Silver X Mining Corp. (AGX:TSX.V) announced it has signed a 15-year social agreement with the community of Carhuapata in Huancavelica, Peru.
Combined with a 12-year agreement signed last November with the community of Huachocolpa, the company said the new social contract grants Silver X access to the totality of the Plata Mining Area.
Red Cloud Securities analyst Timothy Lee noted in an updated research note on May 24 that the agreements give "unrestricted" access to the 3,829-hectare (ha) project in the Nueva Recuperada silver district of Peru.
"Both agreements highlight the strong social support for Silver X's activities in the region," wrote Lee, who rates Silver X a Buy with a CA$0.75 per share target price. "Plata consists of a historical mining area with extensive drilling and sampling data, which indicate the presence of several high-grade mineralized veins on the property. It hosts a historic non-compliant resource, and Silver X plans to produce an updated MRE for the overall Nueva Recuperada project by the end of 2024."
The company noted the 15-year agreement covers 100% of the project and was given unanimous approval by Carhuapata's community assembly.
"This agreement with the Carhuapata community marks another significant milestone in our efforts to activate and rejuvenate an entire mining district," said Silver X Chief Executive Officer Jose Garcia. "Plata holds enormous potential and is crucial for the organic growth of our company."
The Catalyst: Important Part of Growth Strategy
Silver X noted that the Plata mining area is "a significant component of Silver X Mining's growth strategy" and includes 17 surface-exposed mineralized veins, offering substantial exploration potential.
Historical data from about 30,000 meters of drill cores and 8,000 meters of underground samples indicate rich silver-polymetallic deposits, with a non-compliant historical inferred resource of 448,812 tonnes grading 220.81 grams per tonne silver (g/t Ag), 2.55% lead (Pb), and 4.58% zinc (Zn), the company said.
The data also show the existence of several high-grade silver and polymetallic veins, some of which were mined in the past century, Silver X said.
"Both agreements highlight the strong social support for Silver X's activities in the region," wrote Lee, who rates Silver X a Buy with a CA$0.75 per share target price.
"The support from Carhuapata is instrumental as we harness this potential, driving shared prosperity for both the community and Silver X Mining," Garcia noted. "We are enthusiastic about the future and confident in the transformative impact this project will have on our operations and the local region."
Lee with Red Cloud agreed and said the project could play an important part in the company's future growth plans.
"Meanwhile, the focus in the near term remains on its Tangana Mining Unit, where operational improvements and cost control measures have begun bearing fruit, as highlighted in the recently released Q1/24 results," the analyst wrote.
"The company's cost control measures are reflected in both lower operating and G&A expenses, and this results in positive operating income, operating cash flows, and Adj. EBITDA, which are significant improvements from prior periods," Lee noted in a May 17 note after the results were released. "With costs under control, AGX is strongly positioned to benefit from continued top-line growth with production ramp-up in a strong commodity price environment."
Silver X aims to increase its processing capacity this year to 700 tonnes per day (tpd), leveraging both operational improvements and the strategic development of its mining units.
'A Strongly Bullish Case for Silver'
According to the Silver Institute's "World Silver Survey 2024," industrial demand for the metal is forecast to rise by 9% this year to a new record high, and modest growth in the global economy will fuel gains across all segments of demand.
"As with the last two years, end-uses in the green economy will remain the main drivers of demand along with a resurgence in consumer electronics," the survey said. "That said, as new installations plateau, the notable gains in PV of the last two years may be difficult to replicate. That aside, geopolitics and trade disputes have the potential to disrupt our forecast. The structural decline in photographic demand is also likely to continue in 2024."
Technical Analyst Clive Maund said the timing should also be right for Silver X. He recommended his readers stay long on the stock and rated it an Immediate Strong Buy for all timeframes.
Silver climbed to an 11-year high this week, climbing above US$30. It has since settled at US$30.29 on Friday. The price benefited from silver's safe-have characteristics, the softness of the U.S. dollar, and its utility as an industrial application, Investopedia noted.
In addition to being a precious metal, silver is the most conductive element in nature. It's 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.
Ron Struthers of Struthers Resource Stock Report, who typically follows gold, recently wrote that a breakout was "imminent" for silver.
"As they say, timing is everything, and I believe the time is soon arriving" for silver, he said.
Technical Analyst Clive Maund said the timing should also be right for Silver X. He recommended his readers stay long on the stock and rated it an Immediate Strong Buy for all timeframes.
"The stock chart for Silver X supports the contention that it will soon take off at a higher level," Maund wrote on April 4. "With the outlook for silver prices now better than it has been for many years . . . the STRONGLY BULLISH CASE FOR SILVER COULD NOT BE CLEARER. The case for buying Silver X here is viewed as ironclad."
Streetwise Ownership Overview*Ownership and Share Structure
According to Reuters, Silver X has 200.36 million shares outstanding and 171.82 million free-float traded shares.
Silver X said management and insiders own approximately 14.24% of the company.
According to Reuters, President and CEO Jose Garcia owns 7.10% of the company, and Vice President Sebastian Wahl owns 7.14%.
The company said institutional investors own 19%.
Some listed by Reuters include Baker Steel Resources Trust Ltd. owns 9.7%, US Global Investors Inc. owns 4%, and Sprott Asset Management LP owns 1%.
Retail investors own the remaining.
Silver X has a market cap of CA$45.78 million and a 52-week trading range of CA$0.16−0.31 per share.
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Important Disclosures:
- Silver X Mining Corp. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
- 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.
- Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
- This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.
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