Silver Exploration Advancements Highlight Growth Potential

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AbraSilver Resource Corp. (ABRA:TSX.V; ABBRF:OTCQX) has filed an updated Pre-Feasibility Study (PFS) for its wholly-owned Diablillos project in Salta Province, Argentina, under National Instrument 43-101 standards. The report, titled Updated NI 43-101 Technical Report, Pre-Feasibility Study for the Diablillos Ag-Au Project, is dated January 13 and aligns with previously disclosed results from December 3, 2024.

The study highlights robust project economics, including a net present value (NPV) of US$747 million at a 5% discount rate and an internal rate of return (IRR) of 28%, supported by a two-year payback period. These figures are based on conservative pricing assumptions of US$25.50 per ounce of silver and US$2,050 per ounce of gold. Additionally, the project boasts an average all-in-sustaining cost (AISC) of US$12.67 per silver-equivalent ounce over its 14-year mine life, with peak production reaching 20.8 million silver-equivalent ounces in the second year of operation.

AbraSilver has identified significant mineral reserves and resources at Diablillos, with Proven and Probable Reserves of 42.3 million tonnes grading 91 grams per tonne (g/t) silver and 0.81 g/t gold, totaling 123 million ounces of silver and 1.1 million ounces of gold. Measured and Indicated Resources include 53.3 million tonnes grading 87 g/t silver and 0.79 g/t gold.

The Diablillos project benefits from established infrastructure, including nearby all-weather roads, water resources with secured easements, and access to a natural gas pipeline. AbraSilver has also secured eligibility for Argentina's RIGI incentive program, which offers reduced corporate tax rates, elimination of export duties, and accelerated depreciation, contributing an estimated US$430 million in savings over the project's lifespan.

Silver Market Trends: Balancing Supply and Demand

Shad Marquitz of Excelsior Prosperity commented on December 14, that the ongoing transition to an electrified economy, coupled with increasing adoption of green technologies, positions silver as a highly investable commodity. He noted, "The transition to an electrified economy doesn't happen without copper and silver," highlighting their integral roles in renewable energy infrastructure and electronics. Marquitz also pointed out that silver's increasing utilization of critical technologies adds to its long-term investment appeal.

According to Midas Touch Consulting, on December 16, silver prices rose by an impressive 31.75% in US terms over the year, surpassing gold's gain of 30.9%. The analysis highlighted silver's role as a "safe haven" asset amid volatile economic conditions, further underpinned by industrial applications in green technologies and electronics. "Silver has been consolidating in a narrow range around and above USD 30 for nearly eight months," the report noted, describing this as a sign of price equilibrium. It also identified a bullish wedge pattern in the technical charts, indicating limited downside risks and potential for significant gains in 2025.

Christopher Ecclestone of Hallgarten & Company maintained a target price of CA$4.20 for AbraSilver, reflecting confidence in the company's ability to deliver shareholder value through strategic resource expansion and project optimization.

Bob Moriarty of 321 Gold highlighted on December 19 that the silver market benefits from its dual role as a monetary and industrial metal.

He stated, "Silver offers investors protection during times of economic and political uncertainty."

Moriarty also noted that silver's price stability during the latter months of 2024 set the stage for further price increases, with expectations that silver could surpass its all-time high of $50.75. He emphasized the seasonal strength of the silver market from mid-December to February, aligning with past trends.

Adrian Ash, director of research at BullionVault, noted in a January 15 report from Ahead of the Herd, "Investors are optimistic about gold and silver for 2025 because they are so pessimistic on geopolitics and government debt," as reported by CNBC on January 8, 2025.

Bank of America highlighted copper's potential, projecting prices exceeding US$10,000 per tonne, while ING anticipated record-setting gold prices due to central bank monetary easing and escalating trade tensions. Central banks maintained their role as substantial buyers of gold in 2024, bolstering demand amid global economic instability, a trend expected to persist into 2025. This environment underscores the ongoing appeal of precious metals as a safe haven and an essential component of investor portfolios.

Third-Party Insights Highlight AbraSilver's Strong Potential and Growth Opportunities

The Daily Gold Premium, in its January 5 analysis, emphasized the significance of AbraSilver's Diablillos project in Salta, Argentina. The project boasts measured and indicated resources of 260 million ounces of silver equivalent at an impressive grade of 151 g/t.

The publication also highlighted the transformative impact of the JAC Zone discovery, which added 36 million ounces of silver at 212 g/t, referring to it as a "game changer." Furthermore, the November 2024 pre-feasibility study projected a net present value (NPV) of US$1.29 billion and an internal rate of return (IRR) of 39.3%, based on silver prices of US$30.70 and gold prices of US$2,650. The study suggested that ongoing exploration efforts, particularly around nearby high-grade satellite deposits such as JAC North, could further boost the project's NPV.

In a January 2025 report, Christopher Ecclestone of Hallgarten & Company echoed a positive outlook for AbraSilver, citing its robust performance in 2024 and substantial resource base. He highlighted the Diablillos project's ability to produce 13.4 million ounces of silver equivalent annually at an all-in-sustaining cost of US$12.67 per ounce, with projected annual cash flows of US$300 million over the first five years.

Ecclestone also underscored the scalability of the project, referencing ongoing drilling programs aimed at extending resource life and increasing production capacity. He maintained a target price of CA$4.20 for AbraSilver, reflecting confidence in the company's ability to deliver shareholder value through strategic resource expansion and project optimization.

Critical Milestones and Progress Highlights For AbraSilver

AbraSilver's ongoing and future initiatives position the Diablillos project as a premier silver-gold asset in Latin America, as outlined in their January 2025 Investor Presentation. The company's exploration efforts have consistently delivered results, doubling Measured and Indicated resources since 2020 at a discovery cost of US$0.11 per silver-equivalent ounce. The current Phase IV drilling campaign focuses on expanding high-grade zones and testing new targets, including the promising JAC and Oculto zones.

Key near-term catalysts include securing final permits, advancing the feasibility study, and making a construction decision by late 2026. The company is also evaluating opportunities to connect the project to the national power grid, which could lower capital and operating costs further. Additionally, the exploration of a porphyry system within the Diablillos property has the potential to unlock district-scale mineralization, underscoring the project's long-term growth potential.

Ownership and Share Structure

According to Refinitiv, the top six strategic entities own 21% of AbraSilver. The top 3 shareholders are: Eric Sprott with 9.9%, Kinross Gold with 4.0% and Central Puerto with 4.0%.   Additionally, the top 3 insiders are Chief Executive Officer (CEO) John Miniotis with 1.0% or 1.41M shares, Director Hernan Zaballa with 0.83% or 1.08M shares, and Chairman and Director Robert Bruggeman with 0.86% or 1.11M shares.  

Nine institutions hold 6.84% or 8.58M shares. The Top 3 are Mirae Asset Global Investments (USA) LLC with 2.1% or 2.63M shares, ETF Managers Group LLC with 1.74% or 2.18M shares, and Sprott Asset Management LP with 1.2% or 1.51M shares. 

The company has 129.51M outstanding shares. Its market cap is CA$318M. Its 52-week high and low are CA$3.18 and CA$1.30 per share, respectively.