Something's Gotta Give

Come across a nice chart from a leading silver junior producer.  If you've followed the junior silver market, you are probably somewhat familiar with the name.  The company I'm talking about is Great Panther Silver.  This is by far one of my favorite junior silver miners.

It used to only be listed on the Toronto exchange under the symbol GPR.TO, and as an American you had to buy it on the pink sheets.  However, it has gotten a listing on the AMEX and goes by the ticker GPL, and is easily bought now.  This happened in Feb of 2011

Taking a look at the longer chart view using stockcharts.com, you can see what that did for the stocks volume starting in that month.  This stock is now on the radar of many more funds and many more individuals as they can buy this farily easily.

What has me interested right now is the following chart.  Since December, it has been trading in a range, or what I call a box below in the chart.  It consolidated for 2.5 months, before breaking out of the range.  I might add, it was due for a breather, based on the previous chart. So, it finally broke out of the trading range, and has now formed a nice consolidating wedge formation.  This acts as a spring, and I think it will launch out of this formation quite soon based on the chart.  It could go either way, but I believe this is a continuation pattern, and will break with the trend, which is up.  The cherry on the top is that the MACD looks ready to cross on an upward trajectory.  I view this as bullish as well.  A lot of silver charts have formed inverse head and shoulder patterns lately (see prior post "Danger Will Robinson" in this blog), but this one has chosen a consolidating wedge.  I think it's different because this silver panther is stronger and a leader of the others.

 

Not only does this stock have a great chart, but it has great fundamentals as well.  The share structure is not stellar at a 133 million fully diluted shares, but I have seen a lot worse.  Take Aurcana Silver, I think they currently have over 600 million fully diluted shares.  That's a huge difference.

They have increased revenues from around 500k in 2006 to around 2.2 million in 2010.  For 2011 and 2012 they are estimating around 2.8 and 3.7 million.  Not a bad track record of turning ore into cash.  They currently have a good mix of 71% silver, 20% gold, and 9% lead and zinc.  So, 91 % of their production is in the real money of  today.  Some silver producers have mix of silver, lead, and zinc, but this is much better.

Cost per ounce is around 6.50 - 7.50 net of by products, and they have net income of 5 million.  There business model is to get into production quickly and use the proceeds to supplement exploration, development, and acquistion.  That is the best way to do it to not dillute your share structure, and give your shareholders the best opportunities for gains down the road.

Good presentaton on their website at the following address:

http://www.greatpanther.com/s/Presentations.asp

Looking at the current chart technicals and the fundamentals, I think this is a good time to pick up a quality producing silver junior named Great Panther Silver.

FD: I own this stock.  I have not been paid for writing this article.

Until the next time...

Fiat Doubter