Mass hypnosis fail of the day....

...comes to you from the earnings report published this morning by Endeavour Silver (EDR.to) and the comments therein of company Chair & CEO, Bradford Cooke.

Brad Sez:

"Endeavour posted great financial and operating results in the First Quarter, 2011."

The Market Sez:

An Owl Sez:

Otto sez: DYODD, dude.

Why did Endeavour Silver (EDR.to) drop last Thursday?

Easy: Cos the market can't be bullshitted as easily as company management would like to believe. Here's the updated production evolution at EDR.to for silver and for good measure, the silver equivalent table that adds in the gold produced (at a generous 65:1 ratio).

click to enlarge either chart

Note the 3q10 columns there, with the numbers coming from this NR published by EDR.to on Thursday morning. That announced 3q10 production of 797,054oz Ag and 1,096,509oz AgEq compares with the 2q10 numbers of 825,439oz Ag and 1,115,404oz AgEq for 2q10, but for some strange reason EDR forgot to mention the 2q10 numbers in its news release. Instead, the NR had a nice spin-fest of a headline (this was up, that was up, ain't life beautiful) but nobody was fooled, really. Especially the people that bothered to check back to the EDR.to 2q10 MD&A and read that....

Silver production remains slightly ahead of schedule for the year. Similar to 2009, the first two quarters of silver production in 2010 were scheduled to be relatively flat, as we focused on mine development and plant expansion capital programs. Silver production should start rising again in the Third and Fourth Quarters, 2010, as the new ore-bodies under development during the first half of the year at Guanacevi and Guanajuato to enter into production.

IKN highlights in red and then cues owly:

DYODD, dude.

The cat that gets the Cream (CMA.v)?

Endeavour Silver (EDR.to) is out shopping for beaten down bargains, it seems. Here's how the news starts:

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 27, 2010) - Endeavour Silver Corp. (TSX:EDR - News; NYSE Amex:EXK)(DBFrankfurt:EJD) ("Endeavour") announced today that it intends to make an all cash offer (the "Offer") to acquire all of the outstanding common shares of Cream Minerals Ltd. ("Cream Minerals") (TSX VENTURE:CMA - News). The Offer and related documents are expected to be mailed to Cream Minerals shareholders next week and will be available on SEDAR at www.sedar.com at that time.
Endeavour intends to offer shareholders of Cream Minerals Cdn$0.12 in cash for each common share, which represents a 76% premium to the average closing price of the Cream Minerals shares of $0.068 per share on the TSX Venture Exchange for the 10 trading days ending September 24, 2010, the last trading day prior to the date of this announcement. Endeavour estimates that Cream Minerals has approximately 88.3 million common shares currently outstanding.
"The Offer price of Cdn$0.12 cash per share represents a significant yada yada continues here

So let's see how this one runs, but at least the move from EDR is logical as it's about time they did something about their pisspoor minerals reserves situation.

UPDATE: This makes for interesting reading on the Nuevo Milenio property. Small resource so far, plenty of room to drill more rock, but most significantly the terms of the deal Roca struck with CMA.v were pretty expensive for the optioner. A first impression on reading this is lthat EDR.to trying to pay a touch over $10m for the whole company is the type of bid that could get trumped by a 3rd party. DYODD.

Cash costs or direct costs per tonne processed?

There's a question for you, metalheads. What's the best way of definining the costs of production for a mining company? Do you go for the much vaunted cash costs number normally pushed in front of your face by the company, or do you look at the amount of money it costs the miner to process a tonne of mineral and get all that yummy scrumptious metal out?

Here's an example, from Endeavour Silver (EDR.to). This little chart compares the vaunted and reported cash cost per ounce of silver, net of credits, to the cost of processing 100kg of ore at the company (EDR.to reports that number per metric tonne, we do a simple 10X division to make the scale fit neatly on the chart).

Seems to me that when a company like EDR.to trumpets its fabulous cuts in cash costs, all it's really saying is, "We were dumblucky and got more moolah for our byproducts". DYODD, dude.

The 2009 Small Silver Sweepstakes: The Results

Yes indeed, 2009 is all over and so the results are in on our tracking of best small silver mining company in 2009. Here's the chart:

click to enlarge

• And the winner is....ENDEAVOUR SILVER (EDR.to)! Congrat guys on a great achievement and a 230% gain in 2009.

• An excellent second place (silver medal...geddit?) goes to my personal favourite silver miner, Fortuna Silver (FVI.v). You guys should be proud of yourselves, too.

• The honour of third is won by Great Panther Resources (GPR.to). Maybe not my number one personal pick, but there's no knocking success. Well done indeed.

Oh....who's that bringing up the rear? In last of ten places and the only featured stock to have made a net loss in 2009 is ECU Silver (ECU.to)! This means that GATA membership is half price in 2010, people. Don't forget what Bill Murphy pledged to the world early in 2009:

If this stock (ECU.to) is not at $3 US, or CDN, by the end of the year, I will cut the Café’s subscription price in half for 2010, or $100 versus the now $199 … which means I will lose hundreds of thousands of dollars if this dog does not hunt … am putting my money and my mouth where my money is.

All I can say to that is "ROFL". So Bill, either you make that shiny new cut price $100 annual sub nice and easily available to your long suffering members or you can quite simply, once and for all

Chart of the day is.....

.....the Year To Date Small Silvers Sweepstakes (new new update)

We're into the last month, the home stretch and all that jazz, so we'll crank up the frequency of our superduper silver sweepstakes til the end of the year (the last update was here on Nov 23). Who's gonna be champeeeen?

(click to enlarge)

Endeavour Silver (EDR.to) is still out there as numero uno, but it's now getting pressured for the top spot by Bear Creek Mining (BCM.v) which has put on a great spurt in the last week or so. Fortuna (FVI.v) still looking solid in the bronze medal position.

Down amongst the also-rans, MAG Silver (MAG.to) (MVG) has made up quite a bit of ground in the last couple of weeks with a 30% upmove on good volumes. I have a sneaking suspicion that MAG may still beat out our benchmark, the silver bullion ETF (SLV), once December 31st comes around.

ECU Silver (ECU.to) = Half priced GATA membership next year.

The Year-To-Date Small Silvers Sweepstakes (new update)

It's been a couple of weeks since the last update, so let's see how things are developing.

(click to enlarge)

Endeavour Silver (EDR.to) has had the most magnificent month, moving up a full 100% (benchmarked to its Jan 1st price) so far this November. Top job, guys.

Personal fave Fortuna Silver (FVI.v) is now a firm second place, also having a good time this month. Great Panther (GPR.to) slips from 3rd to 4th and the ones below are basically in the same position as before. Wonderdog ECU Silver (ECU.to) is actually net negative for 2009 again...mindblowing on one level, but check the books and it's perfectly logical, really. Half price GATA next year looking evermore likely.

The Year-To-Date Small Silver Sweepstakes: Update

Here's the second installment, first was on October 23rd here.

click to enlarge

After we ran it last time, I was asked by a reader to add Bear Creek Mining (BCM.v) to the list cos said reader had done well on the stock this year. Yup can do, and BCM grabs 2nd place right off the bat. If there are any other suggestions for the next time we run this chart, just drop me a mail...happy to oblige (as long as the miner fits the category).

Leader for the prize is now Endeavour Silver (EDR.to) which has had a fine November so far. You go girl. GPR.to and FVI.v are up there battling hard. Coming up the rear (if you'll pardon the expression) is MAG Silver (MAG.to) and, of course, the dog of them all ECU Silver (ECU.to), though even that scam stock has managed to get into a YTD net positive situation thanks to the recent hysteria. It won't last.

Not all silver miners are the same

Check out this peer group of Fortuna Silver (FVI.v), Endeavour Silver (EDR.to), Great Panther Resources (GPR.to) and First Majestic Silver (FR.to). All junior scale producing silver miners. Note how one company stands head and shoulders above the rest in the last five days.

That's basically because;

1) it doesn't screw its shareholders around
2) it has strong financials
3) it will still be financially rock solid if silver drops to $10
4) it has honest management that cares about its workers and the nowadays all-important social and environmental angles

And that's why I have liked, like and will like Fortuna Silver (FVI.v). Those who bought the NOBS report will know that i'm looking for a lower price to buy back in, but if that lower price doesn't materialize I won't be surprised. Cream rises, you see.

If you'd like to find out the details of FVI.v, its fundamental strengths and my proposed trading range in the short term please consider investing U$10 in the report. The details are here. You buy a copy and we both benefit, as there is plenty of money on the table for those interested in trading this stock.

Not all silver miners are the same, so buy yourself a good one.