Silver Viper Minerals is a company with assets in Sonora Mexico, often referred to as the mining state of Mexico. Silver Viper Minerals is a pure exploration drill play, which managed to diminish some risks and where I see good potential.
History
Silver Viper owns the La Virgina project, which they purchased from Pan American Silver which retains a 2% NSR. PAAS became the owner of this project after they acquired Minefinders in 2012. At the time of the takeover, Minefinders was in the process of developing this project, which saw some interesting drill results up until then:
23.5m of 13.69g/t AuEq
67m of 6.56g/t AuEq (!)
15m of 6.14g/t AuEq
29m of 3.69g/t AuEq
Thick mineralization with high grades of both gold and silver
The La Virginia project is situated in the Mexican ‘Sierra Madre gold-silver belt’. As you can see in the image, this belt has a virgin zone between the El Tigre and Dolores mine. La Virginia sits right in the middle. Dolores is one of Mexico’s biggest silver deposits and used to be owned by Minefinders. They discovered the La Virginia project, whilst looking for Dolores type mineralisation. La Virginia has the same northwest trending veins and structures similar to the Dolores mine.
Inside the news release of the Minefinders takeover, I found this interesting tidbit from their CEO at the time, Geoff Burns:
“Burns noted that Dolores, which has been in production for three years, is no longer a risk and that Minefinders also owns the promising La Victoria project…”
Of note is that the news release of the 67m intercept (highlighted above), set off a run of almost 50% to the shareprice of Minefinders. At the time, already hovering aroung the C$1B(illion) market cap.
Management
Silver Viper is a Belcarra Group company, which is why we’re seeing both Gary and Steve Cope on the board. The Belcarra Group has experience in developing projects into saleable assets. Their most known success is Orko Silver. During the course of 2012 this project saw interest from three majors (First Majestic, Pan American and Coeur) and eventually got sold to Coeur Mining for C$382M.
Management owns a total of 39% of outstanding shares of Silver Viper and continued to buy shares in the open market since IPO. Notable is that Gary Cope bought over 200,000shares in the market last year, while not pulling a salary. Which brings me to my next point.
During the two years following their IPO, Silver Viper’s management has been pretty ‘frugal’ with their funds: They came to the market with C$5M and were able to show quite some results for this money: Drill program that yielded a new discovery, soil sampling program over a vast surface and preparations for a maiden resource. The La Virginia claims have been renegotiated which makes the upcoming payments more spread out and don’t weigh too much on their cash balance. The pressure is off so to speak. Final payment in 2023.
Besides the 39% of shares that are being held by management, VIPR is already seeing a fair share of fund positioning. This leaves Joe Sixpack fighting for a leftover 23% of outstanding shares. Which is why limit orders and patience are required here. There’s very little liquidity. This might change with the closing of the upsized private placement but we don’t know yet who bought what.
Rubi
Though the La Virginia project has a size of 37,700ha and has multiple drilled and untested zones, I’m impressed by their latest Rubi-discovery. This is a zone that has originally been mapped by the surface program. The results of this program determined a target in which they drilled 5 holes on a with 50metres spacings. All 5 of these drilled multiple intervals of mineralization. Best result: 13m of 3.13g/t gold and 228g/t silver, or 6.42g/t gold equivalent.
These kind of results either mean they have a very good geological team, or they just drilled an unmissable target. Both is possible as well...
interestingly, this soil sampling program has been extended and lit up some additional targets in the area. One of this has even better values than Rubi and is situated one kilometre to the East. Both of these zones will see drill holes in it when they restart drilling. This drill program should be announced very soon, as they just closed the private placement.
On the map below we see additional targets with elevated soil values: ‘Northern Anomaly’ and ‘Anomalies for follow up’. Closer to Rubi, we’re seeing ‘Macho Libre’ that hasn’t seen any drill holes either, but is showing soil values of up to 3.6g/t gold.
Conclusion
I have a position in Silver Viper which I’ve expanded in recent weeks and which I’ll be holding for quite some time. Just as with GoGold which I wrote about recently, I felt the urgency to expand my position. On the one hand you have silver that looks like it wants to break out and take all silver names with it. On the other hand, here you have some solid fundamentals which could help its share price regardless of what silver does.
This is no risk free investment as it’s a speculative drill story. The property looks rich but they need to hit with the drill bit. Chances are good that they can expand the Rubi Zone. Hitting good mineralization at Rubi East would set this on fire but this is exploration so it’s not a safe bet.
In short:
- Interesting project with some very good drill results and growth potential
- New discovery under Silver Viper management
- Lots of targets that can lead to new discoveries
- Experienced management with a lot of skin in the game
- Interest from funds and connections with Majors
- Catalysts:
- Drill program with a good shot at a new discovery
- Growing awareness through expositions and marketing (RedCloud) in coming months
- Maiden Resource
