it looks like the bad news is out of the way, at least i hope so. first we had the cost estimate for pirquitas revised upward from $150 million to $220, then the company lost $57 million on exposure to asset-backed commercial paper, and then the stock price declined from $48 to its current level.

lost in all of the bad news is all of the good news that the market has ignored. while the costs at priquitas increased, so did the potential revenues, only much more so. the pirquitas project is now much more robust than originaly forecast. there is no excuse for losing money on supposedly aaa-rated commercial paper, but remember that the company owns 1.95 million oz silver, and is already ahead $28 million on that trade. they planned to raise $75 million in the debt market, but instead issued convertible bonds with net proceeds of $134 million, making up for the abcp fiasco. this results in some dilution, maybe 5%, but at $43.33 share they're not exactly giving away those shares. i expect shafter will be sold soon, so they company's cash position should be strong enough to fund the rest of its projects internally.

while i don't try to tell mr. market what the stock should trade at, it is clear to me that $20 silver is being ignored. this stock is trading like silver is still $13, and that looks like an opportunity. more importantly, the shorts are sitting on this stock, specifically 2.2 million shares that will have to be bought back, probably at much higher prices.

we should also hear something about snowfield soon, and i am looking forward to seeing what the new resource estimate looks like for that project. with any luck, the next surprises will be good ones.