Review of Shoshone Silver Mining Company(OTCBB:SHSH)
Why I Believe It Is Currenty Undervalued
Why I Believe It Is Currenty Undervalued
Ticker Symbol: SHSH
Date of this Report: 12/12/07
As of September 30th, 2007, there were 19,396,679 shares of common stock issued and outstanding fully diluted.
As of September 30th 2007 there are 80,000,000 common shares authorized.
Web site address http://www.shoshonesilvermining.com/
Current Share price: $0.26 as of 12/12/07
Current Market Cap is $5,043,137
History
Shoshone Silver Mining Company was founded by the late Irvin Scheller in 1969 as a silver exploration, development and production company based in North Idaho. Shoshone operated its three Lakeview District Mines and Lakeview Mill successfully producing silver, gold and base metals for much of the two decades that followed. As silver prices declined into the early 1990's, Shoshone closed much of its production and shifted its policy towards acquiring new properties and diversifying its interests.
Irvin Scheller believed there was great but unproven potential in the Lakeview District. Due to Mr. Scheller's efforts, Shoshone obtained its initial Lakeview holdings from Sunshine Mining.
Past Producer
Not only is Shoshone Silver Mining an exploration company, Shoshone is a past producer. Shoshone was an active producer from approximately 1970 to 1990. The following properties were producing mines that can be put back into production quickly.
Conjecture Mine: Active from 1913 to 1956
Idaho Lakeview: Active from 1916 to 1956
Weber-Rainbow: Active from 1890 to 1981
Keep Cool: Active from 1927 to 1954
Click Here to view the Complete Summary of Past Production With Quantities of Minerals Mined
Current Projects
Shoshone Silver Mining is a silver exploration company and most likely a near term producer of silver from multiple sources. In addition to exploring for silver, they hold properties with exploration potential for Gold, Zinc, Lead, Platinum group metals, Copper, and Uranium and Gallium. In all, Shoshone controls over 6000 acres of land in the western US and Mexico, and has no long-term debt.
The following is a summary of Shoshone Silver Mining current projects: (Click on a property or property group for more information)
Shoshone Silver Property Summary
Properties by Class: Showing Number of Acres & Types of Metals
Lakeview District 1,100 acres containing Ag, Au, Cu, Zn, Pb
Zacatecas, Mexico 3,284 acres containing Ag, Zn, Pb
Silver Valley 552 acres containing Ag, Cu, Pb
Platinum Group Metals 700 acres containing PGM, Ag, Au, Cu, Pb
Arizona Gold 460 acres containing Au
Montana Gold 120 acres containing Au
Nevada Uranium 860 acres containing U, Ga
Properties by Class: Showing Number of Acres & Types of Metals
Lakeview District 1,100 acres containing Ag, Au, Cu, Zn, Pb
Zacatecas, Mexico 3,284 acres containing Ag, Zn, Pb
Silver Valley 552 acres containing Ag, Cu, Pb
Platinum Group Metals 700 acres containing PGM, Ag, Au, Cu, Pb
Arizona Gold 460 acres containing Au
Montana Gold 120 acres containing Au
Nevada Uranium 860 acres containing U, Ga
Current Estimated Reserves
Only three of these properties (Bilboa, Lakeview, Conjecture) have any type of estimated or proven and probable reserves from what I can find. Here they are:
Bilboa, Mexico:
Zinc - 54,320,000 Lbs
Lead – 33,460,000 Lbs
Copper – 3,640,000 Lbs
Silver – 2,186,100 oz
(Calculations based on Shoshone’s 25% ownership of the project
Lakeview Mine:
Silver 285,442 oz
Does not include copper, lead and zinc values
Conjecture (Conjecture Mine Estimate Information)
Silver 8,330,800 oz
Zinc 42,360,000 lbs
Lead 7,060,000 lbs
Totals From Bilboa, Lakeview & Conjecture:
Silver 10,802,342 oz
Zinc – 96,680,000 Lbs
Lead – 40,520,000 Lbs
Copper – 3,640,000 Lbs
(Note: These are the calculations that I came up with based on the information I reviewed. Please do your own calculations and due diligence and do not rely on my figures. These figures are based on estimated resources from the company’s website, Chester Mining Company’s website and from it’s joint venture partner’s web site, Minco Plc., as interpreted by me)
At current prices for silver, zinc, copper & lead, the above resources alone are valued at approximately $360,000,000.
Lakeview Mill
Shoshone owns the Lakeview Mill that is located on its Lakeview property. There will be no major costs associated with building a mill to process ore. They have just completed a renovation of the 100-ton per day facility and made many upgrades. As of September 20, 2007, it has just been put back into service. The mill is currently processing previously stockpiled material mined in the Lakeview District. Shoshone is continuing to upgrade and expand its flagship Lakeview mill and expects to continue processing this stockpiled ore through the beginning of the 2008 season.
The facility will also be available for the custom milling of ores produced by other companies in and around the Lakeview district as it was in the past. Shoshone plans to aggressively market this service to regional mining companies. This is very valuable, as Shoshone will not have to raise capital to finance the construction of a mill to process their ore.
Investment Portfolio
An additional feature of Shoshone is that it holds an active portfolio of investments in other mining companies primarily from the Silver Valley. Following is a list that shows Shoshone’s current investment portfolio as of their most recent filing.
The following summarizes the number of common shares owned and available for sale at September 30, 2007: (Click HERE to view the most recent 10-QSB)
Chester Mining Company (CHMN) 2,500 shares
Gold Crest Mines (GCMN) 687,050 shares
Kimberly Gold Mines (KMGM) 321,500 shares
Merger Mines Corp (MERG) 10,000 shares
Metropolitan Mines Limited (MEMLA) 6,000 shares
Mineral Mountain Mining & Milling (MMMM) 5,000 shares
Sterling Mining Company (SRLM) 19,334 shares
This gives Shoshone additional upside potential via its precious and base metals stock holdings. Many of these companies are traded on the pink sheets or bulletin board. Sterling Mining was recently listed on the TSX Venture Exchange.
Late Stage Exploration
Shoshone Silver’s Bilbao silver and base project in the Zacatecas Mining District is in late exploration stage with its JV partner Minco PLC. (Minco site Bilboa Project Details HERE)
(Bilboa Information from Shoshone HERE)
From Pink Sheets to OTCBB
On August 23, 2007, Shoshone Silver Mining was listed on the OTCBB operated by NASDAQ. This is a move up from the pink sheets that I see as a positive moving forward.
Summary
In Summary, Shoshone Silver Mining (SHSH) is a precious metals exploration company with a portfolio of past producing properties as well as other carefully selected properties with new exploration potential.
Shoshone’s Bilboa project is a late stage exploration project with its joint venture partner Minco Plc.
Shoshone has an operating mill so no financing is required to build one. Shoshone is currently processing stockpiled ores from their Lakeview Mine in their newly refurbished Lakeview Mill for future cash flow. Shoshone plans on profiting from contract milling activities for other local mining companies as they did in the past.
Shoshone has an investment portfolio consisting of common stock in other precious metals mining companies that provide potential for upside appreciation in value as well as a liquid asset that can be used for cash flow as needed.
Shoshone has no long-term debt or off balance sheet arrangements. Shoshone’s current market cap is very low compared to the value of its estimated mineral resources, existing mill and infrastructure, existing portfolio of investments, many properties with historical production and future exploration potential.
Disclosures:
I currently own 57,200 shares of SHSH
No one has paid me to write up this report or send it to anyone. This review is an independent report by me and the opinions expressed are mine alone. All information used to compile this report was gathered from sources linked to throughout the article. I make no guarantees as to the accuracy of the information in this report but I have compiled it in good faith to the best of my ability. Do your own due diligence. I am interested in seeing the price of Shoshone common stock increase in value, as it would bring me personal financial gain. Shoshone Silver Mining is a penny stock and the risks associated with investing in penny stocks are many. Then again, the rewards can be great.
Michael H. Harader, CPA
Scottsdale, AZ
