Robert Quartermain the President of Silver Standard Resources Incorporated has referred to his companies stock as a Call Option in the silver market, Is he right?

This was during an interview on ROBtv on 08 March 2006, so lets take a look.

Silver Standard controls the world’s largest published in-ground silver resources of any publicly traded silver company, listing their reserves as over 508 million ounces of silver. Inferred resources total over 446 million ounces of silver. We are talking about one billion ounces plus here.

Geographically, their portfolio of properties covers Argentina, Mexico, Chile, Peru, the United States and Australia.
We are comfortable with their strategy of aggressively acquiring high quality silver projects with defined resources in preparation of higher silver prices. As a company it has been around for about sixty years surviving the last down turn that lasted twenty years or so and acquiring projects on very advantageous terms.

Silver Standard is well financed, has no long-term debt, no significant environmental liabilities and no hedging or derivatives program. As investors we have difficulty with silver mining stocks that are currently hedging their portfolio as we believe the upside potential of silver is enormous. This stock is certainly exposed to any movement in the silver price so we must be prepared for volatility with Silver Standards stock price. Whether we will experience the effect of a Call Option remains to be seen however, but we believe it will be an exciting run before this Bull Market in silver ends with a dramatic conclusion.

Silver Standards stock is traded on the NASDAQ as SSRI and on the TSX as SSO

This company had a Market Capitalisation of £1.0 billion and its shares have fallen from a recent high of around $24.0.

From the chart we can see that Silver Standard has bounced from its 200 day moving average at approximately $16.0 level. We are expecting some consolidation before moving higher but in twelve months time this stock will look like what it is – a bargain at $19.98.