Silver Mining Co. Reports Strong Q1 2023 Production Results

The first quarter of commercial production bodes well for Silver X Mining Corp. (AGX:TSX.V). The company reported steady performance in production results at its 100%-owned Nueva Recuperada project for the three months ending on March 31. 

Silver X Mining is a mining company that specializes in the exploration and extraction of silver resources. With a focus on silver, the company aims to capitalize on the growing demand for precious metals in various industries, including electronics, solar energy, and jewelry. The company employs advanced exploration techniques and technologies to identify and develop high-potential silver deposits.

By leveraging its expertise and strategic partnerships, it aims to become a leading player in the silver mining industry. The company is committed to responsible mining practices, ensuring environmental sustainability and community engagement in its operations.

On May 4, technical analyst Clive Maund said, “Silver X Mining is an immediate strong buy as it is in the process of reversing to the upside after a heavy correction. At the time of writing, it is putting in a bullish “inverted hammer” candle.”

Total Production of 282,687 AgEq

The results from this first quarter noted that production was ramped up during this quarter. However, head grades were lower in light of the stope selection of lower grading blocks, which was done to avoid poor gold recoveries for higher-quality ores while the plant's gold circuit was in repair.

First quarter production results are as follows:

• Declared commercial production in January 2023 and returned to targeted throughput in January after a period of social disruption in Peru.
• Total production of 282,687 silver equivalent (AgEq) ounces with an average head grade of 277 grams per tonne AgEq.
• Record throughput of 17,239 tonnes at 575 tonnes per day in March 2023.
• Processed 265 % more AgEq ounces in the first quarter of 2023 than in the first quarter of 2022,  with 358,727 AgEq ounces compared to the 98,327 AgEq ounces in 2022.

President and CEO Jose M. Garcia commented on these results, saying, "I am pleased to report positive momentum and strong operating performance in our first quarter of commercial production at Nueva Recuperada . . .  Despite supply shortages in the fourth quarter of 2022 due to road blockages in Peru, we achieved [a] record performance in March of 17,500 tonnes processed at a rate of 575 tonnes per day. Throughput continues to increase along with improved ore selectivity and stronger mine development translating into better head grades. These outcomes reflect Silver X's dedication to efficiency and signal the potential for positive results in future quarters."

In a May 12 research report from Red Cloud, analyst Timothy Lee noted the production results, saying, "Overall, the results are about in-line with our expectations. The throughput was slightly above our estimate, but given the lower grades, the oz AgEq was slightly below our estimate for the quarter. Silver X stated that ore selection should lead to higher average grades going forward, and we anticipate that this, combined with further ramp-up, will lead to increased production in future quarters."

With this, Lee reiterated his Buy rating on the company, with a CA$1.05 target price.

Why Silver?

In the world of investments, silver has long held a position of allure and value. Known for its versatility, industrial applications, and historical significance, silver continues to attract the attention of investors seeking diversification and potential profit.

Heightened interest in a green economy and silver's use in solar cells, smart batteries, and electric vehicles have caused an increased appetite for the metal. The rising uncertainty in the U.S. dollar has also caused investors to lean into the metal. 

Silver has also garnered the attention of a number of analysts and newsletter writers. On May 10, Rick Mills of Ahead of the Herd noted that conditions in 2023 have set up gold and silver.

He wrote, "As concerns of undersupply linger on, the precious metals market will be well-positioned to maintain its bullish trend from the start of 2023."

Michael Ballanger of GGM Advisory Inc. also commented on the sector in an April post. He said, "Gold and silver remain very much in uptrends, with no better confirmation than the GSR trading under 80 and threatening to break down through 78.00, the uptrend line drawn off the 73.85 low back in December."

Catalysts

With burgeoning demand for silver, Silver X Mining is not slowing down and has numerous up-and-coming catalysts.

First, the company plans to file an Environmental and Social Impact (ESIA) Statement later this year to expand capacity from 720 tpd to 2,500 tpd. The company also expects to continue drilling at its Tangana mining unit in the Nueva Recuperada Silver District. Silver X will also drill throughout the district when able, with the intention to increase and upgrade its resources. 

The development of Silver X's Plata project is also on the books, with it estimated to be brought online by 2024/2025.

Ownership and Share Structure

Management and insiders at Silver X owns 17% of shares. President and CEO José García owns 8.67%, with 13.64 million shares. VP of Corporate Development and Director Sebastian Wahl owns 8.17%, with 12.87 million.

12.39% is held by strategic investor Baker Steel Resources Trust Ltd., with 19.50 million shares, per Thomson Reuters. 

Institutional investors hold 9.56% of the company's stock, according to Reuters. U.S. Global has 5.31%, with 8.36 million shares. Earth Resource Investment Group has 3.07%, with 4.83 million, and Sprott Asset Management LP has 1.18%, with 1.85 million. 

The rest is in retail.

At the end of 2022, the company reported CA$1 million in the bank.

Silver X has 157.7 million shares outstanding, including 174.3 million fully diluted shares. It has 16.5 million warrants, stock options and RSUs.

There are 8,147,827 outstanding warrants at an average price of CA$0.379 each. It trades in the 52-week range between CA$0.17 and CA$0.48, and has a market cap of CA$57.6 million.

Important Disclosures:

1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Silver X Mining Corp., a company mentioned in this article.
2. Katherine DeGilio wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 
3. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Silver X Mining Corp. Click here for more information.
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