The Q3/22 financial results of Silver X Mining Corp. (AGX:TSX.V) were notable for record revenue and production and revenue from its flagship Nueva Recuperada project in Peru, and the company's first-ever net gain reported Red Cloud Securities mining analyst Timothy Lee in a Nov. 29 research note.
"Overall, these are positive results as they demonstrate continued quarterly production growth with higher grades and lower costs," Lee wrote and presented the data highlights.
Milestones Reached
In Q3/22, the analyst pointed out Silver X generated its best revenue ever of US$5.5 million (US$5.5M). This was a 73% rise quarter over quarter and a 91% increase year over year.
This resulted from increased production as the ramp-up at Nueva Recuperada continued. The company produced about 371,000 ounces of silver equivalent (371 Koz of Ag eq) in Q3/22 versus roughly 139.4 Koz Ag eq in Q3/21.
Other contributing factors were the processing of more material and of material with greater head grades.
Lowered costs also played a role; general and administrative expenses and corporate activities both were lower during Q3/22.
Red Cloud has a Buy rating and a CA$0.95 per share target price on Silver X, the stock of which is currently trading at about CA$0.45 per share.
Earnings per share were -US$0.01, missing Red Cloud's US$0.01 estimate. Foreign exchange losses of US$1.1M, specifically appreciation of the Peruvian sol and Canadian dollar against the U.S. dollar, accounted for most of this. However, Lee noted Silver X reported its first-ever net gain during Q3/22: US$0.2M.
Also worth a mention, according to Lee, during Q3/22, Silver X generated CA$3M gross from a private placement.
"We urge investors to remain focused on Silver X's ramp-up to full production as opposed to bottom line earnings at this stage," wrote Lee.
Looking Ahead
Along with the ramp-up, upcoming catalysts for the Canadian silver producer include ongoing exploration of the Tangana vein at Nueva Recuperada, for instance, and expansion of mill capacity to 2,000 tons per day from the current 720 tons per day by 2024.
"Ramp-up to full production along with positive results from exploration activities underway at Nueva Recuperada could lead to a warranted rerating of the stock," Lee wrote.
Red Cloud has a Buy rating and a CA$0.95 per share target price on Silver X, the stock of which is currently trading at about CA$0.45 per share.
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Disclosures:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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