Silver and Sterling Mining: What's Wrong With This Picture?

6 Month Chart of Silver ETF (SLV)

6 Month Chart of Sterling Mining Company (SRLM)

There is something wrong with this picture. See if you can find what it is.

While the price of silver is pushing to new highs, the common shares of Sterling Mining Company (SRLM) are sinking in a reverse relationship to the price of the metal it is in the business of prospecting and producing.

I find this odd for a couple of reasons. While silver prices are rocketing higher, SRLM is not showing any positive price action. This smells fishy to me as Sterling appears to be on the verge of being one of the premier silver mining companies in the world in the near future.

Sterling Mining Company has strengthened its status as one of the world's few primary silver producers by restoring the Sunshine Mine in North Idaho's "Silver Valley" to production. The Company acquired the rights to the mine and related assets in mid-2003, and officially commenced initial production in December of 2007.

Along with the Sunshine Mine and exploration properties encompassing over 25,000 acres in North Idaho's "Silver Valley" and neighboring Montana, the Company is exploring and developing properties totaling over 62,500 acres in the historic Zacatecas Silver District of Mexico.

Some recent Sterling Mining Highlights include:

Sterling Mining Company Geographically Diverse Project Portfolio

• The Company's core projects are situated in two of the world's most geologically prospective silver-mining districts, Idaho's renowned Coeur d'Alene (Silver Valley) district and Mexico's historic Zacatecas silver-mining district.

Low Geopolitical Risk

• The Company's advanced projects and newly expanded portfolio of silver properties are situated in politically stable regions with a strong mining heritage. The United States and Mexico are signatories to free-trade agreements and have laws and legislation governing investment in their mineral sectors.

Strong Technical Management

• Sterling Mining has assembled a strong technical and management team to achieve its growth plans in the United States and Mexico, including many Sunshine Mine veterans who contributed their expertise to restoring the Sunshine Mine to production.

Current Highlights

• Commenced initial production at the Sunshine Mine in late 2007.
• Assembled a team of more than 120 employees at the Sunshine Mine by year-end 2007, including many Sunshine Mine veterans.
• Secured a listing with the Toronto Stock Exchange under the trading symbol "SMQ," reflecting a strategy to raise Sterling's global profile and shareholder base. The company's shares began trading on this resource-based exchange on October 2, 2007.
• Began processing Sunshine vein ore from the Mine's Upper Country development in the newly refurbished mill in September of 2007.
• Sterling common shares began trading on the OTC Bulletin Board under the symbol "SRLM" on August 14, 2006. The company is also listed on the Frankfurt Stock Exchange (FSE:SMX).
• Completed a successful financing of US$24.7 million in August of 2007.
• Retained the independent engineering firm to complete a NI 43-10 technical report which identifies a reserve of 23.48M oz and a resource of 231M oz.
• Completed the 5,700-foot Sterling Tunnel Project, and also renovated the Silver Summit Hoist and rehabilitated the Silver Summit shaft to the 3,000-foot Level to complete the Sunshine Mine's secondary escapeway system.
• Expanded landholdings in the United States and Mexico, while continuing to explore priority projects independently or through industry joint ventures.

In the meantime, this may be a great opportunity for those who wish to load up on some shares of SRLM at bargain prices.

Disclaimer: I own shares of Sterling Mining Company (SRLM) and stand to make profits on a rise in the common shares of this company. Do your own due dilligence before you make any investing decision including this one.

Silver Getting Ready to Move Higher

Silver is getting ready to move higher very soon. At least that is what I believe. Silver and Gold have been consolidating their large gains for a long time now and appear to be on the threshold of major moves upward.

It is interesting to note that according to the Resourse Investor, the Silver ETF has already taken 15% of the world silver supply off of the market. This is pretty huge. I don't know if their numbers are correct or not, but the point is that Silver is scarce and getting more scarce.

A second Silver ETF was started in Germany recently. This will take more silver off of the market as well. The last time silver started a major run up from a breakout of a triangle pattern, it moved up 100% over approximately 6 months.

This time may be no different. Physical silver and gold are the safest way to own the metals. Buying an ETF theoretically gives you the same result, but some question wether or not the silver actually exists in the ETF or if they are playing a paper shell game.

Either way, for the next several years I would think either would be a safe bet to own. If you don't have any exposure to Silver or Gold, now is an excellent time to add a position to help combat the loss of purchasing power of the U.S. Dollar as it's value is continually inflated away with large sums of electronically created "Money".

Hang on..... this could be fun!

SILVER Breaks Out!

Silver has broken out to the upside as predicted in the last weekly silver chart. This is a strong looking chart and I expect silver will head much higher from here before taking another rest. This wedge was a long consolidation pattern that has been resolved to the upside.

Silver fundamentals are very strong and with all of the new uses of silver plus the recent investment demand from the Silver ETF (SLV), I expect higher prices for silver over the long run.

A look at SLV and SILVER Then and Now

When we last looked at these two charts one or the other had to be wrong. Which way did you guess?

Two Different Views


When you compare these point and figure charts of SLV(the silver ETF) and Silver you can see that they clearly don't agree.

So, is silver ready to break out or break down? You be the judge.