Silver X Mining Corp. (AGX:TSX.V) announced it continued to increase production during the second quarter of 2024 at its Nueva Recuperada mine in Peru.
The company said there was a growth in tonnage of 20% from Q1 2024 and 33% from Q2 2023.
The production of silver equivalent (Ag Eq) ounces increased by 8%, Silver X said, as the company processed 362,800 ounces Ag Eq in Q2 2024.
"We are reporting our third consecutive quarter of increased tonnage mined and mill throughput and expect to continue this trend throughout the rest of the year whilst also concentrating on optimizing grade to the mill," said Chief Executive Officer Jose M. Garcia. "We plan to announce financial results for the second quarter, which benefited from stronger metal prices, within approximately 45 days."
Analyst Timothy Lee at Red Cloud Securities, in an updated research note on Thursday, said that the "overall production is about in-line with our estimates."
The company also reported "solid underground development, enabling new development phases for both production and resource development" at the project.
Analyst Timothy Lee at Red Cloud Securities, in an updated research note on Thursday, said that the "overall production is about in-line with our estimates."
"Tonnage processed exceeded our estimate, but the lower grade led to Ag Eq production that was 6.7% below our estimate," wrote Lee, who rates the stock a Buy with a target price of CA$0.70 per share. "Overall, while there is some variability in metal grades, we believe the continued production ramp-up is the key for Silver X at this stage."
Company Meets Operational Targets
The results released this week show that Silver X mined 42,866 tonnes in the second quarter, an increase of nearly 34% year-over-year (YoY); and processed 44,601 tonnes, an increase of 26% YoY.
The average head grade was 253 grams per tonne (g/t) Ag Eq, about 6% down YoY, the company reported.
The property produced a total of 284,027 Ag Eq, up 14% YoY, the company said.
"Recoveries were approximately in line with previous quarters for Zn (zinc), Pb (lead), and Au (gold), while the 88.72% Ag recovery is relatively high," wrote Lee while maintaining his rating. "The company stated that it met its operational targets for the quarter, and underground development work continues to access new mineralized areas that should help further ramp up production."
Social Agreements Open Access
In May, the company announced it had signed a 15-year social agreement with the community of Carhuapata in Huancavelica, Peru. Combined with a 12-year agreement signed with the community of Huachocolpa, the company said the new social contract grants Silver X access to the totality of the Plata Mining Area.
The company noted the 15-year agreement covers 100% of the project and was given unanimous approval by Carhuapata's community assembly.
Silver X noted that the Plata mining area in Nueva Recuperada is "a significant component of Silver X Mining's growth strategy" and includes 17 surface-exposed mineralized veins, offering substantial exploration potential.
Historical data from about 30,000 meters of drill cores and 8,000 meters of underground samples indicate rich silver-polymetallic deposits, with a non-compliant historical inferred resource of 448,812 tonnes grading 220.81 g/t Ag, 2.55% Pb, and 4.58% Zn, the company said.
The data also show the existence of several high-grade silver and polymetallic veins, some of which were mined in the past century, Silver X said.
The Catalyst: Silver Bull Market in the Cards?
Global demand for silver is growing and experts say the pressure to find more will only increase. The metal is the most conductive element in nature and important to the green energy transition as it's used to coat electrical contacts in computers, phones, cars, and appliances. It's also an important element in solar technology.
Silver spot prices rose to a new all-time high of US$32.43 per ounce on May 20 and have continued to hover around US$30 since. The price was US$31.92 on Thursday.
Asset manager Chen Lin of What is Chen Buying? What is Chen Selling? noted that the Chinese language itself reflects the significance of the metal: the term for "bank" directly translates to "silver trading depot."
Because of the metal's safe-haven characteristics, the weaking U.S. dollar, and the persistent need for industrial applications, Chen said silver in 2024 has "emerged as one of the top-performing commodities, surging by more than 30% and outpacing even gold."
"Industry experts suggest that this silver rally is just the beginning, citing minimal technical resistance between the US$30/oz and US$50/oz price levels," Chen wrote on June 19. "Based on these observations, I anticipate that silver will surpass the US$50/oz threshold during this cycle and subsequently stabilize within the US$30-US$50/oz range for the foreseeable future."
Streetwise Ownership Overview*According to the Silver Institute's World Silver Survey, global demand for silver "massively exceeded" supply last year, a deficit that is expected to extend into a fourth consecutive year in 2024.
Ownership and Share Structure
According to the company, Silver X has 200.4 million shares outstanding.
Silver X said management and insiders own approximately 15% of the company. According to Reuters, President and CEO Jose Garcia owns 7.10% of the company, and Vice President Sebastian Wahl owns 7.14%.
The company said institutional investors own 10%. Some listed by Reuters include Baker Steel Resources Trust Ltd., which owns 9.73%, US Global Investors Inc., which owns 3.99%, and Sprott Asset Management LP, which owns 0.92%.
The rest is in retail.
Silver X has a market cap of CA$60.11 million and a 52-week trading range of CA$0.16 and CA$0.35 per share.
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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.
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