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Wildcat Silver Looks Like a Winner
By James West
MidasLetter.com
Wednesday, March 17, 2010
When a company like Wildcat Silver Corp. (TSX.V:WS) comes along, I don’t need to spend a lot of time running around researching the pasts of the directors or developing a sense of future prospects. That’s because with one look a the management team, I can rest easy knowing that I’m looking at a winner.
What makes me so sure?
Power People
Chris Jones, the president, is not exactly a household word – even in mining circles. But he has a 25 year track record in underground coal, precious metals and oil sands mining that suggests the depth and breadth of experience required to profitably operate such mines.
But the people who surround him in terms of major investors, board members, and fellow management are where the writing on the wall for the future of Wildcat is found.
Richard Warcke, the chairman, is possibly the junior investment world’s Most Valuable Player of the last year, since shepherding the shares of Ventana Gold (TSX:VEN) from $0.80 a year and a half ago to an all time high of CA$12.91 in November last year. The stock has since taken a hit since the vendors have tried to renege on the original deal, resulting in what is widely viewed as a minor hiccup in the company’s path to production at its super high grade La Bodega gold project in Colombia.
John Brodie, a former partner at KPMG, is also a director of Silver Standard Resources, (TSX:SSO, NASDAQ:SSRI) another top silver producer.
And most recently, the company hired Paul Ireland, Ventana’s CFO, who will now do double duty as Wildcat’s CFO. Ireland has also done stints for the Diavik Diamond mine in northern Canada and Western Forest Products Inc.
So there’s a team here that doesn’t just create successful companies – they consistently launch investment superstars. The presence of these guys alone justifies a substantial valuation, in my book.
Property Power
That brings us to the actual propert in the portfolio of Wildcat.
The flagship is the company’s 80% owned Hardshell Property 80 kilometres southeast of Tuscon, Arizona.
Wildcat published an updated mineral resource estimate in early 2010 which increased the size of the resource and upgraded a significant portion to the indicated category. Hardshell is now estimated to contain an indicated resource of 42.7 million ounces of silver and 1.3 billion pounds of manganese, plus an inferred resource of 37.7 million ounces of silver and 2.5 billion pounds of manganese, as detailed below:
Considering the current market cap of about CA$30 Million, its not a stretch to say this is a company flying very much underneath the radar of the investing public.
The 2007 preliminary assessment envisioned a 1,800 tonne per day open pit mining operation with an initial mine life of 13½ years. Annual production would total 4 million ounces of silver and 54,000 tonnes of manganese, and would establish Wildcat as a world-class silver producer and the only domestic manganese producer in the US. Production would also include 550 tonnes of copper and 9,000 tonnes of zinc per year. Using a conservative silver price assumption of $8.50 per ounce, the 2007 study estimated a 5% NPV totalling $295 million. All before the latest published resource estimate in January.
This is a project that is very much in the planning stages for mining, and the people behind this project should not be under-estimated. At $0.29, this company, in my humble opinion, is a steal.
DISCLOSURE: James West owns no shares in and received no compensation for this article. I just think its a hell of a deal!!
SOURCE: http://www.midasletter.com/news/110031901_Wildcat-Silver-looks-like-a-winner.php
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