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[Silver lining] Wallstreetbets Brain teaser
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Simon_Inaki is in Silver lining
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Lets see how much you boyz really know. Maybe some of you who are newer will learn a thing or two.

Question:

There are two silver mining companies with vast cash reserves, nearly identical LT assets (mines), etc. However, company 1(one) has a low cost of recovery/oz, and company 2(two) has a high cost of recovery/oz. The difference is -- significant. In layman's terms, think of company 2 as having a lower margin.

  • Further, assume that silver/oz is trading at an all time low and assume no futures selling of silver by either companies, or any access to futures market.

  • Assume that the current /oz price of silver isn't profitable for either company and that they close their mines in a non-profitable environment.

Think of yourself as a hedge fund seeking exposure to silver as you expect a steady upward movement in the price of silver /oz.

If you can only pick one, which company's stock do you purchase? Why?

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The Prodigal Heron

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9 years ago