“A Silver Company You Need to Own NOW” (Dudley Pierce Baker)

Sniffing out what "may be the only silver company you need to own" from a Precious Metals Warrants ad

By Travis Johnson, Stock Gumshoe, February 9, 2012

I don’t believe I’ve ever written about Dudley Baker and his Precious Metals Warrants subscription service, but several folks sent in his latest pitch for subscribers, and it has exactly the kind of teaser promise that we love to unravel, so I thought I’d have a look for you.

Baker has been a warrants/options/futures trader for a long time, though I think his Precious Metals Warrants database and newsletter service started up within the last couple years — he basically offers up a database of all the precious metals warrants that are publicly traded in the US and Canada, and what he calls a “look over his shoulder” at his personal trades (we’ve received just one subscriber review of this oen so far, you can see it here), along with some kind of insider trading data. You can also find most of the publicly traded warrants for free at CanadianWarrants.com and probably other places as well, so I guess it’s largely a question of whether you like his valuation criteria and his portfolio picks.

But the point is, he’s pitching for new subscribers ($99/month) by saying that he’s got what might be “the ONLY Silver Company you need to own.” Which makes us want to ID it for you, whether you want to subscribe to his service or not. Here’s the spiel:

“A Silver Company You Need To Own NOW

“If you are a current subscriber, then you should already know this company. It has been my #1 personal position for almost 2 years.

“Go to Dudley’s Portfolio – “A Look Over My Shoulder” and my Top 25 Positions – XXX is #1 on the list.

“In my audio to be recorded this afternoon and available to you tonight around 8:00pm, CST, I will give more reasons and info on what I believe will be one of the great stories over the next 2 or 3 years….

“This truly may be the ONLY Silver Company you need to own.

“Of course, we, are big believers in diversification which is why we own around 80 different companies but our Top 25 and especially our Top 5 to 10 is where most of our monies are invested.

“Why am I getting more excited now about this Silver Company?

“I am seeing more and more news and secret articles coming out on xxx. The other day the shares jumped up 10 cents on one report.

“You can not wait any longer.

“These shares appear to be on the verge of an upside breakout and you will be paying substantially higher prices.

“Currently the shares are trading around C$0.85 but this may not be for much longer.

“My personal ‘hope’, vision, and analysis points to a minimum of $5 to $10 within two years. Not bad, as this would meet our 5 to 10 bagger definition and depending upon what silver is selling for, this stock could be substantially higher.

“The name of this company is worth far more than the price of our subscription and will return many times your investment. Don’t wait, get started now.”

So what stock are we dealing with here? Well, since we don’t get a lot of specific clues we’ll have to make an educated guesstimation using the less-than-certain output of the Thinkolator this time around … Thinkolator + Gumshoe Cogitationizer = solid chance that this is Aurcana Corp (AUN in Canada, AUNFF for the OTCQX listing on the pink sheets … OTCQX is just an extra level of “almost listing” certification from the pink sheets folks).

Aurcana is a silver miner, with two “restart” primary silver mines that have decades of production behind them but are expanded or otherwise restarted or about to be restarted — the La Luna mine in Mexico is now producing at about a million ounce/year rate and has the chance to upgrade that by perhaps 50% as they boost production this year, and the Shafter mine in Texas is expected to be operational this year and start production at a much higher level, around 3.8 million ounces/year starting midyear 2012.

The company is already fairly large for a junior miner, but this 5+ million ounce production level would vault them up into the middle tier of silver miners with companies like Endeavour and Fortuna. Right now, Aurcana is roughly (OK, very roughly — and counting the dilution of Aurcana’s big pile of 2013 warrants) half the size of those two miners. Interestingly enough, part of what has probably been holding Aurcana back is a lack of certified reserves, particularly for La Negra — but production has been increasing markedly and the vast majority (over 80%) of their recent production has been from areas that weren’t in their reserve base, areas of new discovery or areas that weren’t part of their measured and indicated resource base. I don’t know if that’s common, but it would indicate to me (a non-expert in mining or geology, let’s be clear) that their production potential should be higher and longer-lived than their limited reserve base might otherwise imply.

There’s a presentation up from Aurcana with December numbers now that you can view if you like, and their latest production update from January is here. The shares will certainly be buffetted by the very volatile price of silver as it moves around this year, but they say their cash costs are down around $10/ounce (they bought back Silver Wheaton’s 50% silver stream on La Negra a couple years ago), so they ought to be able to produce plenty of silver if they get the new mine opened on schedule this year (it is permitted and under construction now), with at least an outside chance of getting production up to between 7-9 million ounces/year by late in 2013. I have no idea whether or not we’ll see a $5 or $10 share price for Aurcana in the next few years as Baker seems to believe, but with their big mine set to open this year and with expected upgrades to their reserves base to be released sometime this quarter, it is certainly a pivotal time for the company.

And yes, they do trade at about 85 cents, and have gotten some attention from investors lately, including a spike of about 10 cents a few days ago when a Motley Fool writer called them the “greatest growth story in silver” in an interview with CEO Lenic Rodriguez. I don’t know if you can call that a “secret” story, but it did move the price, and there are certainly plenty of newsletter writers that could be jumping aboard the stock — it’s hard to resist growth stories like this when you have a pretty good level of predictability about a dramatic surge in production. That’s not to say that part of that growth and optimism might not be built into the share price, since these things have been projected for quite a while.

So there you have it — I’m fairly sure that this must be Baker’s “silver company you need to own NOW,” and it does look like this will be a big year or two coming for them. As to whether they’re right for your portfolio or you trust the company’s potential, well, that’s your call — let us know what you think (or if you’ve got another favorite silver play) with a comment below.

And please, if you’ve tried Baker’s subscription service, click here to review it for your fellow investors — inquiring minds want to know!


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28 Comments on "“A Silver Company You Need to Own NOW” (Dudley Pierce Baker)"

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bill deitrich
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bill deitrich
February 9, 2012 12:56 pm
Very interesting. Recently saw ads touting silver as headed for $200 an ounce and how to play.it. This from MMP. So I thought I’d try it. The silver plays they tout are AGQ ultra silver ETF and very favorable takes on AUN and SSRI. The one gold mentioned was Sandstorm. But when I look into the model portfolio none of these are mentioned. They do have stillwater mining, which I think is platinum play but recommend selling 1/2 of positions in GLD and SLV. I don’t get why they’d have people bailing at same time they are pushing precious metals… Read more »
aoibhneas
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February 9, 2012 6:24 pm
According to yahoo message boards, apparently motley fool and zack’s had nice things to say about AUNFF. I don’t know the timeline or if others recommend it. If it is a pump and dump then your “MMP” is also pushing Sandstorm Gold and SSRI and that AGQ etf. Beats me why they’d be selling positions in gld and slv though. Wondering what is up with GDVXF. It had meager volume most of day and then suddenly dropped on larger volume. Had some hope it might approach 52 week highs but I think 1.30 was a far as it got recently.
Brent
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Brent
February 9, 2012 1:05 pm

As far as AUN , to much paper out on it, to much dilution.
Have a look at Venture stock HDA Very small dilution, huge high grade silver deposit a mill that will be complete in a month a full mining permit and in southern British Columbia, nice and safe.

larry bowskill
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larry bowskill
February 9, 2012 2:55 pm

I have owned Aurcana on and off for the past 6 months but finally realized that there are better ones. It trades in the $.65 – $.85 range on a regular basis. It does have some good deposits but because of it’s extremely high dilution, it has limited growth possibilities. One of the best non producing stocks is Golden Goliath (GNG) or producing ones is Impact Silver(IPT).
LB

gsk
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gsk
February 9, 2012 1:34 pm

i tried mr.Bakers letter as i like to read and see the leverage provided by warrants.
Too expensive——–“” much ado………….”
it was very hard to get any question answered. they want your money and you dont ask any thing deal.
will not recommend
gsk

summerbeachman
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summerbeachman
February 9, 2012 2:00 pm

Aurcana insiders have completely sold out of this stock over the past year, almost $3 million worth. I’ll take a pass on this one!

Mike
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Mike
February 9, 2012 2:48 pm

Baker is totting this stock as he’s probably holding warrants on it

Marc
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Marc
February 9, 2012 4:01 pm
What I see here is not very promising. First I’m not going to support anyone by giving them $100 a month to join their group. Travis doesn’t ask me to pay for his house via a $100 a month subscription and that’s why I am here. 🙂 THE SCAM: Pick a stock or get paid to say you picked it as the case often may be. Buy some shares then tell your group of readers that are paying for your tips and thus very likely to buy on your recommendations, what stock you just picked. Look over my shoulder please!… Read more »
Rick
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Rick
February 9, 2012 4:55 pm
Have this guys looked at silver? I bought a lot of silver and gold (physical) in Feb 2000, and held most until recently. Gold is viewed as money, and people buy it when they start distrusting their governments money. Silver, on the other hand is a little different. Some were suggesting that silver is also money, but I am not sure I agree with that. When I bought my silver, there were 1.2 Billion ounces in reserve all over the world, but each year that reserve dropped by 100,000,000 ounces. The world was producing about 8 MM ounces, and we… Read more »
roger reynolds
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February 9, 2012 5:51 pm

aunff has 560 million shares and , in my opinion, should do at least a 1 to 5 reverse stock split. No usa broker can recommend anything trading for less than 3. Remember, when first majestic and endeavor took off they were already trading above 3. Thus, the margin buyers were able to pile in. This cannot occur with aunff. But, “IF” they are able to meet their production targets, then they will have one of the lowest price to sales ratios within the silver stock arena.

Jason
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February 9, 2012 6:36 pm

Even with the dilution, I think Aurcana has plenty of upside if they are even in the ballpark of their production growth estimate. 1 million to 5 million ounces in a year. Management is strong and there has been no insider selling in the past 4 or 5 months. I am not quite as bullish as Dudley, but I think the stock will do well between now and December. IMHO.

Gileb
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Gileb
February 10, 2012 12:43 am
All speculative play based on gold and silver raising price. It will bust soon folks. Follow futures index and you will see that collapse coming soon (deadline after presidential election) Read this first (close the web page to stop the video, keep page in writing and print it. Read it very closely to link all information, select precise data to confirm (with web search) present trend from April 2011 in charts and look for more. http://www.insiderfortunes.com/releases/Fear_Conspiracy_BFP.html Do your homework. Protect your portfolio, warning signal are place same as in 2000 and 2008. It will be worst. If republican are elected… Read more »
Mark
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Mark
February 10, 2012 9:13 am
I first bought Aurcana in 2010. Held it for quite a while and ended up selling because it just wouldn’t go anywhere – others did not seem to see their upcoming potential. The “big mover” is that Aurcana is scheduled to commence production at its Shafter silver mine in Texas by June 2012. Now – my question is what will be the cost per ounce to produce? The mine is in the U.S.; thus, they’ll be paying U.S. insurance rates, wages, taxes, electricity, water, etc. Also, it’s going to be some serious underground mining (expensive) not open pit. I have… Read more »
Mark
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Mark
February 10, 2012 9:16 am

Ahhh, in my last sentence above I meant to say if the billions, not of

schopenhauer
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schopenhauer
February 11, 2012 4:27 pm

” A silver company you need to own now”.
It’s pure speculation if you buy pennystocks like this. I like to speculate but I never paid for any newsletter. I like to read old info on Theaureport or Goldreport.
I bought Silver Predator(SPD). The CEO is William M. Sheriff ,also CEO of Golden Predator(GPD).Sheriff made a lot of money for shareholders in the past. I think SPD is a good buying opportunity too because it’s very low priced at the moment
Here is a link: http://www.yourindustrynews.com/high+grade+silver+and+zinc+intersected+at+the+plata+project,+yukon_73266.html

alex
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alex
February 12, 2012 1:33 pm

if you are looking for a buyout silver company,then check out cma,upcoming results will double this company in a few short months

Brian
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Brian
February 12, 2012 10:10 pm

Aurcana is the real deal, Remember they bought back their silver stream from Silver Wheaton. Would they turn down the guaranteed money from SLW if they did not have increasing reserves and grades. Of course they wouldn’t. When you find a well run, well funded Company, don’t get impatient, put the shares under the mattress and wait for the payday…

Matt
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February 18, 2012 9:14 pm
“It’s pure speculation if you buy pennystocks like this.” shopenhauer AUN have been in production at La Negra since early 2007 and LN was a Penoles owned and operated mine for some 30 years prior to AUN purchasing it. AUN have upgraded LN’s production from 800 tpd to 1,000 tpd to 1,500 tpd to now 2,000 tpd and will advance production to 2,500 tpd ,most likely this year.That is 3 million oz Ag Eq. http://investmentrevaluationcatalyst.blogspot.com/2012/02/aurcana-possible-resource-increases.html Shafter is to begin production at 3.8 million oz a year and has the ball mill in place now to take it to 2,500 tpd… Read more »
Matt
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February 18, 2012 11:18 pm
“Have a look at Venture stock HDA Very small dilution, huge high grade silver deposit a mill that will be complete in a month a full mining permit and in southern British Columbia, nice and safe.”Brent Hi Brent,any ideas on when they will go into production? No news of the mine site being constructed or the mill having been delivered. Huldra state 22 million oz production from the 200tpd mill to be in place this quarter. AUN have 1,500 tpd operations at LN/2011 and managed 2 million Ag Eq.How will a 200tpd operation achieve this ? I see an indicated… Read more »
Rick
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Rick
February 22, 2012 11:40 am
Here is a quote off of Silver Wheaton’s website. The company has a number of agreements, where, in exchange for an upfront payment, it has the right to purchase, at a low fixed cost, all or a portion of the silver production from 16 high-quality operating mines…..” (see home page, SILVER INDUSTRY FACT PAGE) Let’s take their deal with Goldcorp. They are buying 1.5 million ounces from GG at an average price of a little over $29 an ounce through 2014. Does that sound like a LOW price to you? I see some of you are having wet dreams over… Read more »
toedtman
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toedtman
March 11, 2012 12:30 am
Dudley’s review sounds impressive- thats good news you can use. I have some Aurcana, and had recently noted their upside possibilities too. However this stock did not look strong recently and one trading service let it go – based on near term expectations. These miners are pretty cheap now, and buying an initial 1/4 position (otherwise hold) is recommended by a different service. My reason: The net short position in silver is much greater than it was in Dec, so you can reasonably expect better times to buy are close at hand, and November is a long way off.
barry moon
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barry moon
March 12, 2012 1:29 am

why bother wondering buy the physical gold and/silver throw it in the draw and pull it out on a need to spend basis its guaranteed and will go up over time as per history so enjoy not wonder

Stuart
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Stuart
March 24, 2012 1:38 am

Some good comments here..
For what it is worth, Just to say that this was Greg McCoach’s mining speculator’s tip during last year….

Myron Martin
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March 24, 2012 11:34 am
What I find interesting in all these divergent comments is that rarely is the most important factor (to my way of thinking) even considered. People tend to confuse brief periods of gold and silver selling off as proof of high risk, without considering that the TREND (which is your friend) has been UP for a decade. Neither has fallen out of its upward channel in spite of sometimes severe pullbacks, mostly engineered by the government/FED cabal who consider gold and silver as threats to their MONOPOLY of fiat money creation. They simply try to slow down the inevitable advance by… Read more »
Milan Todorovich
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Milan Todorovich
March 24, 2012 4:08 pm

Motley Fool also loved SMNPF and it didn’t do anything but go sideways and then down with the silver prices. Unfortunately, it didn’t spike with silver spikes, so I dumped it.
Bought 200 AUNFF and will hold it for a while. Unfortunately I dumped MUX and it rallied $.40 the next day.

Gileb
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Gileb
April 11, 2012 2:26 pm

Intermediate buy on Silver is IPT (Venture) Impact Silver.
Serious and money making producer. Ranking profit every year since 2006 from 10% to 31% net profit.
Small cap with eps ratio 9.9, $1.43 pps now. Lowest price last 12 months $1.26. Deal this one for safe profit.

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