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

Great Panther Silver Limited 

March 29, 2011



52-week price range:

$.64 - $5.04

Shares outstanding:


Market cap:


GPL is expected to complete the sale of 5M shares at $4.10 per share, yielding $21 million.

The offering will take place in early April, 2011.

Great Panther Silver Limited engages in the acquisition, exploration, development, and operation of mineral properties and mines in Mexico. It focuses on the exploration of gold, silver, lead, zinc, and precious metals. The company's principal mining properties include the Topia Mine consisting of four groups of mining concessions covering a total area of 6,399 hectares located in northwest Durango state; and the Guanajuato silver gold mine comprising three principal mines, the Valenciana, Cata, and Rayas located in the Guanajuato Mine District. The company was formerly known as Great Panther Resources Limited and changed its name to Great Panther Silver Limited in January 2010. Great Panther Silver Limited was founded in 1965 and is based in Vancouver, Canada.

Great Panther Silver Limited, headquartered in Vancouver, Canada, is one of the fastest growing primary silver producers in Mexico with strong leverage to future rises in the price of silver. The Company owns two operating mines in Mexico, and employs over 800 people.

Great Panther's mission is to become a leading primary silver producer by acquiring, developing and profitably mining precious and base metals in Latin America. We are committed to conducting ourselves with fairness and integrity, and managing all business activities in an environmentally responsible and cost effective manner, while contributing to the well being of the communities in which we live and work.

Our primary goal is that of profitable growth, as we feel this is the key to maximizing long term shareholder value. Our specific objectives are to grow production and earnings from mining operations and maintain positive cash flow while continuing to actively pursue exploration and development opportunities in Latin America.


SILVER: Primary silver producer - 71% Ag, 20% Au, 9% Pb-Zn

PRODUCER: Two 100% owned mines in Mexico - no royalties.

PROFITABLE: $5 million annual net income for 2010

LOW COST: U.S. $6.50-7.50/Ag oz, net of by-products


  • Increasing production and resources.
  • Now in second year of 3-year organic growth strategy.
  • New Ag-Au discovery could lead to new mine.
  • Aggressively seeking acquisitions.








Revenue (net smelter return)







(millions of AG eq oz)







1 Production
(millions of Ag oz)







Earnings from mining op.

$ --






Cash cost (U.S. $ per Ag oz)







Exploration expenditures







Capital expenditures














Convertible debt






$ --


Gold at $1000
Silver at $50
in the interest of America. We would control the gold market, we would control the silver market and we would be on the right path........regain control of the US Dollar.......... AGAIN.

The Hunt brothers in the 1970's discovered the "Commodity Age". They were 30 years ahead of their time.

"It is the time to put 'gold' into the commodity pages, next to pork bellies, because this is where it belongs."

Secretary of Treasury William Simons, December, 1974. Hearings for the Legalization of Gold

I discussed with President Nixon in 1981 and 1982 using our precious metal reserve to forward our foreign policy aggressively. The President liked the idea!! Frankly, a $1,000 gold and $50 silver price is, today more than ever, in the interest of the United States of America.


Silver started to participate in the current unprecedented commodity boom. Only in February, 2005 did silver break the $6.90 level and ended in December, 2006 at $9.00. In early 2006, the $10/ounce price was broken and hit $15 in May.

Even at $15 per ounce production -- at 4M ounces a year at $35 per ounce selling price -- the operating income is $100M per ounce.

This is a minute sum, when we consider that the total aggregate (market) value of the ten largest silver mines has a market value of $8B. This includes the new silver companies like GPL, AXU and U.S. Gold.

Great Panther Silver is the child of the precious metals boom of the current decade. Silver, of course, what's called the poor man's gold, is the second most important precious metal. It is in the same category as others because all over the world people accept silver more or less as a currency, and its value recently has been elevated to the role of currency value all over the world.

The wire services, CNN and others, list and silver simultaneously with stock market indices, one seen daily by one billion people all over the world.

First we have to understand the rapid rise of silver to $37.50 per ounce in 2011. About six or seven years ago, Warren Buffett bought several billion dollars worth of silver at $6.00 and sold it at the same price, accepting defeat. The first silver believers were, of course, Bunker and Herbert Hunt, the Texas oil brothers who believed that silver was worth about $50 per ounce. It was a historic landslide and an important investment. However, we have to pick up an important time element in valuing silver. The Hunt valuation was in 1980. Silver hit $50. Subsequently the metal felt to around $5. For twenty-five years it was out of global interest and out of trading interest at such a low price. The monetary and political defeat of the U.S. dollar with the tremendous increase of debt that the United States. This debt will reach $15 trillion in 2012.

It is exactly the twenty-five year gap which is making silver interesting today. For twenty-five years, the mining of silver was technically zero except as a byproduct of copper and gold. Consequently, when the price is over $35 and for new silver reserves is highly profitable, we have to keep in mind that money is available for new exploration. However, the time element to bring a silver mine to production may be up to eight to ten years. Accordingly, there is a Silver Gap. President Kennedy in 1960 emphasized this issue of the Missile Gap. Actually, the missile gap was always in America's favor. The analogy is not now for the silver miners but in the silver owners' favor. Whoever owns silver and sells it for $35 to $40 is in a more powerful position because the new silver to be thrown on the market is the high value. It is easier to close the Silver Gap than the Missile Gap.

In the first table, I want to emphasize the rise of the price of silver and its importance for Great Panther Silver Ltd. Actually the valuation and the imagination which leads us to put a modern-day valuation on Great Panther Silver is exactly to project the future.





Annual production (millions)




Selling price, $/ounce




Cost, $/ounce




Operating profit




Total income

avg/$1 million



Per share (116 million)




*with acquisition




Great Panther Silver is by definition in the acquisition, exploration, development, and operation of mineral properties, particularly in mines in Mexico. It focuses on the exploration of gold, silver, lead, zinc and precious metals. The company's principal mining properties include the Topper Mine consisting of four groups of mining concessions covering a total area of four groups and 6,400 hectares in the Northwest Durango State.

GPL, with the recent financing has about 122 million shares outstanding. The valuation of the company, based on assumed prices of silver, is illustrated in Table 2. The first issue which we must note is that these little known companies with about 3 million, and eventually perhaps 4 million ounces of silver production, with the current market valuation of $500 million, in a few years will be close to a billion dollars market cap. This would indicate that with a few silver mines and its production schedule, a billion dollar mining company can come to the fore with enormous cash holdings in the company.

Shares outstanding

120 million

5-year cash flow with $30 operating at 40 million ounces of yearly production

5 x $120 = 600 million

Value of surplus cash

5 x 80 = $400M

Value of silver resources


Per share (120M shares)



Funding in the Golden Age of Silver, the value of GPL would reach $15 per share.


Silver price has been tracking gold since 2003 and should continue this trend.

Silver ETF's and other products have taken 100's of millions of ounces out of the market.

Governments own negligible amount of silver.

Physical market is much tighter than futures market.

Very small market - very volatile.

Percentage gains in silver can be greater than those in gold.

Long-term trend is still upward.

The secret of the emergence of a company from a market valuation of technically not more than $100 million four years ago, is the arithmetic of the silver industry. This is the Silver Age, or rather the Golden Age of Silver. The cost of mining silver is not more than $5 to $6, whereas the selling price has gone to over $35. This means a major transformation of Great Panther Silver.

The most important point is the future of a company like Great Panther Silver. Great Panther is projected under various circumstances a cash flow which can reach $500M in the current decade. Apple Computer has $500 billion surplus. Accordingly, 10 GPL can match all the i-Pads. How has this happened? This happened because the importance and the elevation of silver as a monetary metal in our system. There aren't many such events in the financial world. Correspondingly, there are not many events as with silver as a monetary metal in the overall financial structure of the universe, and the changes in monetary values of the last ten years.

What I am saying here is that the cash flow in existence and the growth in GPL which is not dissimilar to a number of other silver companies is real, lasting and represents all the corresponding changes in market values. We are stating that a totally unknown company could be in the current decade a billion-dollar market value company, owning or holding almost $500 million worth of cash and facing the world as a monetary power in the entire structure of our monetary world. One can carry this argument even further. If there are ten such companies and GPL, they would represent a market value of $10 billion. They would also represent a cash accumulation sometime in this decade of $500 million. The conglomeration of such monetary power, with a combined valuation of $500 million, easily marketable, easily saleable, easily exchangeable currencies, represents a major change in our value system.

In the year 2011, the United States will finish with a $15 trillion total debt. In the years 2011 and 2012 combined, we may have a new deficit of close to $3 trillion. The public in America and overseas has just started to feel the results of this major transformation of assets from cash and real assets into paper. It will bring incredible changes to the world. Thirty years ago we talked about Mr. Hunt and the Silver Cartel. The government even ostracized the Hunt brothers. Today the value system that the Hunts have foreseen, particularly Bunker Hunt, is coming to reality. We hope that the changing value system will fall into responsible hands like Great Panther Silver Ltd.

I would like to add something on a personal level. What politicians have done to the world, namely the debasement of currencies and the creation of debt, is going to bring about many changes. Today, and I'm talking of 2011, the media, the public, talks against personal salaries of $10-20-50 million. We call it excessive. At the same time, look at what also happened. Any executive who owns 10 million shares of GPL, and 10 million shares long ago was only worth $7 million, would have a net worth of $40 million at current prices, but $100 million at the potential $10 level. The question is, are we going to reorganize our monetary thinking? Are we going to correct the excesses at a political and not at the financial level? Or when things happen based on financial reality, we will find new scapegoats who benefit from the mistakes of political leadership?


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.