajuato while the company has a near term production target of 3.8 million ounces of silver equivalent by 2012.
Another Mexican operating silver company Woodburne has invested in is Kootenay Gold which has prioritised the development of its 100% owned Promontorio silver mine. Woodburne has 265,000 shares valued at C$294,254 (£183,534) in the TSX listed company which, simultaneous to its own development of Promontorio, is seeing good progress being made at several of its joint ventured projects also in Mexico.
The final investment in Woodburne's portfolio is 11,700 shares valued at C$452,541 (£282,262) in TSX listed Silver Wheaton. Promoting itself as 'the world's largest silver streaming company', Silver Wheaton currently has 14 silver purchase agreements and 2 precious metals agreements which gives it the right to purchase future production at a fixed price.
The above commentary has simply looked at the current value of Woodburne's portfolio without assessing the factors driving its future potential value. Ascot Mining is the hero asset currently held and with the warrant's already deep in the money, could be realised for a handsome profit immediately. However, Ascot, which should be producing at a monthly rate of 1,200 ounces of gold by March, is looking to double this by the middle of the year. The company's ambition is to become a 60,000+ ounce per annum producer and with operating costs below $400 per ounce and major development plans at 5 concessions, there is tremendous share price upside. As silver producers, First Majestic and Great Panther will undoubtedly benefit directly from a rising commodity price, but also their respective drilling programmes aimed at increasing defined resources. Also driven by resource definition will be Kootenay Gold which current ly has in excess of $320 million of metal in the ground at Promontorio. At the opposite end of the spectrum is Silver Wheaton whose performance is entirely tied to the silver price