Silver X announced that its Board of Directors have approved the debt settlement of ~US$4.2M with Baker Steel Resources Trust Ltd. (LSE:BSRT, Not Rated). Upon closing of the transaction, Baker Steel will own ~19.5M shares, or 13.89% of Silver X’s issued and outstanding shares. Overall, this deal will improve Silver X’s balance sheet by clearing the company’s debt, and it further adds to Baker Steel’s shareholdings, making them a strategic institutional shareholder. While we consider this to be a positive move for AGX, given that the deal is dilutive with the issuance of additional shares, we lower our target to C$0.85/sh (was C$1.00/sh).
Tag: Silver X Mining Corp.
Silver X has completed the Nueva Recuperada Ag + polymetallic plant upgrade in Peru from 600tpd to 720tpd. While the completion took longer than we had originally anticipated, the company conducted a more thorough upgrade than planned, now positioning it to ramp up to full production. As a result of the longer down time required for plant upgrades, production in H1/22 is expected to be lower than we had initially modeled. However, we view this announcement positively as we believe the upgrade marks an important milestone for the company.
Silver X reported drilling results from 14 holes completed at the Tangana mining unit, part of its 100%-owned Nueva Recuperada Ag-Zn-Pb project located in Peru (Figure 1). The results are part of an ongoing 25,000m drill program at Nueva Recuperada with the objective of upgrading and expanding the current 68.3M oz AgEq inferred resource base. We view these results positively as all 14 holes have encountered the mineralized structure, with 9 returning economic levels of mineralization (>80 g/t AgEq), boding well for future resource estimates. Importantly, the results reported are close to current mine workings, thus they are in areas that could be brought into the production plan fairly quickly.
Last Friday, Red Cloud hosted the third and final day of its Very Pre-PDAC Mining Showcase, which featured 39 presenting companies including a keynote speech by Joe Mazumdar, Editor/Analyst and Publisher of Exploration Insights and had over 1,750 participants registered in advance of the event. With this note, we want to provide a quick recap of the highlights from the conference for those who were unable to attend the live event. Replays are available on the Red Cloud website.
We are seeing precious metals rise in the shadow of the Ukraine invasion. Gold is trading around US$1923.80/oz, down a couple percent on short term profit taking since reaching a high of US$1,975/oz overnight. Kitco News notes that the next resistance levels could be between US$2,022/oz and US$2,089/oz. Some such as Frank Holmes of US Global Investors is suggesting that 20% volatility in gold is a non-event, and that gold could go to US$2,800/oz. Other commodities are also moving.
We are initiating coverage on Silver X Mining with a BUY rating and C$1.00/share target price. Silver X is an emerging silver producer focused on Peru. We believe that Silver X is one of the best positioned emerging junior silver producers in the market, with tremendous growth potential at its Nueva Recuperada mining operation.