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« 2009 was a transformational year for Silver Wheaton Corporation | Main | 13.6 Billion Reasons to Adore Silver Wheaton »
Wednesday
Mar032010

SSRI CEO POSITION

On the 6th February 2010 we wrote that the news that Robert A. Quartermain had resigned as President and CEO of the Company effective January 19, 2010 has cast a small shadow over the company in that the market does not like uncertainty and this position needs to be filled by the right person for the job. SSRI is still a great company so we will need to watch it closely as a bounce back to much higher trading levels could be on the cards.

We recently contacted SSRI in order to gain some clarification of the situation regarding the position of CEO, the following is a question and answer session conducted via emails for which we extend our thanks to SSRI for taking the time to respond to our concerns.

Subject: SSRI CEO POSITION
 
Good Day,

As investors and indeed promoters of Silver Standard we are concerned that the stock price is drifting ever lower. Can you please provide us with an explanation for the demise of the stock price?

We are aware of the recent resignation of the CEO without having a replacement lined up to take over which we believe is a drag on the stock price.

Best wishes,

Bob Kirtley
www.silver-prices.net





Hello Mr. Kirtley – I apologize for the delay in responding.
 
With respect to our share price, I think that if you chart silver and gold from Jan. 1 through today and plot Silver Standard, we match the decline in prices pretty closely. While Mr. Quartermain’s resignation coincided with the sell-off, I believe the more important issue for our share price is the Pirquitas Mine. When we’re able to declare full production (anticipated in early Q2), our range-bound performance should start to dissolve.
 
You may want to tune into our Q4 conference call on Friday morning, details of which will be published tomorrow morning. In the meantime, please feel free to call me anytime.
 
Regards,
 
Paul
 
Paul LaFontaine
Director, Investor Relations
Silver Standard Resources Inc.








Subject: Re: SSRI CEO POSITION
 
Good Day Mr LaFountaine,

Thank you very much indeed for responding to our request for clarification of the demise in Silver Standards stock price.

As you have suggested we have drawn a chart from 01 January through til today which we attach for your information.

Gold has 0.0% decline
Silver has 7.5% decline
HUI has 8.0% decline
SSRI has 27% decline

So, as we can see SSRI has declined against silver at a ratio of about 4:1 and not as you suggest   I think that if you chart silver and gold from Jan. 1 through today and plot Silver Standard, we match the decline in prices pretty closely

If our chart is incorrect in any way please let us know.

Best wishes,

Bob Kirtley
www.silver-prices.net

SSRI Chart 02 March 2010.JPG



Hi Bob – I had prepared a similar chart for internal purposes but used different time frames – Jan 1, 2009 – Feb 19, 2010 and Oct. 1, 2009 – Feb. 19, 2010, which you’ll see attached. What charts tell you depends on the time frames selected and what you’re measuring against. I would also point out that there has been, in the course of the correction in equity markets so far in 2010, a disconnect between the prices of precious metals and the performance of related equities. More broadly, I think over the last several years, metals prices have been buoyed by the ETFs, to the detriment of equities.
 
If I had been more careful what I should have said is that the pattern of our decline matches those of precious metals. As an equity that’s highly leveraged to silver and more recently to gold, it shouldn’t be a surprise that moves to the downside or upside in precious metals would be exaggerated in Silver Standard’s case.
 
I suggest for the same time period you compare the relative performance of SSRI, Hecla and Coeur, and I think you’ll see why my contention is that our declines are more precious metals price-related than company specific events.
 
But Pirquitas remains an elephant in the room for Silver Standard. As important as any of us to a corporate effort, what matters most to shareholders is the performance of the company assets.
 
Thank you for a thoughtful reply.
 
Paul


SSRI Chart from Mr LaFontaine 04 March 2010.JPG



Good Day Mr LaFontaine,

Thank you very much indeed for your detailed response to our enquiry.

As you have suggested we have drawn the chart again encompassing 2009 until today. We have have also plotted the progress of a few other silver producers and as it shows SSRI is at the bottom. (chart attached) So we are coming to the conclusion that over this period the performance of SSRI is poor and over the short term it is very poor.

If you wish to make a final comment we will gladly include it in our write up which we intend to do shortly.

Best wishes,

Bob Kirtley
www.silver-prices.net

SSRI compared to others 04 march 2010.JPG


Thanks, Mr. Kirtley – Pirquitas has been under construction for over two years, which explains our range-bound performance and, as you know past performance is no assurance of future performance. With Pirquitas at full production, I believe our shares will be re-rated by the many analysts who cover us – providing the catalyst to move out of the lengthy consolidation period.  And investors will return to the company with the largest resource base and on a per share basis – which ultimately represents unlocked value for shareholders.
 
Paul






Mr LaFontaine,

Thank you for being generous with your time and giving us your views on the current situation regarding Silver Standards stock price, it is very much appreciated.

Best wishes,

Bob Kirtley





Anytime, Mr. Kirtley.
 
Paul

 
Paul LaFontaine
Director, Investor Relations
Silver Standard Resources Inc.


In conclusion the good fortunes of this company are largely dependent on the Pirquitas Mine and how well the start up and production is implemented, along with the void that has been created by the departure of of the CEO, Robert A. Quartermain.


All the best.

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Reader Comments (2)

Team,

If you are paying for financial information please respect the confidentiality of the data as we cannot make it public on this site.

March 4, 2010 | Unregistered CommenterSilver Prices

Hi Bob, great article but I note that Mr LaFontaine did not disclose why Mr Quartermain quit as CEO. My questions are 1)What does Quartermain know about the Pirquitas mine that we dont? 2)Is Quartermain a buyer or seller of SSRI?.......Maybe you should follow the money on this one before going contrairian and buying SSRI at this level? Best regards, Ian

March 11, 2010 | Unregistered Commenterian

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