Silver Co. Has Strong Q4 Production Results
Research Report

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Disclosures for Atrium Research,  Santacruz Silver Mining Ltd., January 30, 2025

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In a January 30, 2025 research note, Atrium Research analysts Ben Pirie and Nicholas Cortellucci maintained a Buy rating on Santacruz Silver Mining Ltd. (SCZ:TSX.V; SZSMF:OTCQX; 1SZ:FSE) with a CA$0.90 target price, following Q4 2024 production results that exceeded estimates with 4.71 million silver equivalent ounces produced. The report was titled "Santacruz Silver — Strong Q4 Production Results; Big Year Ahead in 2025."

Total Q4 production surpassed Q3's 4.64 million ounces and estimates of 4.50 million ounces. The Zimapán Mine notably beat estimates by approximately 10%, producing 1.1 million silver equivalent ounces. The Bolivian operations increased processed tonnes to offset slightly lower silver head grades.

Quarterly production highlights included: The Bolivar mine processed 69.4Kt of ore, producing 1.033 million silver equivalent ounces; Porco processed 53.7Kt producing 496,700 silver equivalent ounces; Caballo Blanco Group processed 60.8Kt producing 913,200 silver equivalent ounces; and San Lucas processed 92.4Kt, down 4% quarter-over-quarter due to increased capacity utilization by the operating mines.

The company's recent debt renegotiation with Glencore has significantly improved its financial position, with net debt decreasing from US$176 million in Q4 2023 to US$46 million in Q3 2024, representing 0.6x Net Debt/OCF. The analyst notes "SCZ has a 1.4x beta to the silver price, making it an ideal investment for those looking to take advantage of a rising silver price."

The CA$0.90 target price is based on a 4.0x multiple of 2025 estimated operating cash flow, assuming US$28/oz silver, equivalent to a 0.7x NAV multiple on an estimated US$358 million NAV using a 5% discount rate.

The share price at the time of the report of CA$0.35 represents a potential return of 157% to Atrium's CA$0.90 target price.