CEO Discusses Resource Potential at Metals Project

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Silver47 Exploration Corp. (AGA:TSX.V) aims to at least double, and potentially triple, the current Inferred mineral resource at its Red Mountain polymetallic project in Alaska, Chief Executive Officer Gary Thompson said in a Jan. 13 interview.

"My goal is to get a couple of aggressive drill seasons on this project and then get it into preliminary economic assessments to get it closer to a mine development scenario," Thompson told Andy Millette with Natural Resource Stocks.

Red Mountain's current resource is 15,600,000 tons (15.6 Mt) of 336 grams per ton silver equivalent (336 g/t Ag eq) containing 168,600,000 ounces (168.6 Moz) of silver equivalent. This equals about 2 Moz of gold equivalent (Au eq)

Tripling the resource would take it to 500 Moz of Ag eq (or 5–6 Moz of Au eq or 3-plus Mt of zinc equivalent).

The Red Mountain deposit is both volcanogenic massive sulfide (VMS) and sedimentary exhalative (SEDEX). Its current resource is comprised of 500,000 tons of zinc, 36 Moz of silver and 214,000 ounces of gold along with copper and lead.

"That's about US$325−350 rock," said Thompson. "Anyone can do the math, 170 million [ounces] times 30 bucks an ounce, and it'll give you a sense of the in situ metal there."

Right now, the resource looks as though it could be mined both underground and via open pit, noted the CEO. He cited underground mining costs at about US$100 a ton, and open pit mining costs between US$20 and US$30 a ton.

"We haven't defined the outer limits of this resource, which is an exciting part," he added. "So it's still wide open."

Though Red Mountain has had US$30 million-plus worth of exploration work done there in the past, mostly by previous operators, Silver47 first drilled at the project last year. During that program, it encountered some of the highest-grade intervals at the property reported to date, Thompson said. For example, the company hit a 2.5 meter (2.5m) zone of massive sulfide containing 15 g/t gold, 250 g/t silver, and 20%- -zinc, plsu copper and lead.

"The fact that we've got these multiple metals, it's quite high grade, it's very attractive," the geologist commented. "Those kinds of grades can generate really good revenues when you look at other operations that are similar."

Red Mountain encompasses a "60 kilometer (60 km) trend of favorable geology" and is strategically located about 100 km south of Fairbanks, en route to Anchorage, in the pro-mining jurisdiction of Alaska. Local infrastructure includes a winter access trail, railway and power not far away, but Silver47 intends to do some roadwork and build a new camp there. To help fund a portion of the work, Thompson said, the company could tap the Alaska Industrial Development and Export Authority, or AIDEA, which provides term debt funding for infrastructure.

This year Silver47 primarily will focus on advancing Red Mountain, though it owns two other assets: Adams Plateau and Michelle.

"That could provide some substantial value to us if either one of those projects would farm out or sell," Thompson said.

He described the Adams Plateau, spanning 150 square kilometers (150 sq km) in British Columbia, as similar to Red Mountain in terms of geological environment, deposit types, and hosted metals. It is an earlier stage, but extensive exploration work was done there historically.

Michelle spans 158 sq km in the Yukon. In 2021, Silver47 acquired Michelle, where, during the first drill season, it "made a substantial silver discovery," 15m of 900 g/t silver plus 30% lead-zinc. Because permitting for the project is in judicial review, progress there is delayed.

The Catalysts

Silver47 is gearing up for another drill season at Red Mountain, likely to commence in May-June, noted Thompson. Getting new holes in the ground will be a big catalyst.

Management is working to get the company listed in the U.S., likely on the OTCQB, and this could happen next month. The team is trying to determine how to add meaningful resource to the already material resource and good grade and will announce its conclusions, when ready.

"If we can demonstrate this high growth potential to not only increase the grade but [also] grow the resource, I think that will be something meaningful to the market," the CEO said.

Finally, management continues to consider other possible ways of growing the company, whether through mergers and acquisitions activity or other types of deals.

Silver in a Bull Market

"The odds are high that silver will experience strong bullish momentum in 2025 and beyond," Investing Haven wrote in late December 2024. The firm predicted that the silver price will touch US$49/oz this year. For Further out, it is forecasted to consolidate in 2026 at around US$50/oz, climb toward US$77 in 2027, and peak at US$82 in 2030.

Current factors that support the favorable outlook include the metal's "critical role in the energy transition, its constrained supply picture, and its monetary properties as a hard asset," Austin Meadows wrote in a Jan. 10 Crux Investor article.

"For investors, silver's compelling supply-demand story and strong price momentum may offer an attractive opportunity for diversification and growth," added Meadows. "Silver mining stocks provide operational leverage to rising silver prices for investors seeking higher returns."

As for mining's junior resource market, comprised of metals explorers, it has been challenging in Canada for the past few years, Thompson said, but signs indicate this is reversing, and money is coming back into the space.

VSA Capital analysts are optimistic about silver in the near term. "We believe the outlook for silver remains strong, with industrial demand continuing to grow whilst the impact of higher gold prices on jewelry consumption is likely to benefit silver jewelry demand in 2025," they wrote in a Jan. 10 report.

According to Meadows, decarbonization and the related need for silver in solar panels, electric vehicles, energy storage systems, for example, is driving industrial demand for the metal, as is its resilience as a store of value. About half of the silver used today goes toward industrial applications, Peter Krauth, editor of Silver Stock Investor, said in a December 2024 interview.

Investment in silver as a safe haven, Red Cloud Securities analysts wrote in a Jan. 7 report, has decreased in recent years. As evidence, they pointed to the nearly doubling of the silver:gold price ratio to 90:1 from 50:1 since about 2010. The ratio also suggests that silver is undervalued relative to gold, based on historical averages, Meadows pointed out.

The surging demand for silver has outpaced supply and this has led to inventory drawdowns. According to Ahead of the Herd's Richard Mills, the final silver supply total for 2024 should reflect a deficit of another 1%, or 215,300,000 ounces, "the second-largest in more than 20 years." This would make 2024 the fourth consecutive year the silver market was in a structural shortage. In 2025, mining output is expected to remain constrained, Julian Wee, UBS financial markets strategist, told Kitco News.

The silver price now is US$31.02 per ounce (US$31.02/oz), and experts expect it to move up further this year. With a target for the silver price in 2025 of US$36–38/oz in 2025, Wee recommended investors "stay long the metal or use it for yield pick-up opportunities." A spillover effect of gold continuing to rise could push the silver price higher, the strategist said. Stronger industrial demand should boost it, too, particularly if China lowers interest rates, and the change sparks a recovery in global manufacturing.

Krauth predicted US$35/oz silver this quarter, US$40/oz shortly afterward, and then US$50/oz maybe this year but probably in 2026.

"When it surpasses US$50, all bets are off after that, where it's going to go," he said. "Triple-digit silver, I think, is in the cards, and honestly, my ultimate price target is US$300."

Trading at a Discount

Silver47's share price at CA$0.80 in November 2024 was "incredibly cheap," Bob Moriarty of 321gold wrote in an article then. "At current prices, Silver47's valuation represents a fraction of comparable silver projects, offering investors exposure to silver at roughly one-tenth of the cost of peer companies."

He highlighted the size of Red Mountain's current resource, and the project's existing infrastructure and location on state-managed land.

Today, the stock is even lower, at about CA$0.62 per share.

Ownership and Share Structure

Silver47 has only been trading publicly for about two months despite being founded in 2021, noted Thompson. 

The company said its three largest shareholders are Eric Sprott, Crescat Capital, and management.

According to Refinitiv, about 10% of Silver47 is held by strategic investor Silver Range Resources Ltd., and Chief Executive Officer Gary Thompson owns about 21%.

The company's market cap is CA$21.64M. Its 52-week high and low share prices are CA$0.84 and CA$0.465, respectively.