Members of the management team behind Silver X Mining (AGX:CA) previously sold Lithium X Energy for $265 million ($265M) in cash and Gold X Mining in an all-share deal valued at $315M. It seems X marks the sweet spot for investors.
“(Throughput at Recuperada) is basically 600 tonnes a day. We want to make it four times what it is now."
But long before there is any talk of selling Silver X, the junior is on a mission to boost the existing resource at its 15,000-hectare Nueva Recuperada project and, by 2025, to quadruple throughput at its Recuperada mill to around 2,500 tonnes per day (2.5K tpd), up from today’s roughly 600 tonnes.
“(Throughput at Recuperada) is basically 600 tonnes a day. We want to make it four times what it is now. That's the right size for the district based on the number of orebodies that we have. They have yet to be drilled but we can see that at that sort of tonnage the mining operation is going to become really competitive – good grades, good cost, good productivity. And then Silver X will become a mid-tier silver producer in Peru. That's the objective,” explains Silver X’s Chief Executive Officer José Garcia.
Silver X plans to conduct a scoping study in 2022 to make an economic case for any mill expansion. The mill restarted production in 2020 at 400 tpd, and throughput has since climbed to around 600 tpd – its rated capacity.
By the end of July, the Tangana mine had sold $6.5M in polymetallic concentrates, and Garcia says Silver X will more than double that amount by the end of the year. The cash will help fund ongoing exploration.
"As of late August, some 6,660 meters over 34 drill holes had been drilled on the Tangana vein systems."
Silver X went public a few months ago when Oro X merged with Latitude Silver. Silver X subsequently raised $14M and launched a 25,000-meter drill program to boost the Nueva Recuperada resource and move some of it into the Measured and Indicated category.
Drilling will continue this year and into 2022. As of late August, some 6,660 meters over 34 drill holes had been drilled on the Tangana vein systems.
The current National Instrument 43-101-compliant resource at Nueva Recuperada is 7.3 million tonnes (7.3Mt) grading 130.38 grams per tonne silver (130.38 g/t silver), 3.17% lead, and 2.04% zinc. Silver X expects that drilling will push it well above 10 Mt by late next year.
"The Tangana vein has an inferred resource of 4,840,015 tonnes grading 116.33 g/t silver, 3.35% lead, and 1.63% zinc."
Nueva Recuperada consists of the Tangana mine, with its 600 tpd precious and base metals operation; Esperanza, a past-producing silver-polymetallic mine that Silver X will further drill test; and Maria Luz and San Antonio, two prospective silver vein systems in the Tangana mining unit.
The Tangana vein has an inferred resource of 4,840,015 tonnes grading 116.33 g/t silver, 3.35% lead, and 1.63% zinc (it’s included as of the overall Nueva Recuperada resource).
Silver X plans to develop portals and other mine infrastructure to get to the Cauca, Morlupo and Tangana 2 veins that it had previously discovered at Tangana.
Silver X recently acquired a series of silver-lead-zinc concessions northwest of Tangana that it has since dubbed Tangana West.
The 250-hectare Tangana West is part of an ongoing effort to consolidate a fragmented past-producing silver district. It gives Silver X what management believes is 1.3 km more strike length along its original Tangana project, which is south and east of Tangana West.
"Tangana 1 and 2 are roughly 1-meter wide at an average grade 286.71 silver-equivalent ounces. Both extend over a strike length of 1.7 kilometers."
Silver X now controls about 3 kilometers of the Tangana silver-polymetallic mineralized system. Company data suggest it could run 500 meters vertically.
Recent channel sampling work on Tangana West identified high-grade veins that reached as high as 9,400 grams per tonne silver (9.4K g/t silver), 2.7% lead, and 1% zinc over 1.5 meters.
Two mineralized silver-gold-polymetallic veins, known as Tangana 1 and 2, on its Tangana mine are roughly 1-meter wide at an average grade 286.71 silver-equivalent ounces. Both veins extend over a strike length of 1.7 km.
“(Tangana West) gives the company great potential for expanding its high-grade production. We are continually assessing opportunities throughout Peru and Latin America as we grow our resource base," says Silver X CEO José Garcia.
Silver X acquired the concessions from Sociedad Minera de Responsabilidad Limitada Las Animas for US$5,000 per month or a 4% production royalty.
South of Nueva Recuperada, Silver X also owns the Coriorcco gold project, a 2,000-hectare land package with 17 known mineralized veins at surface that are up to 2.5 meters wide in a 700-metre by 800-metre zone of intense hydrothermal alteration and epithermal mineralization.
Silver X says assay results from samples taken along over 400 meters of underground development indicate grade improves with depth but these are yet to be drill tested. The average grade from surface sampling is 1.91 g/t gold over 181 samples.
The Silver X management team has some names that have made junior mining investors considerable returns. Since 2004 Silver X Lead Advisor Paul Matysek, known for his X-branded companies, has been involved with the sale of no less than five juniors. The combined value of those deals is a gaudy $2 billion.
Director Darryl Cardey cofounded Underworld Resources and Northern Empire Resources. Underworld was sold to Kinross Gold Corp. (K:TSX; KGC:NYSE) in 2010 for $139M, while Coeur Mining Inc. (CDE:NYSE) acquired Northern Empire in 2018 in an all-share deal valued at $117M.
Silver X has about 114 million shares outstanding or 125 million fully diluted.
"We really think that this should re-rate very quickly ... I see at least 3 times the price."
Management owns about 35% of the company, with Garcia owning 15% himself.
“We have a mine and a processing plant that is operational. We really think that this should re-rate very quickly," Garcia tells Streetwise.
"From where (the stock price) is, I see at least three times the price,” he concluded.
The silver junior trades in a 52-week range of $0.32 and $0.90.
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