New Pure Silver Play Co. to Debut on TSX Venture Exchange

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Argenta Silver Corp. (AGAG:TSXV), a new pure silver play company with a sizable asset in Argentina, is about to start trading on the TSX Venture Exchange under the ticker symbol AGAG. Subject to Exchange's final approval, the company will start trading on Monday, October 28, 2024.

"Many people expect this to have a big run, myself included," Chen Lin wrote in What is Chen Buying? What is Chen Selling? on Oct. 4.

This new venture is the realization of a longtime dream of Frank Giustra, chief executive officer of the Fiore Group, a private firm managing a portfolio of private equity investments and companies.

"My whole life, I wanted to do a pure primary silver play, and I've never been able to pull it off because I hadn't found the right asset," Giustra told Kitco News in a Sept. 11 interview. "Those assets are very few and far between. They're hard to find."

Argenta Silver's project, called El Quevar, became available when the previous owner, Golden Minerals Co. (AUMN:NYSEAMERICAN), wound up in financial straits. Geologist Joaquin Marias told Giustra about the project and its status. Supported by the Fiore Group, Butte Energy Inc. acquired El Quevar in early September for US$3.5 million (US$3.5M), as noted in a news release. With this deal, only cash was granted to Golden. 

"[Argenta] is a new silver company that has been created with a great asset, Marias, now Argenta's vice president of exploration and development, told Streetwise Reports. "This is a fresh start, a new company with a huge background force pushing it to the future. It's like an early-stage Pan American Silver."

Highlights of the Story

A primary reason investors should look at Argenta Silver, noted Marias, is Giustra and his Fiore team's experience and proven track record, in the mining industry, in building natural resource companies and creating shareholder value. The mining companies Giustra has been involved with include Goldcorp Inc., Leagold Mining Corp. (LMC:TSX.V; LMCNF:OTCQX) and currently, NexGold Mining Corp. (NEXG.V:TSXV; NXGCF:OTCQX; TRC1.F:FRA).

Also notable about Argenta is the 100% silver current resource of El Quevar, said Marias, the third largest silver deposit in Argentina, behind Pan American Silver Corp.'s (PAAS:TSX; PAAS:NASDAQ) Navidad and AbraSilver Resource Corp.'s (ABRA:TSX.V) Diablillos. According to a preliminary economic assessment done in 2018, El Quevar's resource is about 45.3 million ounces of silver at 482 grams per tonne silver (g/t Ag) on the indicated category, and 4.1 million ounces of silver at 417 g/t Ag in the inferred category, "a really high grade for a primary silver play still open for exploration," Giustra said. "I think we can increase those ounces with a robust exploration program."

To date, US$60−70M have been put into El Quevar already, more than 100,000 meters (100,000m) have been drilled and the project is drill ready. All of the necessary infrastructure is in place, including a built-out camp, roads and a 1,250m underground exploration tunnel at the site and within 10−20 kilometers (10−20 km), a national road, a town, an international gas pipeline and two photovoltaic parks.

"We just have to go there, make our plans, and start to explore and drill," Marias said.

Argentina: Attractive for Mining

El Quevar is in one of the most attractive geological corridors in the Andes, straddling the Argentina-Chile border, noted Marias. On the Chilean side, it is home to the Chuquicamata copper mine, in operation since 1910, according to the U.S. Geological Survey. The largest open pit at this operation is 1 km deep, 3 km wide and 5 km long, roomy enough to fit New York City's Central Park.

"The potential that [the corridor] has, it's huge," Marias said. "It could host porphyry copper and high-grade epithermal gold systems, too."

El Quevar is in Salta, the highest ranked Argentine province in terms of perception of public mining policies, according to the Fraser Institute's 2023 annual report as noted in a May 16 Panorama Minero article. Salta also is the most attractive province for investment in the mining sector.

"Many people expect this to have a big run, myself included," Chen Lin wrote in What is Chen Buying? What is Chen Selling? on Oct. 4.

As for Argentina, it too stands out in Fraser's latest survey results, as the world's fourth most attractive jurisdiction for mining investment. The Center for Strategic & International Studies, in a May 14 article, attributed this to its mineral potential and the stability of its investor-friendly mining policies. In Latin America, Argentina has remained one of the Top 3 performers since 2018.

According to the center, the country's mining sector primarily is governed by the 1993 Mining Investment Law. It offers a 30-year period of fiscal stability for tax and custom duties; no tax on capital goods for equipment, spare parts and raw material imports for mining; and other tax incentives at every stage of project advancement. The 1993 Foreign Investment Law provides equal treatment to foreign and domestic investors.

Under a new law, No. 27,742, or Ley Bases, passed in June, under the auspices of new president Javier Milei, mining companies developing a project of at least US$200M could qualify for a series of benefits in tax, customs and foreign exchange regulations, such as reduced income tax, according to a the company Mayer Brown and Hallgarten & Co. The incentive set for such large investments is called the RIGI.

"Silver Remains Cheap"

Late last month, the price of silver, a safe haven investment and critical material for various industrial applications, rallied to over US$32 per ounce (US$32/oz), hitting its high since 2012, reported Mining.com on Sept. 26. (In comparison, its all-time peak was nearly US$50/oz in 2011.)

"Silver has become one of the year's best-performing major commodities, benefiting from the Fed's pivot toward easier monetary policy last week and the prospect of further rate cuts, which support nonyielding metals like silver," noted the article.

Today, its fundamentals, the global macroeconomic environment and gold being in a bull market all bode well for the future of the silver price.

"Silver is going to continue to rally over the coming quarters because of the [Fed's] consecutive rate cuts and as China's stimulus could continue for some time," Amelia Xiao Fu, head of commodity markets at BOCI told Kitco News. She said she expects to see silver reach US$37/oz. The article noted that China's recently announced stimulus is the largest since the pandemic.

Peter McGuire, CEO of XM Australia, told The Economic Times, "I feel as though at US$32 a troy ounce, that is extraordinarily cheap. If you are looking at the gold:silver ratio, I think there is more upside for silver than there will be for gold. And once it starts to bite, it is really going to be onward and upward because, quite simply, you have got a huge demand."

Kitco wrote that "silver remains cheap," and the best investment opportunity right now is in silver equities. "Although silver-related large-cap miner and royalty streaming stocks have experienced outsized gains during the recent silver surge, many quality silver juniors are still presenting low-risk entry points," noted the article.

As far as supply, silver is expected to have its fourth consecutive year of a global deficit in 2024, according to an International Banker article citing data from The Silver Institute, and the deficit is expected to increase this year by 17%. This is due to a 2% growth in demand and a 1% drop in total supply.

The greatest demand for silver is coming from the solar power and electric vehicle industries. According to Mining.com, the average photovoltaic panel requires 20 g of silver, and each electric vehicle needs 25−50 g.

The photovoltaic market is predicted to increase 20% this year, wrote Ahead of the Herd's Richard Mills on Oct. 1. Demand for silver for use in industrial fabrication is expected to rise 9% this year to an all-time high. Demand for the metal for jewelry making is forecasted to increase 4% and for silverware manufacturing, 7%.

The Catalysts: Exploration Progress

Argenta plans a two-phase exploration program at El Quevar, Marias said. The start and results of each phase could catalyze the company's stock.

The first phase will involve analyzing all of the available data, conducting geophysics work and surface sampling, and creating a new geological model for the project, which will aid Argenta in identifying drill targets within and outside of El Quevar's current resource area. Phase two will entail drilling the resource and exploration targets.