Wednesday, August 31, 2011

When life hands you lemons...

For those who do follow Silver, one of the most frustrating elements over the past year and a half has been the disappointing performance of shares in Silver mining companies.

While Silver rose from $15 to almost $50, mining shares have (for the most part) not performed quite as well.

Interestingly it is not just the spot price of Silver on the COMEX that is heavily shorted by the banking cartel to support the US dollar.  Mining shares also receive the same treatment.

And mining company CEO's are showing signs of signifcant frustration with the practice.

Last week the Globe and Mail reported that the management of Silvercorp Metals (TSX:SVM) recognizes the blatent short manipulation going on with their stock and they plan to take action by buying up their own stock and cancelling the shares.
  • "The Company is purchasing its own shares because it believes that prevailing market conditions have resulted in Silvercorp's shares being undervalued relative to the immediate and long term value of Silvercorp's portfolio of producing and development properties in China and Canada. The Company notes that the short interest position in its common shares has climbed from 3.6 million as of July 29, 2011 settlement date to 9.6 million as of August 15, 2011 settlement date, the most recent date for which short interest data is known by the Company. Under the existing NCIB the Company intends to acquire up to 10 million common shares. All common shares purchased under the NCIB will be cancelled."
Yesterday the well established Pan American Silver Corp. (TSX: PAA.TO) came out with a similar announcement.
  • "Pan American is undertaking the Bid because, in the opinion of its board of directors, the market price of its common shares, from time to time, may not fully reflect the underlying value of its mining operations, properties and future growth prospects. The Company believes that in such circumstances, the outstanding common shares represent an appealing investment for Pan American since a portion of the Company's excess cash generated on an annual basis can be invested for an attractive risk adjusted return on capital through the Bid."
The CEO's of these corporations are saying that they have had enough and are starting to fight back.  They are basically telling the manipulators that they are preparing to eat up their own shares until they squeeze the shorts like lemons in a juice press.

This represents a non-conspiratory side to the naked short selling argument for you.

Yesterday Ted Butler laid out for you that conditions are mounting for a significant 'Silver Accident'.

And now the mining companies are adding another element to that equation.

The writing is on the wall.

It is only a matter of time before the manipulated paper game hits the wall.

And when it does, Silver is going to move parabolically truly making it the manifestation of what Eric Sprott called the Opportunity of the Decade.

Lemonade anyone?

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  1. I own PAAS and this is good news. These shares are incredibly undervalued.

  2. Could someone pass this post on to Garth Turner, who insists that the financial markets are not manipulated.

  3. Lemonaide > Lemonade

    ...Ted Butler laid out for you have conditions... > ...Ted Butler laid
    out for you THAT conditions...