Tahoe Resources

Tahoe Resources

Today I made a different stock purchase from my regular buys. This one is a high risk/ high reward pick. I have been watching the stock since the Escobal silver mine in Guatemala got suspended June last year. They used to be a dividend company but had to suspend it last August due to the closure.

About Tahoe Resources

A new leader in precious metals, they operate the Escobal silver mine in Guatemala, the La Arena and Shahuindo gold mines in Peru and the Timmins West and Bell Creek gold mines in Canada.

tahoe resources

Court Battle

You most likely have heard of it, but if you haven’t the Escobal mine is currently shut down. The farmers and people who live around the mine claim its destroying the environment and polluting the water. Tahoe was granted a 25-year license to exploit a 20 sq km area in San Rafael las Flores – almost a quarter of the municipality’s territory – in April 2013 despite numerous community votes against the mine. The Environmental Impact Study says the tests are flawed and shouldn’t of passed. Tahoe insists all license’s were obtained legally. Now it’s a court battle.

Now I would like to state I’m a pretty big environmentalist. I’m not gonna jump in front of a dozer or anything but do believe we need to step up our game and protect nature and the environment before its too late. Hence why I love reneable’s. Hopefully Tahoe will implement some new techniques and filtering etc to improve the process and less negatively hurt the environment and people who reside there.

tahoe resources

I love Gold.

The situation going on in Guatemala is a huge blow at the moment to Tahoe Resources balance sheet. Their gold mines are producing though.. The 2017 guidance estimates are up and the costs seem to be on the lower side of the guidance sheet.

The Peru mine has been upgrading its machines and is on track to reach its goal of turning over 36 thousand tonnes per day in mid 2018. They are doubling production at the bell creek mine and the shaft expansion is expected to be done in mid 2018 as well. They expect to produce 80,000 ounces of gold per year in 2020.

Tahoe is studying and exploring other potential mine sites at the moment as well.

While the other mines are doing good and the mines are picking up production. This buy is based on the Escobal mine going back online in 2018. I think it will, and would be a huge catalyst to drive the stock price way up and even maybe reinstate the dividend.

The Escobal Mine

Escobal is the 3rd largest primary silver mine in the world. (Cannington mine in Australia is #1, followed by Fresnillo mine in Mexico) The mine has produced 3 straight years of over 20 million ounces of silver before the closure. All in sustained costs under 10 dollars a ounce of silver. (Current spot price 17.22 usd per ounce)

The Stock

Tahoe Resources is currently trading at a all time low. When the stock first came out (June 11, 2010) it traded at $6.70 a share. It’s currently 5.79 per share. The current P/e ratio is 14.55. Tahoe will release it’s 4th quarter 2017 report / year ending on Feb 22.

Roadmap2retire does a yearly roundup for bloggers to make their stock picks for the year. It’s just for fun and the winner just gets bragging rights and probably some extra traffic to their website at year end. Tahoe Resources was my pick for the year. I feel with all the hype of crypto’s and dope stocks at the moment, a decent pullback from one of those might spark a little market selloff and people will rush back into the precious metals for safety. Again the Escobal mine going back online will be the major catalyst for capital gains. Check out all the pick’s here. Good Luck Everyone!



I have thought about buying Tahoe for awhile now, and my recent pick on Roadmap’s spreadsheet made me want to get my feet wet. How much fun would it be to have a great return but not hold any stocks? I bought 200 shares of Tahoe Resources @ 5.79 per share. There is no dividend, my forward dividend’s wont go up from this purchase.

Conclusion

I feel the stock has really been beat up on the news of the suspension, considering they are at all time lows. If the court’s approve the mine to go back online, expect a very nice pop in stock price. Again this is a high risk/high reward play and I don’t think I will be long this position. But who knows if the mines are all firing on all cylinder’s and the dividend is reinstated maybe.

What do you think?

Cheers

Hey I’m Rob, creator of Passive Canadian Income.

In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey!

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8 Responses

  1. Leo T. Ly says:

    Currently, I don’t own this stock but I do own Teck Resources. Commodity stocks had been quite volatile for the last couple of years and I think that it’s a little bit too volatile for me. I am looking to sell most of my commodities stocked in a few years.
    Leo T. Ly recently posted…My Personal Net Worth Review – 2017 Year-endMy Profile

    • Well if you got teck when it was like 2-4 bucks you did awesome. I remember looking at it and thinking coal is dead. Less than a yr later the stock skyrocketed. Heres hoping Tahoe will do the same. Precious metals hasnt had the rebound alot of metals have. Hopefully its their time!

  2. Cris says:

    I own Tahoe and I am also confident that will recover. Initially I was looking to buy the stock when the price was around $10 but the issue in Guatemala affected the price and I got in a few times for an average of ~$6. I sold half of my position at $7.90 and I keep the other half (250 shares) for a better recovery.
    I am not a fan of investing in mining/gold but still i consider a good idea to have a little invested as a leverage or when the investment seems to be a good deal.
    Time will say if is a good investment.
    Additional to this stock I own Goldcorp, Aliogold and gold ETF.

    • Hey Cris. Like i said I think the mine will come back online. So here’s hoping it gos up. Goldcorp has looked good too. Just in thod high market im trying to bottow dwell a bit lol. Maybe its a bad move, if it is it will be a learning experience either way.

  3. Cris says:

    It is getting hard to find good investments these days as almost all shares are up.
    Anyway, the utilities and telecommunications seems to go lower which is a good opportunity for me. I already have a few price targets to buy and I am looking to the following companies:
    ATCO, Fortis, Emera , CU and Valener, Telus and Shaw, (I own Bell already).
    I know that they are sensible to the rate increase but I prefer to go for a more safe stock as a correction might come to the market.

    • Great points. I have seriously been debating putting money in fortis on the pullback. (Might wait on rate announcememt though) My basic materials sector needs some work now though. The longer i invest though the more i realize long term dividend growth stocks are the way to go and fortis would be a great addition!

  4. Jan Zac says:

    Hello ,

    I saw your tweets and thought I will check your website. Have to say it looks very good!
    I’m also interested in this topic and have recently started my journey as young entrepreneur.

    I’m also looking for the ways on how to promote my website. I have tried AdSense and Facebok Ads, however it is getting very expensive. Was thinking about starting using analytics. Do you recommend it?
    Can you recommend something what works best for you?

    I also want to improve SEO of my website. Would appreciate, if you can have a quick look at my website and give me an advice what I should improve: http://janzac.com/
    (Recently I have added a new page about FutureNet and the way how users can make money on this social networking portal.)

    I have subscribed to your newsletter. 🙂

    Hope to hear from you soon.

    P.S.
    Maybe I will add link to your website on my website and you will add link to my website on your website? It will improve SEO of our websites, right? What do you think?

    Regards
    Jan Zac

    • Hey Jan Zac, welcome. Always nice seeing a new face. I saw your site, looks nice. Best of luck with it! I haven’t spent a cent on ads to be honest. Seo is pretty important as it improves your ranks in google search. I use yoast seo plugin. Hope that helps. Most of my views are from people book marking the site and coming back, search engines, social media and from commenting on other blogs. The community aspect is huge and will benefit you in numerous ways if your active. Right now I dont see a blogroll or anything on your site. If you want to add mine, I’ll gladly add yours. Yes it would help seo any link backs to your site help!
      Congrats on taking the first step of starting, wish you all the best.
      Cheers
      Rob

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