Sunday, May 06, 2007

Silver Standard (SSO) AGM - May 4/07

The following AGM was attended by a friend of the AGM Reporter and this is his report (he did tell me to include this little tidbit - Rick Rule was in attendance - google him).

Robert Quartermain, President and Director, chaired the meeting. The number of Directors was fixed at 6 and Price Waterhouse Coopers was retained as the auditors. Robert Quartermain has been with the company for 22 years.

It was the last meeting for Ross Mitchell who has been a Director for 10 years. Absent from the meeting was Sarbanes and Oxley (Joke!). Jonathan Singh was brought into the company to handle the reporting requirements under the Sarbanes Oxley Act under US laws.

Following the formal portion of the meeting was a slide show.

The theme of the meeting was:LEVERAGE

Silver Standard controls the world's largest public in-ground silver resources of any publicly-traded silver company. Silver Standard has just recently celebrated its 60th anniversary and the company gave a lot of silver souvenirs. Silver Standard has 30 subsidiary companies.

Silver Uses

-Best electrical & thermal conducts
-Natural biocide
-Strength & fluidity
-Highly reflective

SSO's revenues are:

57% Silver
10% Gold
7% Tin
18% Zinc

Comparing SSO with its peers, SSO is undervalued when looking at the Market Cap/Reserves & Resources

Core Asset Property Highlights

Pirquitas, Argentina Property

Silver (million oz.)
Proven 20.5
Probable 86.6
Measured 2.5

Annual production of 9.6 million oz. over 8.8 years with capital costs of about $146 million and construction expected to take 21 to 24 months.

Open pit and infrastructure includes a nearby air strip. A lot of locals are employed and 200 to 300 individuals are housed on-site. The project's energy requirements are met by gas fire co-generation. The project is located 850 km by road from port of Antofagasta in Chile and about 2,000 km by road from the port of buenos Aires in Argentina. Selling Indium as a by-product.

San Luis, Peru Property

San Luis is 55% joint venture with Esperanza Silver Corp. and potential 80% interest. Paid 1 to 5 cents per oz. for this high-grade gold-silver prospect and is the property is located within 20 km of Barrick's Pierina Mine. The main vein is the Ayelen vein. There is 1 drill on the property and another is coming. This is the next project to fast track. Gold is a by-product and forward selling of gold is being considered.

Pitarilla, Mexico Property

Open pit and property covers 29,680 hectares. There have been five zones of economically significatn silver mineralization have been identified. Throughout 2006, drilling has been focused on the Breccia Ridge and South Ridge deposits and massive sulphide mineralization has been discovered. The 2007 exploration program will continue agressive drilling on the Breccia Ridge and South Ridge zones with five diamond drills.

Diablillos, Argentina Property

Paid $3,000,000 for this property which was discovered in the 70's. There are 7 mineralized zones and the Oculto Zone is the largest. Metallurgical testwork done by Barrick indicated a open pit mine with approximately 7.0 million oz of silver and 70,000 oz. of gold per year.

Snowfield, BC Property

27 drill holes have been completed mineralization indicates gold and silver near surface and copper and moly at further depth. In 2007, 15,000 meter drill program is planned to expand the known mineralization.

The slide show had a lot of "Google Earth" shots of the different properties with zooming-in special effects.

The goal of the SSO is 30 million oz annual production by 2012.

There was 229.6 million in CASH on the Balance Sheet as of December 31, 2006.

Q & A:
SSO Shareholder: Are you having problems finding quality geologists?
Quartermain: Are you looking for a job?
SSO Shareholder: No, a general question.
Quartermain: We are not having any problems finding quality geologists. We have been very lucky since we have a very good portfolio of properties.

AGM lasted about 45 minutes and people in attendance were over 80% SSO people with a handful of retail shareholders and broker/analyst. Total attendance was about 30. Coffee, tea and water was served as refreshments.

Thursday, May 03, 2007

Goldcorp (G) AGM - May 2/07

Goldcorp AGM May 2/07

You know this AGM would be different when you sign in and get the once over by the no-neck-with-buds-in-ear brigade. Huge security presence. Maybe they’re expecting their arch enemy shoe-bomber-Osama-McEwen to show up. After all, this is the Hyatt, where a few years ago, protesters dumped a load of manure at a forest company’s AGM.

Chairman Ian Telfer presides but before he finishes his official spiel, a lady raises her hand to asked if he would tell the truth about Goldcorp’s (inherited from Glamis) poor social record in Guatemala and Honduras. Apparently, there are land issues and blockades at Marlin in Guatemala. The lady protester brought along two of the indigenous people to the AGM to talk about the conditions there. At San Martin in Honduras, there are contamination and health problems. They asked if the town will ever have clean water - will they make things right before Goldcorp leaves.

CEO Kevin McArthur responded, in his opinion, they have a great relationship with the community. He said they have talked with all the stakeholders but you can’t please 100% of the people 100% of the time.

McArthur talked about Goldcorp’s 5-year plan of having 50% or better production growth and cash cost of under $200. Currently, they are 100% unhedged for gold but they do hedge copper and silver. Matter of fact, they have sold 25% of their silver to Silver Wheaton, a company in which they hold 49%.

During the Q&A session, the impassioned plea by the protesters must have made an impression as most of the shareholders’ questions referred to the protesters plight. Looked like they won the hearts and minds of some of the shareholders (unless they were plants) and of course, the silent majority who just wants to make money sat there quietly, taking it all in.

Goldcorp’s powerpoint presentation was just about the numbers. Contrast this with the Pan American Silver (PAA) AGM two days earlier where Ross Beatty went out of his way to tell how much a safety record award meant to him. And at the safety award event, PAA gave each mining employee a special silver coin. They also did a lot for the community around the mine.

Listening to all that made me hungry. Lucky for me, there was a reception in the next room where sushi, brushetta, shish-kebab, dessert, beer and wine were served. Same time next year.

Tuesday, May 01, 2007

Pan American Silver (PAA) AGM April 30/07

Amid the packed ballroom at the Met Hotel, Ross Beatty presents a gift to fellow co-founder John Wright. Wright is leaving the board while Beatty is to become a non-executive chairman.
Eight directors are voted in - including John Wilson (ex-CEO of Placer Dome) and I believe three from Seattle including Bill Fleckenstein (MSN Money writer, with his own investment company) & Michael Larson of Cascades LLC (looking after the Gates interest, I suppose?)

A slide show of 4 different celebrations (ribbon cutting, presentation of safety awards, etc) at 4 different mines in Mexico, Peru, Argentina and Bolivia is presented. At the Mexico site, a local archbishop is blessing the problematic filter system. (At least, they'll have the NGOs on their side). In Bolivia, where the government is increasing the tax, their local managers have been successful in getting the tax stalled.

The slide shows do show the isolation and poverty of these places. Kudos to PAA for attempting to change the people's situations.

On the production side, they will produce 17M oz of silver this year, hoping to hit 25M next year. The meeting was short and sweet, but I wonder about the Wright departure and the Beatty switch to non-executive chairman. The last non-exec chairman noted in our AGM reports was Ian Telfer at UUU and we know what happened afterwards.