Our new silver stock suggestion is U.S. Silver Corporation currently on the TSX Venture exchange at $0.28 and on the pink sheets at $0.27.
USA owns and/or operates the Galena, Coeur, Caladay and Dayrock silver-lead-copper mines in Shoshone County, Idaho, with the Galena mine being the second most prolific silver mine in US history.
Total silver production from USA's mining complex has exceeded 217 million ounces since 1953. USA controls a land package now totaling approximately 14,000 acres in the heart of the Coeur d'Alene Mining District. USA is focused on expanding the production from existing operations as well as exploring and developing its extensive Silver Valley holdings in the Coeur d'Alene Mining District.
In the first half of 2010, USA produced 1,198,452 ounces of silver and generated revenues of $29.5 million. USA was profitable with net income of $0.6 million and cash flow from operations of $4.9 million.
USA has 252.2 million shares outstanding giving the company a market cap at $0.28 of $70.6 million. If you annualize USA's revenues from the first half of 2010, they are on track to generate revenues this year of $59 million. This means USA is trading for only 1.2 times their first half 2010 revenues annualized.
USA's Galena Mine lies in the heart of the Coeur d'Alene Mining District, the most prolific silver district in United States history with over 1.2 billion ounces of silver production. The Galena Mine ranks as the second largest primary silver mine in US history.
USA acquired the Galena Mine and Mill, along with the Coeur Mine and Mill and the Caladay Project, from Coeur d'Alene Mines Corp (CDE) on June 1, 2006. CDE was NIA's stock suggestion on May 3rd at $17.92 and it hit a high on Friday of $19.27 for a gain of 7.5% so far.
CDE generated $189.3 million in revenues in the first half of 2010 or $378.6 million annualized. With a market cap of $1.67 billion, CDE is trading for 4.41 times their first half 2010 revenues annualized. That same ratio would value USA at $1.03 per share or 268% higher than its current price of $0.28! Also keep in mind that while CDE is losing money, USA is profitable!
CDE has $218.8 million in debt, but USA is completely debt free! USA ended the last quarter with $2.3 million in cash, $61.5 million in total assets, and $51.6 million in shareholder equity. USA's producing properties are 100% controlled by the company and they do not owe any royalties to anybody!
USA just announced on September 8th that they will be raising $6 million in a private placement at $0.26 per share. This deal is expected to close on or about September 29th. USA will be using some of these funds for the redevelopment of the Coeur Mine, which currently isn't producing but could greatly increase USA's silver production in the future!
USA recently rehabilitated the Galena shaft at their Galena Mine and will now be producing silver from two shafts at the mine! This means we could see significant growth in USA's silver production in the second half of 2010. In fact, USA is now projecting that 2011 production will reach 3.3 million ounces of silver, and this is not including silver equivalents from the production of lead and copper!
Let us stress to you again, USA's closest comparison is CDE (USA acquired its properties from CDE) and if USA trades with the same price/sales ratio as CDE based on revenues in the first half of 2010 annualized, USA would be worth $1.03 per share or 268% higher than its current share price of $0.28. NIA has already seen one of its silver stock suggestions from last year gain by over 268%.
On February 26th, 2009, NIA suggested Silver Wheaton (SLW) to you at a price of $6.74 per share and it reached a new 52-week high on Friday of $25.56 for a gain of 279%. Silver is getting ready to break $21 per ounce and USA has been producing silver at an unbelievably low cost of $12.68 per ounce. The upside potential for USA is simply enormous!
Our legal disclaimer: http://inflation.us/legaldisclaimer.html
(A co-founder of NIA has purchased 2,500 shares of CDE and could sell them at any time. Neither NIA nor its co-founders currently own any shares of USA. If we decide to purchase USA shares in the future, the amounts purchased will be fully disclosed at the bottom of our USA profile on Inflation.us. NIA has a strict policy against purchasing shares in any of our stock suggestions before our stock suggestions are made public. Any positions we own in our stock suggestions are always purchased long after our profiles are released to the public and they are always fully disclosed at the bottom of our profiles on Inflation.us.)
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