Silver and Coeur d’Alene Thursday, July 10, 2008
Posted by ei-forum in Commodities, Interesting Charts.trackback
In our series on interesting charts, today we look at the evolution of the price of Silver and that of CDE.
From the Coeur website:
Coeur d’Alene Mines Corporation is one of the world’s leading silver companies and also a significant gold producer. Coeur, which has no silver or gold production hedged, is presently constructing two of the world’s largest silver mines – San Bartolomé in Bolivia and Palmarejo in Mexico; operates two underground mines in southern Chile and Argentina and one surface mine in Nevada; and owns non-operating interests in two low-cost mines in Australia. The Company also owns a major gold project in Alaska and conducts exploration activities in Argentina, Bolivia, Chile, Mexico and Tanzania. Coeur currently expects to produce approximately 16 million ounces of silver in 2008, representing nearly a 40% increase over 2007 silver production levels.”
As already discussed, in previous post on CDE, this company gives investors a change to participate in the inevitable increase of silver prices due to the fact that the world has nearly run out of silver and it is also interesting as a hedge against the economic downturn and current market conditions.
Despite recent turmoil and general speculation about the quality of the management team, is the sell-off justified?
The above chart clearly shows that whilst Silver tracking ETFs have remained relatively stable after the march sell-off and have been slowly recovering, CDE is continuing to dive…
We somehow feel that this situation will not last and that we will see a reversal. Stay tuned for more.
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The value of the stock (CDE) has been excessively diluted by, IMHO, irresponsible and incompetent management. The huge float allows investment banks and hedge funds to short the stock without any fear of a significant “short squeeze”. I am not a paranoid conspiracy theorist, but in this case, I think that there has been collusion between financial institutions. For example, about a month ago something very strange occurred After Hours about five minutes after the market closed. The average daily volume is around 15 million. On that day, CDE traded around its usual volume. Then, at around five minutes after the close, TEN million shares were traded in about three minutes. This type of huge block exchange could only have occurred between two large institutional investors.
Watching this stock at the moment and was expecting it rise given silver is up 50 cents today, but nothing so far. Definitely looks cheap to me.
It had a decent run yesterday… time will tell but all in all, it does look pretty cheap…