Metallic Minerals Corp. (MMG:TSX.V; MMNGF:OTCQB) announced it has filed the National Instrument 43-101 technical report for its inaugural mineral resource estimate for its 100%-owned flagship Keno silver project in the Yukon.
The resource estimate, first announced in February, noted a combined underground and in-pit total from four deposits for inferred resource of 2.5 million tonnes (Mt) at 223 grams per tonne silver equivalent (g/t Ag Eq) equating to 18.16 million ounces (Moz) of contained silver equivalent.
"The inaugural resource, which defined 18.16 million ounces of silver equivalent (inferred) at the Keno Silver project, is a major milestone for the project," Metallic Minerals President Scott Petsel said. The "Keno Silver Project, neighboring Hecla Mining's current Keno Hill operations, has very clear opportunities to grow the 2024 Resource Estimate quickly and efficiently with additional drilling while continuing to advance early-stage targets to new discoveries. The project team is currently working to finalize the next phases of exploration to include additional resource expansion drilling in 2024."
This 2024 Resource Estimate is contained within four of 11 target areas that have returned positive results from initial drill testing to date, the company said, with 42 additional targets identified on the 171 square kilometer project since 2016 remaining undrilled.
"Having identified the productive structures and defined this very significant mineral resource, the company expects to be able to add significant ounces during subsequent drill campaigns," Metallic Minerals noted in a release.
Those results, combined with results from Keno and a royalty agreement signed with Parker Schnabel of the Discovery Channel's "Gold Rush" on other claims in the Yukon, led Couloir Capital to rate the stock a Buy last year.
Newmont Corp. (NEM:NYSE) — formerly Newcrest Mining Ltd. — invested CA$6.34 million in Metallic to advance another core project for the company, the La Plata copper-silver-gold-platinum group-elements project in Colorado.
"Newcrest was one of the first to recognize the potential (of La Plata) following the announcement of our discovery drill results in early 2023," Metallic Minerals Chief Executive Officer Greg Johnson said.
The company announced an expanded NI 43-101 resource in July 2023 for La Plata of 1.2 billion pounds copper (Cu) and 17.6 Moz silver (Ag) at an average grade of 0.41% Cu Eq, 0.37% Cu, and 3.72 g/t Ag, using a 0.25% Cu Eq cutoff grade.
Those results, combined with results from Keno and a royalty agreement signed with Parker Schnabel of the Discovery Channel's "Gold Rush" on other claims in the Yukon, led Couloir Capital to rate the stock a Buy last year. In an updated research note on September 27, it set a fair value per share estimate of CA$0.74. The stock was CA$0.34 per share on Monday morning.
The Catalyst: Estimate Has Potential for 'Major Expansion'
According to the company, underground inferred mineral resources include the Formo deposit, which contains 12.77 Moz Ag Eq (7.11 Moz Ag, 3,000 ouches gold (Au), 36.02 million pounds (Mlbs) lead (Pb), and 66.14 Mlbs zinc (Zn) within 1.08 Mt grading 369 g/t Ag Eq (206 g/t Ag, 0.08 g/t Au, 1.52% Pb, and 2.79% Zn).
The Formo deposit is directly adjacent to the highway and power lines that feed the central Keno Hill mill, which is operated by Hecla Mining Co. (HL:NYSE), the largest primary silver producer in Canada and the USA, Metallic Minerals said. The Formo deposit directly adjoins Hecla's Keno Hill property, where Hecla is actively mining the nearby Bermingham deposit.
In-pit Inferred mineral resources include Caribou, Fox and Homestake and contain 5.40 Moz Ag Eq (2.70 Moz Ag, 5,500 ounces Au, 8.86 Mlbs Pb, and 32.95 Mlbs Zn) within 1.46 Mt grading 115 g/t Ag Eq (58 g/t Ag, 0.12 g/t Au, 0.28 % Pb, and 1.02 % Zn), the company noted.
The 2024 Resource Estimate represents the equivalent of several years of production through the Keno area mill based on production guidance provided by Hecla, which is planning to mine up to 4 Moz Ag at Keno this year, Metallic Minerals said.
Important catalysts to look for with the company now include further drill results for La Plata, an expanded La Plata resource, and exploration plans for the coming 2024 field season.
The resource estimate has "clear potential for major expansion within this world-class silver district, directly adjacent to one of the world's highest grade silver mines," Petsel said.
"With 42 early-stage targets developed on the property, 11 targets that have been drill tested with significant results, and now four target areas that have advanced to inferred resources, we see this milestone as a foundation from which there are very clear opportunities to quickly and efficiently grow the 2024 Resource Estimate with additional drilling while continuing to advance early-stage targets to new discoveries."
The Keno Silver project is in the historic Keno Hill Silver District of the Yukon, which has produced more than 200 Moz silver (Ag) at an average grade exceeding 1,300 g/t, the company has said.
Hecla's Keno Hill mines, also in the same district, feature an estimated life-of-mine production grade of 804 g/t and a fully operational mill complex, highway access, and grid power.
Metallic Minerals said its project covers mainly the eastern portion of the district and was host to eight historical silver mines, five of which had average production grades of over 1,000 g/t.
Important catalysts to look for with the company now include further drill results for La Plata, an expanded La Plata resource, and exploration plans for the coming 2024 field season.
'It's About Time' for Silver
There has been excitement in the silver market recently, and some analysts are bullish on the metal. After recently correcting from fresh highs of US$29.80, silver rebounded to US$28.50 on Monday.
Silver is the most conductive element in nature. It's also important to the green economy transition because it's used to coat electrical contacts in computers, phones, cars, and appliances. It's also an important element in solar technology.
In an update last year, the World Silver Institute said there was a deficit of 140 million ounces (Moz) between supply and demand for silver in 2023, compared to 237.7 Moz in 2022. However, the institute also noted that global output shrunk by 2% in 2023.
"Mined output over the longer term, four to five years out, is forecast to begin to decline," the institute said in its World Silver Survey 2023. "This will be due to losses from grade decline and reserve depletion at existing operations exceeding the new production that is expected to come online from the current project pipeline."
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Metallic Minerals Corp. (MMG:TSX.V; MMNGF:OTCQB)
Asset manager Chen Lin, author of the What is Chen Buying? What is Chen Selling? newsletter, said he was "extremely excited" about silver's future.
"Silver should make a move; it's about time," Chen said. "The (World) Silver Institute will release their new market trend reports on April 17, and I expect another huge deficit for 2024. That should excite the market. I see silver hitting new highs."
Ownership and Share Structure
About 17% of Metallic Minerals is owned by management and insiders, including CEO Johnson with 4.15 %, Independent Director Gregor Hamilton with 0.92%, and the president, Petsel, with 0.5%.
About 34% is owned by strategic investors, including Newmont's 9.32% and mining financier Eric Sprott, who owns 14.5%.
About 22% is owned institutionally. The rest, 27%, is retail.
Its market cap is CA$55 million, with 166.99 million shares outstanding, 123.02 million of them free-floating. It trades in a 52-week range of CA$0.44 and CA$0.195.
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- Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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