After the dip in its price in recent weeks,stock is looking most attractive for investors here for both fundamental and technical reasons.
Looking first at the fundamentals, after a successful restart of operations last September, production is ramping up, and this, combined with the implementation of effective cost-reduction measures and the streamlining of operations, should lead to a steady improvement in performance as 2024 unfolds.
The CEO, Jose Garcia, sums up the situation succinctly in this paragraph: "Our team is doing a great job in taking Recuperada back to positive cashflows."
He continued, "As a result of the operational reset between July and September last year, we have managed to streamline operations, improve performance, and run the mine at a more competitive cost. Those economic results will be published in the next few weeks. We continue to forge ahead in increasing throughput and to improve head-grades by better ore selectivity and more robust mine development. I look forward to a successful 2024 year ahead for Silver X."
Whilst the number of shares in issue is on the high side at approximately 192 million fully diluted, 40% of them are owned by institutional investors and management, as shown on the Pie chart below, last Fall, the company successfully implemented a shares for debt initiative involving the issuance of 6 million shares, the purpose of which was to preserve the company's working capital, thereby ensuring operational efficiency and financial flexibility.
The company's operations are in central–southern Peru, not very far southeast of the capital, Lima, where it holds a district-scale land package and has good relations with the local community.
Notwithstanding any short-term fluctuations, the medium and long-term outlook for the silver price could scarcely be better as it is considered to be probably the most undervalued asset in the world, especially when we consider the grim prospects for the dollar and fiat generally and needless to say this is expected a huge impact on the fortunes of the company going forward.
Turning now to the charts, we start with the 54-month (4-year 6-month) arithmetic scaled chart, which is most illuminating as it shows that a giant Double Bottom has been building out in Silver X since the middle of 2022 when the first low of this base pattern formed in the 20 cent area. A significant rally followed into late 2022, after which a smaller Double Top formed before the price dropped back again to form the second low of the Double Bottom late last year.
The price tried to rally out of this second bottom late last year but was beaten back by the weak silver price of recent weeks, so it is now languishing near strong support in the vicinity of the lows — and at a very good entry price. There are a couple of other bullish points to observe on this chart.
One is the relative strength of the Accumulation line as the price dropped down into the second low of the Double Bottom — it held up very well, and the other is how the price dallying in this area since last August has allowed time for the 200-day moving average to drop down close to the price creating a setup where any significant advance from this area will quickly result in a cross of the averages and them swinging into bullish alignment.
Zooming in next via the 13-month chart enables us to examine the second low of the Double Bottom in detail, and the main point to observe is how the price has repeatedly found support in the 18 – 19 cent area in recent months and as it is just above this zone now, there is a high chance that it will start it moving higher again, especially as the volume pattern in the recent past has become more positive.
Late last year, it had looked like it was advancing out of the second low of the Double Bottom, but weakness in the silver price sent it lower again so that the lows of this year may be forming a lesser order Double Bottom with the lows of last year.
Finally, on a 6-month chart, we see that following the drop late in December and into January, it looks like an even smaller Double Bottom may now be forming with the January lows.
In conclusion, with Silver X now at a very low price and close to strong support, and the company's fundamental prospects rapidly improving, it looks like a Buy here for all timeframes.
Silver X Mining's website.
Silver X Mining Corp. closed at CA$0.21, $0.153 on February 9, 2024.
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- Silver X Mining Corp. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Silver X Mining Corp.
- Author Certification and Compensation: [Clive Maund of clivemaund.com] is being compensated as an independent contractor by Street Smart, an affiliate of Streetwise Reports, for writing this article. Maund received his UK Technical Analysts’ Diploma in 1989. The recommendations and opinions expressed in this content accurately reflect the personal, independent, and objective views of the author regarding any and all of the designated securities discussed. No part of the compensation received by the author was, is, or will be directly or indirectly related to the specific recommendations or views expressed.
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The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.