Andrew Racz
Director of Research
300 East 54 Street, Suite 26C
New York, NY 10022
Phone: (212) 319-6949
Fax: (212) 753-1944

Oremex Silver Inc.

September 18,2012

(OAG.V-$ .085)
Price     $0.085
Price Range 2012   22¢ - 5¢
Number of Shares Outstanding
After Private Placement
150 million shares
Market Cap   8 x 150 = $12 million
Price Restriction   Oremex Silver has reached about 16¢ a share in the early part of 2012. Consequently, after the decline of the silver market, together with the gold and
commodity markets, the stock reached 4¢ which is very similar to other silver companies.

History – Oremex Silver which was previously called Oremex Resources is a Canadian based pure silver focus, exploration and development company with mineral properties located in the highly productive mineralized belts in New Mexico.

The portfolio of silver project includes mineral resources of about 50.8 million.

The value underpinning of Oremex Silver in comparison to other silver companies.

Silver in situ spreadsheet is in Table 1 which is from table 18 of the sheets.
Company Ticker Price Shares(M) CS(M) Location
Alexco Resources AXR-T $8.77 63.5 $312.1 Yukon
Argentex Mining ATX-V $0.41 71.3 $ 44.3 Argentina
Minco Silver MSV-T $2.67 53.2 $ 70.9 China
Orko Silver OK-V $1.62 129.6 $393.2 Mexico
Silvercrest SVL-V $2.08 87.1 $160.8 Mexico, El Salvador
Soltoro Ltd. SOL-V $0.90 58.7 $ 44.5 Mexico

It is important to notice that several silver companies which have developed in the last 5 to 10 years have achieved a price level and value level infinitely greater than that of Oremex Silver.

What is important to notice is that Oremex Silver can grow in two ways:

  1. Acquire other assets by raising additional amounts of money;
  2. Making acquisitions on its own.

There are literally 200 silver companies; most of which are public in Canada and Central America. In other words, the acquisition possibilities are available.

An increased valuation of Oremex from 5 to 10¢ would enable the company with a $15 million market cap to be in the acquisition game and increase the in situ value of the company substantially. With higher silver valuation, higher price the company could raise additional money maybe $5 million around 10¢ and open up itself to the possibility of substantial growth.

At the end of the day, the company is in the closing phase of a private placement the terms of which are described in Table 2.

Table 2

Oremex Silver Inc. Announces Private Placement

Toronto – September 7, 2012 / Oremex Silver Inc. (TSXV) – “The Company” today announced that it intends to complete a non-brokered private placement of (1) up to 13,636,354 units of the company (the “Share Units) each Share Unit consisting of the common share is “Share” and common share purchase warrants (is “Warrant), at a purchase price of $0.066 per Share Unit for aggregate gross proceeds of up to $750,000; and up to $750,000 of debenture units of the Company (the “Debenture Units”) each Debenture Unit consisting of $1,000 principal amount of convertible debentures of the Company (the “Debentures) and 10,000 Warrants, at a purchase price of $1,000 per Debenture Unit.

All Warrants will be exercisable into Shares at a price of $0.10 per Share, expiring in five (5) years from the date of issue. The Debentures will be convertible into Shares at a price of $0.10 per Share and mature in five (5) years from the date of issue.

The Debentures will bear interest at a rate of 16% per year; 8% is payable in cash and, at the option of the Company, 8% is payable in common shares. The obligation of the Company under the Debentures will be guaranteed by the Company’s Mexican subsidiary. Miners Mantos S. de R.L. de C.V., which guarantee will be secured by a pledge of the mining concessions to mining the Company’s Tejamen and Chalchihuites properties, as well as other personal property.

In connection with the offering, the Company may pay finder’s fee payable in Shares at an issue price of $0.066 per Share.

All securities issued under the private placement will be subject to a four-month hold period, in addition to such other restrictions as may apply under applicable securities laws in jurisdictions outside of Canada The private placement is subject to the receipt of necessary approvals including the approval of the TSX Venture Exchange.

Corporate Overview

Oremex Silver is a pure silver company, in the mineralized belt in Mexico which is the largest silver producing country in the world. See Table 3.

Table 3

Oremex Silver Company Overview

Focus on the exploration and development of silver projects along the highly productive mineralized belt that made Mexico the largest silver-producing country in the world.

  • Oremex Resources Inc. was renamed Oremex Silver Inc. in Q3, 2011 to reflect pure silver focus.
    • Spin-out of gold projects was listed as Oremex Gold Inc. (OAU-TSX.V)
  • Portfolio of silver projects includes mineral resource of 50.8M oz. of silver (22 mt at 69 g/t Ag) with P.E.A. at the Tejamen project.
  • All projects are in mining and capital-friendly jurisdictions.
  • Declared a dividend-in-kind of 14M common shares of Oremex Gold.
  • Experienced board and management team
    • Successful track record of mine development in Mexico with seasoned ability for new project evaluation and acquisition

 The history is quite intriguing.

  1. The portfolio of silver projects includes mineral resources of 50.8 million ounces of silver.
  2. The company recently spun off its gold – what is called Oremex Gold and created a pure silver company.
  3. The management team of the company is quite well known (see Table 4).
  4. The capitalization has even more built in leverage (see Table 5). The exercise of warrants and options would bring in considerable amounts of cash which together with the current private placement, represents a company maybe as much as $4 to $5 million cash at the moment which is 40% of the capitalization certainly, #1 in small silver companies.


Oremex Silver in our opinion is not only cheap in abstract terms but with increased price and exercise of warrants and options, creates a totally different company than it is today which is before the posing of the private placement.

Table 4

Oremex Share Capitalization (May 25, 2012)
Basic Shares Issued   122.8 million
Stock Options Outstanding        8.9 million
1.95 million @ $0.19    
0.6 million @ $0.15    
3.1 million @ $0.32    
0.25 million @ $0.26    
3.0 million @ $0.19    
Warrants Outstanding   13.3 million
0.7 million – Exercisable @ $0.17 expiry Dec. 2012    
2.3 million – Exercisable @ $0.16 expiry May 2012    
6.7 million – Exercisable @ $0.14 expiry Sept. 2012    
3.6 million – Exercisable @ $0.14 expiry Oct. 2012    
Fully Diluted Shares   145 million

 The company could substantially grow and have in situ value of well over $100 million with the current capitalization is outstanding attractive.

Management of the company is known and knows the market.

The silver industry is on the way up and therefore besides our previous calculations, all numbers can be multiplies by two if the current prediction of the silver prediction say that the price can reach $75/$80 by the year 2020.

This being the case silver is a good investment.

Oremex Silver is a small company with no debt and very strong increase in cash.

With cash, Oremex Silver can increase its in situ value.

It is an attractive way to play an industry which is strongly in the upswing and a company which is ready to benefit from a series of private placements and warrants exercised. 



Information contained herein is based on data obtained from recognized statistical services, issuers reports or communications or other sources believed to be reliable. However, such information has not been verified by us and we do not make any representation to its accuracy or completeness. Any statement non-factual in nature constitutes only current opinions which are subject to change. BERAL INC. or their officers, directors, analysts or employees may have positions in the securities or commodities referred to herein, and may as principal or agent buy and sell such securities or commodities. An employee, analyst, officer or a director of BERAL INC. may serve as a director for companies mentioned in this report. Neither the information nor any comment expressed shall constitute an offer to sell or a solicitation of an offer to buy any securities or commodities mentioned herein. There may be instances when fundamental, technical and competitive opinions may not be in concert. This firm may from time to time perform investment banking or other services for or which investment banking or other businesses from any company mentioned in this report.



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Andrew Racz. 300 East 54 Street, Suite 26C, New York, NY 10022
Phone: (212) 319-6949 Fax: (212) 753-1944. E-mail:

Copyright © 2011 Andrew Racz. All Rights Reserved.