Silver X Mining Corp. (AGX:TSX.V) has announced its fourth-quarter production results after relaunching mining operations at its Nueva Recuperada project in Peru last fall.
The company said it processed more than 354,000 ounces silver equivalent (Ag Eq) in the quarter ending Dec. 31, 2023, a 193% increase over the previous quarter.
"Our team is doing a great job in taking Recuperada back to positive cashflows," said Chief Executive Officer Jose Garcia. "As a result of the operational reset between July and September last year, we have managed to streamline operations, improve performance, and run the mine at a more competitive cost."
Garcia said "those economic results" will be released in the next few weeks.
"We continue to forge ahead in increasing throughput and to improve head grades by better ore selectivity and more robust mine development," he continued. "I look forward to a successful 2024 year ahead for Silver X."
Garcia said "those economic results" will be released in the next few weeks.
Red Cloud Securities mining analyst Timothy Lee noted in an updated research note on February 2 that the ore processed "was above our estimates."
"Recoveries were approximately in-line YoY, with 89% Ag recovery," wrote Lee, who rates Silver X a Buy with a CA$0.80 per share target price, a 248% increase over Friday's price of CA$0.23 per share. "Production has almost ramped back up to levels seen earlier in the year before operations were shut down to conduct an operational reset."
The company stated that it paused operations between July 26 and September 19, 2023, in order to "implement a strategic operational reset." The company used this time period to upgrade equipment, train its workforce, and implement measures to enhance operational efficiency.
The Catalyst: 'Faster Than We Had Anticipated'
The company said 354,205 ounces Ag Eq were processed at Nueva Recuperada in the fourth quarter with an average head grade of 321 grams per tonne (g/t) Ag Eq.
The ramp-up continues, the company said, alongside infill drilling to take the mine to its highest level of productivity, "having achieved a solid cost reduction in Q4."
"In our opinion, these are positive results, as Silver X has quickly ramped up production to levels from before the mid-2023 shutdown faster than we had anticipated," wrote Lee.
The streamlining of operations at the mine has led to a "solid cost reduction and positive cashflows, which is expected to be reflected in Q4/24 financial results," Lee wrote. The management has guided for further improvement in throughput and head grades by better ore selectivity and more robust mine development. We estimate EPS of (CA)$0.01 in Q4/24."
Red Cloud Securities mining analyst Timothy Lee noted in an updated research note on February 2 that the ore processed "was above our estimates."
Technical Analyst Clive Maund looked at the company in June of 2023 and rated the company as a "Strong Speculative Buy" for potential investors. Maund commented on the company's stock, "Bullish factors to observe are how volume has declined to a relatively low level, which shows the lack of interest characteristic of a bottom, the Accumulation line holding up well overall relative to price, the price well below a still rising 200-day moving average . . . and how the MACD has been creeping higher."
According to the company's investor presentation, Silver X has several catalysts to report, including plans to develop high-grade structures on the Tangana project and development on the Plata Mining Unit, which is expected to finish in 2024 or 2025.
The company also noted it had implemented a shares for debt initiative, entering into an agreement to settle US$2,181,458 of indebtedness owed to an arm’s length creditor through the issuance of 6,000,000 common shares, the equivalent of an issue price of CA$0.499 per share. The indebtedness relates to "design, engineering, and technical consulting services rendered to the Company."
Lee with Red Cloud noted the settlement "helps preserve working capital during this ramp-up."
Bull Market Ahead?
Silver metal opened the year at US$23.08 per ounce and was at US$22.78 Friday afternoon. But some analysts are very bullish on its future this year. Investing Haven predicted a target price of US$34.70 and said the price could go as high as US$48 in mid-2024 or mid-2025.
The most conductive element in nature, silver is used to coat electrical contacts in computers, phones, cars, and appliances. It's also an important element in solar and fuel cell technology.
The World Silver Survey 2023, published by the Silver Institute, said there was a 237.7 Moz deficit between supply and demand for the precious metal in 2022. The institute said this deficit is likely to be repeated in 2023.
According to the Silver Industry Association, the situation is even more dire in Mexico, the world's leading silver producer.
The country has seen an average annual output of 5,600 tons in the last ten years. But its resources have dwindled to as little as 37,000 tons as of 2020, the Institute said.
"If mining continues at the current pace, the country's reserves will be exhausted by the end of 2026," it said.
Streetwise Ownership Overview*Ownership and Share Structure
Silver X said management and insiders own approximately 17% of the company. According to Reuters, President and CEO Jimenez Jose Maria Garcia owns 8.40% of the company, Vice President Sebastian Wahl owns 7.85%, Executive Chairman Luis Zapata owns 0.50%, Director Michael Hoffman owns 0.24%, and CFO Ronald Anibal Marino Sanchez owns 0.06%.
The company said institutional investors own 23%. Some listed by Reuters include Baker Steel Resources Trust Ltd. owns 11.71%s, US Global Investors Inc. owns 4.8%, Earth Resource Investment Group owns 1.05%, and Sprott Asset Management LP owns 1.11%.
According to Reuters, there are 166.58 million shares outstanding with 119.53 million free float traded shares, while the company has a market cap of CA$36.65 million shares. It trades in a 52-week range of CA$0.17 and CA$0.47.
| Want to be the first to know about interesting Silver investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter. | Subscribe |
Important Disclosures:
- Silver X Mining Corp. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Silver X Mining Corp.
- Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
- This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.
For additional disclosures, please click here.
