New Funds Back Peru Silver Deal, Topping CA$928K

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Silver Crown Royalties Inc. (SCRI:CBOE; SLCRF: OTCQX; QS0:FSE) has closed the second tranche of its previously announced non-brokered private placement, issuing 75,310 units at a price of CA$6.50 per unit for gross proceeds of approximately CA$489,515. Each unit consists of one common share and one purchase warrant, with each warrant exercisable to acquire an additional common share at CA$13.00 for a period of three years from the closing date. This second tranche brings the total number of units issued under the offering to 142,848, for cumulative gross proceeds of CA$928,512.

According to the company, proceeds from the second tranche will be used to help fund the second tranche of its royalty acquisition on the Igor 4 silver project in Peru and to cover general and administrative expenses. All securities issued are subject to a statutory hold period of four months plus one day from the issuance date, in compliance with applicable securities legislation. The closing was subject to customary conditions, including approval from Cboe Canada Inc.

Silver Crown Royalties has established itself as a developer of single-element net smelter return (NSR) royalties, emphasizing silver as its only focus. These royalties are designed to secure a fixed percentage of silver production over the life of an operation, registered directly on title, and structured to include minimum delivery obligations and contingent payments tied to operational success. In a company news release, Silver Crown confirmed, "The proceeds will be used to partially fund the second tranche of the company's silver royalty acquisition on the Igor 4 project in Peru."

Structural Deficits and Historic Undervaluation Shape Silver Market Landscape

On March 26, Gold South Africa published an article by Hubert Moolman drawing historical parallels between major Dow peaks and subsequent silver rallies. The author outlined how significant silver uptrends followed previous nominal or Dow/Gold ratio peaks in 1929, 1966, 1973, and 1999. He noted that "after all of these peaks of the Dow there were significant silver rallies that followed," adding that the 1999 peak was followed by a sustained rally beginning in 2001. Moolman suggested that the December 2024 Dow peak could be the latest marker in this recurring pattern, stating, "If this is the Dow peak, then we are in the midst of a major silver rally."

According to a March 30 analysis by Ahead of the Herd, the global silver market remained in a structural deficit for a fourth consecutive year in 2024, with a supply shortfall of 215.3 million ounces. The article noted that this marked the second-largest deficit in over two decades and was largely driven by growing industrial demand — estimated to represent 60% of total silver usage — and a stagnant or declining supply base. A report commissioned by the Silver Institute and cited in the article projected a 42% increase in silver demand across industrial, jewelry, and silverware applications between 2023 and 2033.

Supply, meanwhile, has remained constrained. Mexico, the world's largest silver producer, saw production total 6,300 metric tonnes in 2024, with declines expected in future years due to mining reforms and reduced exploration. According to the article, "Mexico's silver production is now declining double digits annually for the first time in almost a decade," and new project development has failed to keep pace with depletion. Similar patterns were observed in China and Peru, with both countries producing 100 tonnes less silver in 2024 than the previous year. Notably, Peru experienced mine suspensions and social unrest, further reducing output.

In a separate March 30 commentary, Technical Analyst Clive Maund examined long-term price patterns and emphasized that silver was still operating under the weight of overhanging supply, particularly resistance levels dating back to its 2011 high of US$50 per ounce. The report explained, "Silver has struggled to make further progress as it has battled its way through more overhanging supply and is only modestly overbought at this time." Despite the lag in performance compared to gold, the author emphasized that speculative interest in silver remained low, a condition that has historically preceded strong rallies in the sector.

Additionally, the silver-to-gold ratio was cited as a key signal of undervaluation. As of late March, the ratio stood at historically high levels, suggesting to Maund that "the upside for the sector from here is massive – this thing has barely gotten started yet." The analysis also referenced long-term chart patterns, such as a giant Cup and Handle formation and rising Bowl boundaries, as technical factors reinforcing structural support for silver prices.

Silver Crown Catalysts and Forward Outlook

Silver Crown Royalties has steadily built a portfolio of silver-only NSR royalties on producing and development-stage projects, including operations at Gold Mountain's Elk Gold Mine, Pilar Gold's PGDM complex, and BacTech's facility in Ecuador. According to the company's Q1 investor presentation, SCRi reported having four royalties in place, with combined minimum annual silver-equivalent deliveries totaling 22,000 ounces and the potential to reach up to 80,000 ounces per year based on mine plans.

The company's royalty model is structured with staggered payments and incentive-based milestones. For example, the PGDM royalty includes a minimum silver-equivalent delivery of 16,000 ounces per year, with a potential equity bonus of US$1.5 million if deliveries double to 32,000 ounces annually. According to the company's Q1 2025 corporate presentation, the portfolio's aggregate internal rate of return (IRR) was modeled above 18%, with multiple assets achieving IRRs greater than 20%.

Silver Crown has also entered into binding agreements for royalties on the PPX and Tucano projects, which could further increase its annual delivery base. The PPX royalty, once closed, is expected to add a minimum of 56,300 ounces annually. In its investor materials, Silver Crown emphasized a pipeline of over ten additional discussions for future royalties, underscoring management's intention to expand its asset base using the same milestone-driven and capital-efficient structure.

Analyst Sees Strong Upside for Silver Crown Amid Expanding Portfolio and Tight Silver Market

In a research note dated January 21, Couloir Capital analyst Tim Wright assigned a Buy rating to Silver Crown Royalties Inc., setting a target price of CA$32.34. With shares trading at CA$6.70 at the time, Wright's valuation implied a potential return of approximately 470%. He cited Silver Crown's distinction as the only pure-play silver royalty company as a key differentiator and noted a 286% increase in revenue between Q3 2023 and Q4 2024 as evidence of sustained growth.

Wright attributed part of this momentum to several milestones reached in late 2024, including Silver Crown's listings on the OTCQX, Cboe Canada, and Frankfurt Stock Exchange. He also highlighted the addition of Salman Partners to the company's advisory board as a move that could enhance deal flow and investor visibility.

Key portfolio acquisitions played a central role in the valuation. Wright pointed to the CA$4.0 million royalty on BacTech Environmental's Ecuador project, which secured minimum silver deliveries of 35,000 ounces annually for a ten-year period. He also cited the royalty agreement on PPX Mining Corp.'s Igor 4 project in Peru, which covers up to 15% of the silver produced. Based on projected deliveries of 36,063 ounces in 2025, Wright estimated these assets could generate more than US$1 million (approximately CA$1.43 million) in revenue for Silver Crown in that year alone.

While Wright acknowledged risks such as execution challenges, silver price volatility, and the possibility of future equity financing, he underscored the company's relative valuation as compelling. He noted that Silver Crown's Enterprise Value to Equity Raised ratio stood at 1.0, significantly below the peer group average of 5.7, suggesting meaningful upside potential based on current market metrics.

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.