Silvermex Res. / SLX (TSX)

Sieht recht vielversprechend aus.

Genco produziert schon fleißig und hat ein sehr niedriges Marketcap. ca.16 Mio

http://www.gencoresources.com/company.html

Research Report: Genco Resources

Friday, July 2, 2004.

I believe that Genco Resources represents an exceptional opportunity for precious metals investors to participate in the sector with current production, unhedged and fully leveraged to the possible rising prices for gold and silver, and robust exploration potential on their 100% controlled property in Mexico. Shares in this company can be acquired at an attractive price currently, due to the extended correction that has influenced the entire sector, and the lack of ongoing promotion. Very little information has been made available to the public regarding the exploration and development work underway at the company’s area of operations in Central Mexico, or of the potentially highly profitable operations. The key factor to successful equity investment in the precious metals sector is the ability to discover undervalued, fundamentally sound companies and acquire them late in the development stage when the risks are lowest, yet while they remain valued in the markets at levels befitting an early stage exploration project. Genco Resources fits the profile of such a company, and a sector recovery along with successful development of new resources will rapidly increase the market value of this company. I own shares of Genco Resources. – Mike Kachanovsky

Overview:

Office Address: 550-999 West Hastings, Vancouver, BC

Telephone: (604) 682-2205

Exchange Listing Symbol (TSX-V): GGC

Website: http://www.gencoresources.com/

Share Structure: Issued and Outstanding: 20,357,268

Fully Diluted: 24,240,268

Market Capitalization: $17.3 Million

Management:

At this early growth stage of development for the company, Genco appears to have the right mix of management personnel to both direct and exploit new exploration initiatives, and to provide experienced operational guidance for the mining operations. Board member Eduardo Luna has management experience with other Mexican precious metals producers Industrias Penoles and Luisman Mining. President Jim McDonald was a founding member of the management team of other junior exploration companies including White Knight Resources and National Gold Corp. Geologist Bruno Barde has been part of the discovery and development of several mines worldwide, including Mexico. It should be noted that the mine is well staffed with experienced and trained personnel.

Development Project:

On August 1, 2003 Genco acquired a Mexican mining company, La Guitarra Compania Minera for the issuance of share capital and cash. The principal asset of this company that came with the acquisition is the operating La Guitarra Mine, and the surrounding lands that comprise the Temescaltepec District. Located in the Sierra Madre Occidental Mineral Belt, considered by many to be the prime address for gold and silver development in Mexico, the property spans approximately 12,373 hectares. As is common with many other epithermal deposits, numerous gold-silver veins have been traced over a wide strike length across the property, with some of them running for several kilometers in length. These narrow veins commonly feature enriched zones of higher-grade material, and intermittent super-enriched “bonanza-grade” zones occur periodically. Although the property has seen continuous mining operations stretching back over 500 years, it is estimated that only 5% of the vein systems have been systematically explored using modern techniques.

Genco employed some modern exploration methods recently when they completed a follow up program of 3D IP surveying after a round of drilling at the San Raphael zone, southwest of the La Guitarra Mine. The drilling results were exceptional, indicating a new high-grade zone discovery, with assay results up to 33.01 g/t gold and 834 g/t silver intercepted over 8.2m. The results of the induced polarization program confirmed that the La Guitarra vein extends below a younger rock formation and could run for a length of over 7 km. Additional anomalies were discovered near the new San Raphael discovery zone, and to the northwest of the La Guitarra Mine. Encouraged by the close association of these anomalies with the mineralized areas of the La Guitarra vein, Genco announced another 2500m diamond-drilling program to test the potential for new mineralized zones and the results again featured narrow intersections of high-grade ore.

Vein swarms have been traced and mapped throughout the property and additional surveying and sampling is scheduled to continue to build the database for future drilling program targets. To the northwest of the La Guitarra mine, an abandoned mining shaft has yielded some very high-grade drill core intersections, and this area will be another priority target for future exploration activity.

Operations:

Production in 2002 consisted of 425,274 ounces of silver and 7,052 ounces of gold, from approximately 80,000 tons of ore. Recovery rates were relatively low, averaging about 82% for silver and 80% of the contained gold, recovered through a floatation circuit. Due to the prolific nature of the mineralization only limited exploration work was carried out throughout the life of the mine, to establish ore bearing zones to feed the mill. When the decision to sell the property was made by the former operators, no further funds were allocated to exploration, and the depletion of known ore bodies reduced the throughput at the mine to levels well below capacity. After Genco acquired the mine, operations resumed but only 20,338 tons of ore were processed up to January 31, 2004, well below the 330-ton per day capacity. Reported production of 140,703 ounces of silver and 1,370 ounces of gold (3535 gold equivalent ounces at 65:1 ratio) was achieved for net production costs of $1,578,071.00. With production costs averaging US $340 per ounce, La Guitarra can be considered a risky operation due to fluctuating ore grades and a low gross profit margin.

Despite the lower mine throughput since Genco acquired the mine, the company has achieved profitable operating results. The success of the project will depend on the ability of management to increase the throughput closer to the capacity of about 330 tons per day, and reduce the production costs on a per ounce basis, providing Genco with a greater margin to survive periods of low commodity pricing, while remaining fully leveraged to potential rising precious metals prices in the years ahead.

Genco believes that due to efficiencies that can be achieved through the upgrade of processes and technology at the mine, profitable operations can be maintained even with lower grade ore. Much of the historical production in the area was limited to the higher-grade portions of the deposits, and the remaining lower grade ore remains to be exploited. The potential for ongoing additions to reserves along the 15 km trend on their property holdings, like the newly discovered San Raphael zone, will result in substantially increased production levels and extend the mine life, while contributing higher-grade ore to the operation. It should be noted that La Guitarra is primarily a silver mine, and the most recent production figures show the ore processed averaged about 7 ounces silver per ton, far below the historical average grade of the ore which exceeded 9 ounces per ton. New discoveries of high-grade ore will thus yield an immediate improvement at the bottom line.

New development is focused towards completing a 4-meter by 4-meter decline at San Raphael to access the ore body discovered during the 2003 drilling program. It is estimated that by the fall 2004 mining in this zone will commence. Management is optimistic that throughput at the mill will increase to near capacity levels by the end of the 2004, while exploration activity is ongoing to identify additional ore bodies for future exploitation. The company is committed to proving up a 2-year reserve life.

The combined effects of increased efficiency in operations, additional ore production to near-capacity levels, and the processing of ore with overall higher grades, should result in substantially higher profitability for Genco during future quarters, and production costs that are more in line with the industry average.

Outlook:

Prior to the acquisition by Genco Resources, Luisman, a subsidiary of Wheaton River Minerals, operated the La Guitarra Mine. Due to the relatively low production levels and high operating costs, Wheaton River considered the mine expendable and thus Genco was able to acquire the La Guitarra Mine very cheaply. For the low acquisition cost of $5,000,000 payable in share capital they were handed the keys to a functioning mining operation and gained control of an appealing district to explore and attempt to identify new ore resources. The attractive terms of the deal, without the high capital cost outlay that would be required to establish a new mining facility, has resulted in Genco achieving the rare status of a precious metals producer with a market capitalization well below $25 million. Management’s ability to increase the efficiency of the current operations while discovering new high-grade zones of mineralization will define the success of the company in an uncertain commodity price regime.

The tightly held share structure and low market capitalization for a producing mining operation are a testament to the value in this play. With proven and probable reserves of 60,000 oz. Au and 784,000 oz. Ag, and inferred and indicated resources of 151,000 oz. Au and 36.7 million oz. Ag, the combined gold equivalent resource (65:1 ratio) approaches 800,000 ozs. Based on an exchange rate of 74 cents Canadian to the US dollar, this equates to a low market cap to resource ounce of only $16, with the potential to add significant resources as further exploration activity is completed.

Capital resources are adequate to fund the operational and exploration requirements for several quarters. The company recently completed an equity offering to raise $1,146,000 in cash and additional funds will be added to the treasury as outstanding options and warrants are exercised. The only long-term debt obligations are the remainder of the acquisition costs which are payable in annual installments of US$ 500,000 and may be settled with the issuance of shares. The company holds marketable securities in the form of shares of Getty Copper Inc. which were received as payment for a property transaction in 2003. A $1.5 million line of credit is also available as required through a major Canadian bank.

While the current operations are profitable, the potential for increased profit is achievable and realistic. Cash flow from operations will fund increased exploration activity across the large system that could lead to major new discoveries of ore deposits. While the mine facilities cannot be expanded without significant capital expenditures to increase capacity, if the company is able to generate production levels to match the 2002 production of 13,600 gold equivalent ounces, still well below full capacity, and lower overall production costs, then the operations for Genco could generate as much as C$ 2 million in gross profits even at current gold and silver prices. The cash generated internally from operations should also contribute to fewer equity offerings to raise capital, and with a low share float, will result in higher upside potential capital gains for shareholders.

A final comment is appropriate regarding the future expectations for the performance of the precious metals sector. Many analysts have commented that the market is in the early stages of a long-term secular bull run for precious metals. During previous bull market episodes, the market value of junior gold and silver producers increased exponentially. Spot pricing for precious metals is notoriously volatile. Because Genco is has not entered into any hedging agreements for the forward sale of production at a fixed price, the company remains fully leveraged to any increases in spot prices. Various sector analysts have predicted substantially higher market pricing for precious metals in the years ahead, and if this should come to pass, shareholders of junior producers such as Genco Resources will be richly rewarded. The profitable operations, combined with a speculative frenzy in the sector, would position Genco as a very attractive holding for investors.

As are all such companies within the sector, Genco Resources must be considered a very speculative investment. A high degree of risk exists due to the volatility of commodity pricing, and the uncertainty that Genco will be successful in achieving their stated objectives to increase production and reserves. This company is suitable only for risk-tolerant, sophisticated investors able to accept extreme volatility and the possible outcome of a total loss of their investment value. The objective of investors in this sector is to identify those companies that offer higher potential rewards to offset the high levels of risk. Relative to the peer group of companies in the sector, Genco Resources can be considered attractive on the basis of a superior risk/reward profile, and the potential to create exceptional shareholder value in the years ahead. Investors who believe that 2004 represents the early stages of a secular bull market for precious metals should give consideration to acquiring shares in focused and profitable producing companies like Genco Resources.

Danke Silbertaler, guter Link

http://www.gencoresources.com/pdfs/NOV-UIR.pdf

Zusammenfassung der Zahlen:

Produktion: 2004 700000 Unzen
2005e 1,2 Mio Unzen > Kgv. 3,5

Produktionskosten pro Unze 4,25 Dollar

David Morgan kauft Genco in sein Musterportfolio mit Ziel 2,8 Can $.

Since the company reports 36,000 tons of proven mineral reserves and knowing that only five percent of the veins have been explored in the Temascaltepec Mining District, the potential for discovering substantial reserves is highly probable. Based upon projections by the company starting in the middle of 2005 production should start to increase substantially. In fact the production should increase by one hundred tons per day, which is almost double the present production rate. The cost of production is estimated to be about four dollars U.S. per ounce, which would provide between two to three dollars per ounce profit if silver prices remain between six and seven dollars U.S. This would yield cash flow of 3.5 million USD. On a per share basis this would be about fourteen cents per share. Mining companies trade at twenty to forty times earnings, in most cases. GGC of course is well under this level, but taking this number we have a projected stock price of $2.80

Das Kürzel für Genco ist GGC.V

http://www.silverstrategies.com/RankingBySymbol.aspx?ranks=

Gesamtübersicht der Resourcen:

http://www.silverstrategies.co…Profile.aspx?ticker=GGC.V

Neue Zahlen:

http://www.gencoresources.com/pdfs/01-10-05.pdf

Genco Resources announced it raised C$4.3 million to further develop its La Guitarra Mine in Mexico. As I've stated before, the company is ramping up production. In fact according to my phone call with management, this past month may well have been the best production rate so far. Genco has been a company with fewer than average shares outstanding. This financing will bring it up to about 30 million fully diluted. That's still not excessive by any means.

@ Planspieler : JA

Minews Story
Date: June 10, 2005

Genco Is growing Production Of Silver And Gold At Its Own Mining District In Mexico.

The team from Genco Resources turned up at the last Minesite Forum, not to present, but to introduce their company to London investors attending the Forum over a glass of wine. That is the great attraction of these Forums , apart from the presentations. Directors of junior mining companies from all over the world know they can come and meet a fascinating cross section of the UKs mining community including Scotland and Ireland. And it can go further than that as it is not unknown for fund managers from Europe’s leading capitals to attend as well. Not every company will be as interesting as Genco, but actual producers of silver and gold in the junior sector are rare as hens’ teeth.

Not only that, but the company has 100 per cent control of a complete mining district in central Mexico which dates back to Spanish times as does the Sierra Madre Occidental Silver and Gold mineral belt on which it is situated. Little modern exploration has taken place in the Temascaltepec district, but it is encouraging that Wheaton River and Penoles have mines on the belt to the north and IMMSA and Teck-Miranda to the south. The La Guitarra mine was acquired in August 2003 from a subsidiary of Wheaton River for US$5 million of which US$1 million was paid in shares and the rest is payable in annual instalments of US$500,000.

Not a bad deal, but although La Guitarra had been mined for 10 years, Wheaton River had ambitions elsewhere and the mine went into decline as resources were directed away from it. This opportunity occurred a short time after the company was taken over by its present management and changed from a bust auto company to a thriving miner.

The board is not populated by the great and the good, though great and good they may well be, but by some mining men with amazing track records and one, Edward Luna, who is President of the Mexican Mining Chamber which is a shrewd move. Richard Hughes, who joined the board recently, was a key figure in the discovery of one of the world’s largest gold mines, Golden Giant at Hemlo in Ontario. He also has notches on his belt for the discoveries of the Balmoral mine in Quebec and several others. Joseph Church did 37 years in senior positions with Inco and was involved with multiple discoveries and developments ranging from copper-nickel PGMs in South Africa, through nickel in Manitoba to the Golden Pond gold deposit in Canada. They know what they are doing and they have a project with potential to add resources and increase production through the mill.

The most recent report on production is for the three months to end October when sales rose by 43 per cent to C$1.3 million and production rose by 25 per cent to 147,966 silver equivalent ounces. Not too much to write home about at this stage, but it is positive cash flow and the company is well financed as it raised $4.3 million at the beginning of this year. The funds received from the private placement will be used to fund development projects including continued underground development of the high grade San Rafael zone, tailings expansion and the purchase of additional mining equipment, will allow increased mill throughput and better utilization of existing mill capacity. Exploration will focus on several high priority targets including the previously identified San Rafael 11 zone located 240 metres southeast of the San Rafael zone.

The La Guitarra mine is a mechanised underground operation employing cut-and-fill technology with rubber tyred haulage equipment. The immediate plan for management is to double output to 300 tonnes/day and the forecast is for production of 700,000 silver equivalent ounces in 2005 and 1.2 million ounces of silver equivalent in 2006. In order to achieve this it wants to have at least two years of reserves ahead of it and it already has a number of targets which are being drilled. The San Raphael ore zone is only just over 300 metres south east of the nearest zone at La Guitarra and the ore is high grade as it was a blind discovery which had eluded previous explorers. They tended to concentrate on the bonanza shoots close to surface that are typical of epithermal vein-type deposits. Genco is looking deeper under gravels or basalt and following blind leads where veins pinch out temporarily.

This is a good, solid company which should be around many years from now. Its shareholders may not die from over-excitement, but it should add to its resources and the number of mines operated at a steady pace. It has scope to expand production with sensible additions to the plant and who knows? It might even pay a dividend at some future date

http://www.silverstrategies.co…urces-reprint-Jun1005.pdf

Hat jemand gesehen, ob es Insiderkaeufe bei Genco gab. Habe es auf einem anderen Board gelesen, jedoch keine Quelle gefunden ??

newtechxl

Genco Resources (TSX-V: GGC)
Market Cap on 5/25/05: C$19.63 MM

Genco Resources is perhaps one of the least known companies on the list, yet it is probably one of the more deserving of your attention. We personally critiqued Genco for what we believe is “insufficient marketing and promotion” which stands in contrast to many of its peers. The management asserted that it has been a company policy to “under-promise and over-deliver”. Still the company is taking steps to address the situation and among other things launching a new web site next month (August, 2005).

So what should you know about Genco? For starters, Genco is a silver producer (with some gold credits) and is profitable at that! In the first half of 2005 the company earned about 5 cents/share net of all expenses. That is a rare feat among not only silver but even a vast number of gold companies.

Yet the good news is just beginning to flow and there is a lot more coming. To date Genco has been processing some 140 tpd (tons per day) of ore and is working to increase that to 220 tpd by the end of this year, a 63% growth. It gets better: in 2006 the company expects to go through 340 tpd and thus ramp up production to 2,000,000 of silver equivalent from 460,000 ounces in 2004. In the first half of 2005 the company already produced as much silver as it did in the entire last year.

The bulk of this growth is attributed to higher grades of both gold and silver at its new San Rafael vein. The management is rather optimistic about the prospects of this vein and has reasons to believe there are more parallel ore-shoots like it nearby. To confirm this prognosis Genco retained another drill rig that is already on the property and should start poking holes any day now. That is in addition to ongoing drilling at its main La Guitarra Mine. The company’s plan is to maintain at least two years worth of reserves at the prevailing production rate at the time. That said, Genco’s master plan is to eventually upgrade the mill to 1000 tons per day if in fact enough ore is found to support such scale of production.

The beauty of it is that all this growth is being financed from operating cashflow. The company IS MAKING MONEY TODAY and putting it back in the ground to fund the expansion. Genco has about C$2 million in the bank and has no plans for additional market financing at this time. The insiders own about half of outstanding shares and there are no cheap warrants or options hanging over the stock. In fact the management is very wary of stock dilution. For instance, a number projects the company looked at for acquisitions has been turned down because they did not offer as much value as there already is in the stock and therefore would mean dilution to existing shareholders. At the present time the company is considering five more prospects.

GENCO RESOURCES fördert da, wo andere schon erfolgreich waren! Klingt einfach, ist aber extrem effektiv, denn die Kanadier sparen damit erhebliche Kosten. Im Zentrum der Aktivitäten dieser Company stehen die La Guitarra-Mine und das Temascaltepec-Projekt in Mexiko, die man vor gut zwei Jahren für einen Spottpreis von gerade einmal fünf Millionen US-Dollar von der notleidenden Luismin übernehmen konnte. Auf dem 12 400 Hektar großen Gebiet schürften die spanischen Konquistadores schon vor rund 500 Jahren nach Gold und Silber. Kein Wunder, denn der Distrikt gehört zum Sierra Madre Silber- und Goldgürtel, das historisch zu den hochkarätigsten Gegenden der Welt zählt. Im ersten Quartal holte GENCO 240.000 Feinunzen Silber und 2240 Unzen Gold aus dem mittelamerikanischen Boden – genug, um in die schwarzen Zahlen vorzustoßen. In den ersten sechs Monaten dieses Jahres erwirtschaftete man aus einem Umsatz von 3,86 Millionen kanadischen Dollar (CAD) einen Gewinn von 662.000 CAD. Im entsprechenden Vorjahreszeitraum schrieb Genco noch einen Verlust von 916.000 CAD. Eindrucksvoll ist auch der weitere Expansionsplan:

Im kommenden Jahr will GENCO RESOURCES die Produktion auf 2,5 Millionen Unzen verdoppeln! Dafür hat man bereits mehrere Akquisitionsprojekte unter die Lupe genommen. Beobachter gehen davon aus, dass es bis zur Meldung eines Zukaufs nur noch eine Frage der Zeit sein dürfte. Auch ist die Mühle für deutlich höhere Kapazitäten ausgelegt. Aktuell verarbeitet GENCO rund 140 Tonnen Erz pro Tag. Schon im kommenden Jahr avisiert man die volle Kapazität von 340 Tonnen täglich an. Für die fristgerechte Umsetzung der ambitionierten Pläne spricht aber auch, dass GENCO sein Wachstum finanzieren kann, ohne neues Kapital aufnehmen zu müssen. Zudem liegen zwei Millionen CAD auf der hohen Kante. Für ein Engagement in GENCO sprechen auch die extrem günstigen Kosten von lediglich drei Dollar je Feinunze. Da bleibt schon beim derzeitigen Preis von 7,60 Dollar pro Unze einiges hängen. Zieht der Preis weiter an, fährt GENCO noch deutlich höhere Gewinne ein als bisher prognostiziert (WKN 868444)