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The following is a transcript of Silver X Mining Corp. AMA session on August 22, 2024
CEO.CA would like to welcome David Gleit, CFO of Silver X Mining Corp. to today’s Ask Me Anything session. David, can we start with a quick overview of the company?
Silver X Mining is a rapidly expanding silver developer and producer whose mission is to become a premier silver company. We intend to do this through the consolidation and development of undervalued assets while upholding social and environmental excellence. The Company owns the 20,000-hectare Nueva Recuperada Silver District in Central Peru and produces silver, gold, lead, and zinc from our Recuperada Mill. Current production from our Tangana mine project, paired with immediate development and brownfield expansion opportunities, presents investors with the opportunity to invest in the early stages of a silver producer with significant growth potential.
What geological features of Peru and the Huachocolpa district make it a prime location for silver mining?
Peru is one of the most mineral-rich countries in the world, renowned for its abundant deposits of silver, gold and copper. It is actually one of the world’s largest producers of silver and gold, and the second largest producer of copper, making it one of the best jurisdictions for mining. The Huachocolpa district, in particular, is a highly prospective polymetallic system, characterized by hundreds of mineralized veins. Currently, we are only mining two of these veins at our Tangana mine, but with over 200 identified, the district holds immense growth potential. This area is poised for long-term development, with the potential to be mined for decades, offering significant opportunities for expansion.
How do you view the current trends and outlook of the silver market?
We are bullish on silver and expect price predictions to increase as we move through 2024 and into 2025. Factors like the expected reduction of the U.S. Federal Reserve’s benchmark interest rate and uncertain economic conditions should keep silver prices high. Additionally, growing industrial demand for silver from the transition to green energy, coupled with supply deficits bolsters our confidence that we could see price appreciation for silver. As the Silver Institute highlights, “Stronger industrial offtake is a principal catalyst for the rising global demand for the white metal, and the sector should hit a new annual high this year.” With Silver X’s operations in a prime mining district and the market’s current trajectory, we are poised to capitalize on the upside for silver demand and price appreciation.
Based on recent Q2 production results, how do you plan to sustain the increased tonnage mined while optimizing grade to the mill? Can you provide more details on your strategy, challenges and operational improvements?
Growing production for a small company is always challenging and we’ve done a tremendous job in building a mine with very modest investments. This speaks highly of the quality of our assets and team. Our efforts will focus on optimizing head grade to advance mine development by having multiple headings and improving ore selectivity. Solid underground development has also enabled new phases for both resource expansion and production growth. Additionally, we have increased emphasis on internal operating efficiencies which will contribute to sustaining our increased tonnage targets.
Can you talk about the new Plata development area and how it fits into your growth strategy?
The new Plata project is large with significant areas identified for exploitation and development. Tangana is fully in commercial production and boasts a large resource, while Plata is a new resource that we will publish later this year. We are particularly excited about Plata as it is expected to add increased tonnage with excellent grades. Our initial assessments indicate that Plata is a high-grade silver target, and we are looking forward to finalizing details with our independent QPs to refine the data and present it to the world.
What effect on production can have the Plata and Red Mining units have on AGX? Can the higher-grade ore be transported to Tangana? With the 720 ton/mill and the higher-grade ore production, there could be a significant higher production without much capex?
Plata is expected to have a higher-grade resource than Tangana. As a historical mine, it may facilitate early production, potentially increasing our metal throughput within the next year. Once both mines are operational, the company plans to expand the plant for a modest capacity increase while still focusing on high-grading activities at both sites. Red Mining is a high-grade target still in the early stages of exploration.
Is there planned one big mill or three mills for each unit?
With the upcoming EIS approval for 1,500 TPD at Tangana, we may opt to build a new mill closer to the Tangana mine, in addition to the existing Recuperada mill. Alternatively, the company is considering increasing capacity at the current plant and high-grading ore at both Tangana and Plata using resorting techniques. This possibility is under evaluation and could be announced in the coming months.
Are there any upcoming near-term catalysts that investors should watch for?
Indeed there are. We are a company in production with unparalleled exploration and growth potential. In the near term, you will see quarterly reports and financials that will showcase our increasing production and cash flow. Additionally, a resource update later this year will demonstrate that we’re tapping into a vast network of undervalued assets within one of the most prolific silver districts in Latin America.
What sets Silver X apart from its peers in the silver mining industry? Are there any unique aspects of your approach?
The combination of being a silver producer with a large and high-quality resource is a unique position to be in. If you look at the typical Lassonde curve, when it comes to derisking of an asset and company, Silver X is in a very good position. Our approach is unique in that we are not just focused on production but also on continuously delivering and developing new resources, ensuring long-term growth. Additionally, our experienced team and proven track record give us a competitive edge in maximizing the value of our assets.
What are some benefits of the recently announced 15-year social agreement with the Community of Carhuapata?
We signed an agreement with the community of Carhuapata which is a community within the area of the Plata mining unit. This demonstrates the outstanding relationship with our community and that they fully support the value proposition of Silver X. We also have an extended social agreement with the Huachocolpa community which further speaks to our commitment to sustainable development. It’s very rare to find companies today that can sign two different agreements with two different communities for 12- and 15-year terms respectively.
What are key milestones Silver X aims to achieve in the next 12-18 months? How do you plan to deliver value to investors?
We are working to create value for our investors by increasing our cash flow and increasing our resource. Obviously, cash flow is important to derisk the company and project. This shows shareholders that we know how to run a mine. Increasing the resource is the real value-add to the project. The combination of the two, over time should make an outstanding impact on the company when it comes to share price. We are looking forward to publishing a new resource later this year and further improving our operating efficiencies.
When are you expected to build the second mill and expand production, and how are you going to finance it?
As I’ve been explaining, the growing resource that we are consolidating will require expanding our throughput. As we are looking at alternatives, it’s too soon to commit timing and means of financing. What we can say is that we have several options that we are analyzing, making this an interesting time to invest.
Thanks so much David! Any closing remarks for our investors?
Thank you for joining me today and for your insightful questions. As we advance our production capabilities and development projects, we’re excited about the significant growth opportunities ahead and look forward to sharing our progress with you. Please don’t hesitate to reach out to us at ir@silvermining.com if you have any further questions. We are happy to stay in touch!
