Financing Draws Surprising Interest, Targeting $3M for Silver Expansion

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Silver Crown Royalties Inc. (SCRI:CBOE; SLCRF:OTCQX; QS0:FSE) has revised the terms of its non-brokered offering, initially announced on February 6, 2025, to adjust pricing and structure. The company will now issue up to 461,538 units at CA$6.50 per unit, targeting gross proceeds of CA$3 million. Each unit consists of one common share and one common share purchase warrant, with each warrant exercisable at CA$13.00 for a three-year period from closing.

The proceeds from the offering are earmarked for the second tranche of Silver Crown's silver royalty acquisition on the Igor 4 project in Peru, along with general corporate expenses. The transaction remains subject to regulatory approval from Cboe Canada Inc., and all securities issued under the offering will be subject to a statutory four-month hold period.

Commenting on the financing, Silver Crown CEO Peter Bures noted in the announcement, "As we continue our outreach during the course of the financing, we have received a substantial level of interest at these revised terms. We continue to build the book and expect it to be fully subscribed in a timely manner. The additional funds will allow us to close the second tranche of the PPX royalty transaction and bulk up our balance sheet for additional smaller transactions."

Industrial and Investment Demand Propel Silver Market Amid Supply Constraints

Silver demand remained strong in early 2025, driven by a combination of industrial applications and investment interest. Market trends reflected this increasing demand. FX Empire on January 22 reported that silver prices held above key technical support levels, including US$30.04 and US$30.53 per ounce. Analysts cited uncertainties in industrial demand, particularly from China, as a limiting factor, though silver's role in renewable energy remained a point of interest. The article also noted that potential U.S. policy shifts, including a reconsideration of solar energy funding, could impact silver's trajectory in the renewable sector.

Couloir Capital analyst Tim Wright provided a positive assessment of Silver Crown Royalties Inc. in a January 21 research note, maintaining a Buy rating and setting a CA$32.34 target price. 

Investment outlooks also indicated strong expectations for silver's performance. Kitco News on January 23 cited StoneX Financial's annual metals outlook, which identified silver as a likely top performer among precious and base metals.

The report pointed to a tightening supply-demand balance, stating that "silver, the precious-industrial hybrid, is expected to collect the laurels in 2025 as the market's tightening fundamentals and strong future prospects...continue to capture the imagination, partly on the back of the continued long-term prospects for the solar industry." The analysis projected that silver could average US$32 per ounce for the year, rising to US$33 by year-end.

Technical patterns suggested further potential price movements. Zero Hedge on January 27 discussed a "Cup & Handle" formation in silver's long-term price charts, a pattern historically associated with bullish breakouts. The analysis suggested that silver had yet to test its historical resistance at US$50 per ounce, but if exceeded, could drive prices significantly higher. The report also highlighted concerns over supply shortages, particularly in relation to COMEX's physical silver reserves, noting that "once we have reached a point where the supply runs out, the global exchanges will have to, as some say, ‘beg, borrow, or steal' the silver bars to meet their delivery obligations."

Geopolitical and economic factors continued to shape silver's outlook. Stockhead on February 7 noted that silver stocks on the Australian market had begun to recover after a late-2024 selloff, supported by silver's move past US$32 per ounce. The report also highlighted the impact of trade policy on silver supply, particularly in relation to Mexico, the world's largest silver producer. With discussions surrounding a potential 25% U.S. tariff on Mexican imports, the market anticipated potential disruptions in supply, contributing to price volatility.

Silver's role in decarbonization also remained a focal point. Crux Investor on February 10 emphasized that silver demand was being driven by its application in solar panels, EVs, and semiconductor chips. The report cited data from The Silver Institute indicating that demand for silver in photovoltaics had risen by 158% from 2019 to 2023, with an additional 20% increase expected in 2024. Analysts also pointed to silver's constrained supply, noting that global mine output had remained largely stagnant since 2014, leading to inventory drawdowns and potential price pressure.

Analyst Endorsements Highlight Silver Crown's Growth Potential

Couloir Capital analyst Tim Wright provided a positive assessment of Silver Crown Royalties Inc. in a January 21 research note, maintaining a Buy rating and setting a CA$32.34 target price. He emphasized Silver Crown's position as the only pure-play silver royalty company and noted its rapid revenue growth, stating that the company had experienced a 286% increase in revenue from Q3 2023 to Q4 2024.

According to Wright, Silver Crown benefited from strategic developments, including listings on OTCQX in September 2024, CBOE Canada for warrants, and the Frankfurt exchange in October 2024. The company also strengthened its advisory network with Salman Partners to enhance market visibility and access new royalty opportunities.

Recent acquisitions played a key role in the company's expansion. Wright highlighted the BacTech royalty acquisition, valued at CA$4.0 million, which guaranteed a minimum of 35,000 ounces annually for at least ten years. He also pointed to the royalty agreement with PPX Mining Corp, which provided up to 15% of the Igor 4 project in Peru. Based on current silver prices, Wright estimated that Silver Crown's royalties could generate more than US$1 million (CA$1.43 million) in 2025 from an expected 36,063 ounces of silver.

Despite the positive outlook, Wright identified several risks, including operational risks from royalty vendors, commodity price fluctuations, broader market risks, and potential shareholder dilution if non-dilutive funding options are unavailable. However, he underscored Silver Crown's valuation potential, noting that the company's Enterprise Value/Equity Raised ratio stood at 1.0, significantly below the peer group average of 5.7, indicating a substantial upside.

At the time of the report, Silver Crown's share price was CA$6.70, with Wright projecting a potential return of 470% to his CA$32.34 target price.

According to a recent report from The Gold Advisor, the silver market remained in a supply deficit for the fifth consecutive year in 2025, despite a projected 3% increase in global supply. The report emphasized that industrial demand continued to drive silver consumption, particularly in solar, automotive, and consumer electronics applications. It noted that "silver industrial fabrication is expected to grow by 3%, surpassing 700 million ounces for the first time," underscoring the metal's critical role in the green economy. The analysis also highlighted ongoing investor interest in silver as a portfolio hedge against economic uncertainty, with geopolitical factors and inflation concerns contributing to sustained demand.

Growth Through Silver Royalties: Silver Crown Expands Portfolio and Production Exposure

Silver Crown's updated financing aligns with its strategy to expand its portfolio of silver-focused royalties. According to the company's latest investor presentation, the royalty acquisition on the Igor 4 project represents a step toward increasing its exposure to silver production, complementing its existing interests in Peru and other jurisdictions.

The company has positioned itself as a key player in securing silver-focused net smelter return (NSR) royalties. Its strategy involves structuring agreements with operators to generate long-term cash flow through silver byproduct streams while maintaining minimal economic impact on mine operators. Silver Crown's portfolio has grown to include producing royalties, with contractual minimum silver deliveries and contingent payments tied to operational success.

In 2023 and 2024, the company raised over CA$5 million in financing and deployed CA$3.7 million into royalty acquisitions. It currently holds four royalties and has secured agreements that could significantly increase annualized silver deliveries. Management has outlined expectations for further revenue growth, noting that recent transactions have more than doubled the company's revenue run rate.

With this latest offering, Silver Crown aims to complete its second tranche of the PPX royalty acquisition while maintaining liquidity for future opportunities. The company continues to evaluate additional acquisitions as part of its broader expansion strategy in the silver royalty sector.

Ownership and Share Structure

Insiders and management hold a total of 21% of the company, institutions own 16%, and private corporations have 6%, noted Wright with Couloir.

"Insider ownership by management aligns management's interests with those of shareholders, which is a desirable attribute," he added.

As for share structure, Silver Crown has 2.49M outstanding shares and 2.1M free float traded shares. Its market cap is US$10.6 million. Its 52-week trading range is CA$6.50–9.85 per share.