Silver down Mexico way

Dec 14th, 2009 – Comment

When I looked at the charts they gave me the incentive to look deeper into the opportunity.


About the Author

Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


Read the author's full profile.


Further Research

Read more about Precious Metals.


great-panther

Hi Lou

What can you tell me about Great Panther Resources (GPR TSX). I purchased 300 shares.

Thanks,
Jim

Hi Jim,

Your question  regarding Great Panther Panther Resources Ltd. ( GPR TSX) was my first introduction to the company and I saw it for a second time in a recent issue of Fortune Magazine where GPR bought a small ad. When I looked at the charts it gave me the incentive to look deeper into the opportunity.
gprThe three year chart is of interest because of a number of factors. A bounce off a hard bottom with an intact trend line supporting the advance. A golden cross appearing in May of 2009, just above $0.40,  also provided the base for further enquiry.

GPR has two operating silver mines in Mexico and has met its goal of becoming cash flow positive on its operations. The company has reported three successive quarters of positive cash flow that were the results of a mandate to increase production to reduce per unit costs.

Through 2012 GPR intends to reduce its cost per ounce of silver to $4.00 and increase output to 2.66M oz. from 1.45M today. The Guanajuato Mine offers explanation potential because of low utilization of its plant and the company intends to deep drill during Q1 2010 in an effort to further expand the resource base on the property. The company has about $15M in cash and is on the lookout for acquisitions.

GPR has also gotten itself on the radar of a number of analysts and newsletter writers which has helped keep average daily volume over the last year above 390,000 shares. Over the last three months the average daily volume has come it at over 700,000 shares a day.
GPR2The three month chart gives a view of the range bound pattern that has emerged since September of 2009 with support at $0.70 and resistance at $0.90. Since September there has been positive news reported regarding drilling activity and a financing but investors have been in a consolidating mood with buyers and sellers in balance.

At these levels GPR offers an attractive entry point for investors who can tolerate the risk profile inherent in the story and anticipate further increases in the price of silver.

Happy Capitalism!

Categories: Precious Metals
Content © Relentless Economics - Charts courtesy Stockcharts.com - Employees Entrance - Optimization Media