Time to Look at Silver
Paul is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Title: Time to Look at Silver Dear Investor, Because of all the buzz that has exploded about smartphones particularly the resounding success of Apple’s iPhone 5, we tend to overlook the rumblings and telltale signs of equally colossal surges that appear to be overtaking us everywhere. It doesn’t matter where you look, whether at the whole economy, employment, housing, consumers, smartphones, minerals. Every stock is showing a green + instead of the usual red – . The trend is a sure ‘heads up’ signal for serious thinking to BUY, but to BUY with deliberate and conscious selection of your stock. The time couldn’t be better with most stocks registering prices at the low end of the scale. Companies like Morningstar are cashing in as early as last month, getting rid of decadent stock and buying into new ones. You can also bet your bottom dollar that the smartphone gig is not going to dampen but rather it’s going to surge forward and pick up speed as the lower ranking phone companies go all out to find a ‘just as good’ or ‘better’ phone than Apple’s iPhone 5. We are going to see a neck-to-neck race between these phone companies. A sure look out for the next couple of years if not sooner! One development that has caught my attention is SILVER. We all know that investors are very comfortable with GOLD and once they put their wealth there, it takes more than the power of a second Titanic to budge them and relocate their investments to other stocks . This is understandable but in stock trading terms, it can translate into an irretrievable loss, all the more so since over the last 12 months, gold prices have risen to 29% while the price of silver has jumped 178%. It is time to look at silver companies. One silver company that is worthy of our attention is Orko Silver (TSX-V: OK). The strategy used by this company is reminiscent of the same kind of approach employed in the search for iron ore in the Hamersley Ranges of Australia – millions spent on exploration which paid off. Orko Silver, which is located in Mexico, is employing the same tactics and it is confident that it will succeed. We should join it in its optimism for the following reasons: 1. Using its very strong experience in the exploration of mineral, the company ascertained the potential wealth still stored in the La Preciosa property in Durango Mexico and acquired ownership. 2. Over a five year period, using modern exploration techniques, the company increased the output capacity at the La Preciosa mine from 3 million ounces to 146 million ounces of silver, a increase of 4,700%. Only last year, because of this dynamic escalation in output, Orko’s stock jumped from $0.05 to nearly $3.20, a 6,289% jump, but hardly an insurmountable hurdle in terms of buying into the company. 3. Realizing the huge potential of the mine and suspecting that silver veins must surely exist in abundance around the area, Orko enlisted the support of a big player in the game by taking on board Pan American Silver (NASDAQ: PAAS) in 2009 as its partner in a joint venture. It took Orko 4 years and over a hundred thousand feet of drilling to convince Pan American Silver that it was on the right track. 4. As expected, the same group of miners who ascertained the potential of La Preciosa went ahead and formed another exploration team and cornered a site 60 miles north of La Preciosa. It promises to be larger that La Preciosa with more silver veins reputed to be in the running to produce over 100 million ounces of silver. 5. Orko is a progressive mining company. It is active and aggressive in its approach to exploration and is set to be a winner. It is getting offers from six other companies all clamouring to become partners in joint venture operations. 6. The current share price for this small but lucrative company is a mere $0.80 7. The new team of mineral explorers have just begun to drill their first hole and share prices are sure to hit the ceiling when the first drilling data starts to roll in. 8. Despite the fact that there is no such thing as silver occurring purely on its own but is made up of an assortment of minerals like copper, lead and zinc and that prices of these component minerals differ from that of silver and can cause a dragging down effect on silver prices, the drag hardly matter when Orko Silver is all set to churn out huge quantities of the minerals at a rapid pace, especially the silver. So fellow investor, there you have it all on a plate and everything points to ONE thing: We need to think seriously about BUYING stocks in Orko Silver (TSX-V: OK).
Slowly but surely getting there.