Silver X Mining Corp.'s (AGX:TSX.V) Q1/24 production results from its Nueva Recuperada mine in Peru were positive and better than in the previous quarter, reported Red Cloud Securities mining analyst Timothy Lee in an April 25 research note.
"The stepwise improvement from Q4/23 to Q1/24 contrasts with the company's pre-shutdown quarterly volatility in operational performance," Lee wrote. "Overall, this is a positive step in the ramp-up of production at Nueva Recuperada."
213% return potential
Red Cloud reduced its target price on Silver X to CA$0.75 per share from CA$0.80 per share to reflect the company's current capital structure, including its just completed financing, noted Lee.
Despite the lower target price, the possible gain for investors remains high, at 213%. This is based on the producer's current share price of about CA$0.24 per share.
The Canadian silver miner is a Buy.
Production numbers reviewed
Silver X's Q1/24 production results from Nueva Recuperada were generally better quarter over quarter (QOQ), reported Lee, who discussed them.
When comparing Q1/24 to Q4/23, Silver X processed more tonnage, but the head grade of it was slightly lower: 37,903 tons of ore at 299 grams per ton of silver equivalent (299 g/t of Ag eq). The amount the company processed was 10.5% higher and beat Red Cloud's estimate. The grade was 4.8% lower QOQ.
Total Q1/24 production at the project in Peru was 298,047 ounces of Ag eq, higher than in Q4/23 by 1.9% and surpassing Red Cloud's estimate of 250,670 ounces Ag eq by 19%.
As for specific metals, recoveries in Q1/24 of silver, lead and zinc were 89.2%, 88.9% and 85.2%, respectively. All of these figures were slightly better QOQ. The recovery of gold, of 61.7%, though, was 12.5% lower than in Q4/23.
According to Silver X's management, the analyst relayed, in Q1/24 the company achieved its production targets and continued its efforts to decrease operational and corporate costs.
Completed financing
As for Silver X's recent financing, reported Lee, the company generated CA$5 million gross from a nonbrokered private placement in which 27 million units were issued at CA$0.18 apiece. Each unit comprised one share and one full warrant.
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