Mining Company Identifies Large-Scale Gold-Copper System

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AbraSilver Resource Corp. (ABRA:TSX.V; ABBRF:OTCQX) announced assay results from four initial reconnaissance holes drilling into a major porphyry system at its wholly owned Diablillos Project in Argentina.

Results indicate that the drilling has tested the upper part of a system that is estimated to span up to 3 kilometers in length and 2 kilometers in width about 3.5 kilometers northeast of the Oculto depsoit, the company said in a release.

The porphyry mineralization appears to have a high-grade gold epithermal overprint and hosts "zones of gold, silver, and copper, including some high-grade intervals," the company said.

"The widespread gold mineralization, along with associated copper identified in this initial drilling program indicates an overprinting of epithermal mineralization on the upper portion of a porphyry system," said AbraSilver Chief Geologist Dave O'Connor.

"All drill holes encountered porphyry-style alterations with well-developed stockwork veining and abundant sulfides," O'Connor continued. "The high-sulfidation overprint suggests potential for a shallow, high-grade epithermal gold resource . . .  Additionally, the initial reconnaissance drill hole at Cerro Blanco highlights a likely upfaulted portion of the porphyry system, where mineralization is expected to be closer to the surface. These findings are further supported by nearby surface chip/channel sampling, and, as a result, additional exploration is certainly warranted in this area."

Details of Results

Assay results released Monday include:

• Cerro Viejo: Initial reconnaissance drilling at the Cerro Viejo target in the Diablillos porphyry complex, included three holes confirming widespread gold mineralization. Hole DDH 24-056 intersected 36 meters at 1.91 grams per tonne gold (g/t Au), starting at a downhole depth of only 87 meters, with a higher-grade interval of 5 meters at 7.22 g/t Au. This intercept highlights a shallow, high-grade gold zone easily accessible for future exploration. Surface chip/channel samples further revealed enriched gold values.
• Hole DDH 24-059, located 450 meters north of hole 24-056, intersected broad zones of lower-grade gold and copper mineralization with 81 meters grading 0.25 g/t Au and 0.01% copper (Cu) from a downhole depth of 130 meters. Together with hole DDH 24-071 and the epithermal overprint, this appears to demonstrate the upper part of a robust porphyry system.
• Hole DDH 24-071, located 500 meters south of hole 24-056, intersected multiple zones of gold, copper, and silver mineralization, including a broad intercept of 106 meters grading 0.15 g/t Au starting at a downhole depth of 104 meters. Porphyry-style gold mineralization is shown by drilling to extend over a distance of more than 1 kilometer north-south.
• Cerro Blanco: Due to rugged terrain, drilling in Cerro Blanco was limited to one hole, DDH 24-081, which was not ideally positioned and intercepted only short intervals of gold and copper mineralization. However, historical and recent surface sampling revealed high-grade zones with copper-rich intervals, offering promising targets for future exploration.

"Our initial drill results unveil the significant potential of the Cerro Viejo area to host a new high-sulfidation epithermal system," President and Chief Executive Officer John Miniotis said. "We are particularly encouraged by the shallow, high-grade gold mineralization identified in hole DDH 24-056. Ongoing exploration efforts are currently being planned to help further define this promising new target."

Phase IV Program Ongoing

AbraSilver said its ongoing Phase IV drill program is focused on expanding the existing Diablillos Mineral Resource estimate at a number of target areas with known mineralization as well as exploring newly identified prospective exploration targets. The company said it has two drill rigs operating and has completed about 19,000 meters of drilling in 96 holes. Several assay results are outstanding and will be released on an ongoing basis,

A Definitive Feasibility Study (DFS) Update is being managed by a team of experienced engineers and consultants, supported by the company's technical team, AbraSilver said.

The Daily Gold Premium, in a January 5 analysis, emphasized the significance of the Diablillos project and highlighted the transformative impact of the JAC Zone discovery, which added 36 Moz Ag at 212 g/t, referring to it as a "game changer."

The company will undergo a competitive tendering process to select qualified engineering,

procurement, construction, and management firms, with the awards anticipated by no later than April 2025.

Last month, the company announced it had filed an updated Pre-Feasibility Study (PFS) for Diablillos. It highlighted robust project economics, including a net present value (NPV) of US$747 million at a 5% discount rate and an internal rate of return (IRR) of 28%, supported by a two-year payback period. These figures are based on conservative pricing assumptions of US$25.50 per ounce of silver and US$2,050 per ounce of gold.

AbraSilver has identified significant mineral reserves and resources at Diablillos, with Proven and Probable Reserves of 42.3 million tonnes grading 91 g/t silver (Ag) and 0.81 g/t Au, totaling 123 million ounces (Moz) silver and 1.1 Moz Au. Measured and Indicated Resources include 53.3 million tonnes grading 87 g/t Ag and 0.79 g/t Au.

Zone Discovery a 'Game Changer'

The Daily Gold Premium, in a January 5 analysis, emphasized the significance of the Diablillos project and highlighted the transformative impact of the JAC Zone discovery, which added 36 Moz Ag at 212 g/t, referring to it as a "game changer."

In a January 2025 report, Christopher Ecclestone of Hallgarten & Company echoed a positive outlook for AbraSilver, citing its robust performance in 2024 and substantial resource base. He highlighted the Diablillos project's ability to produce 13.4 Moz silver equivalent (Ag Eq) annually at an all-in-sustaining cost of US$12.67 per ounce, with projected annual cash flows of US$300 million over the first five years.

Ecclestone also underscored the scalability of the project, referencing ongoing drilling programs aimed at extending resource life and increasing production capacity. He maintained a target price of CA$4.20 for AbraSilver, reflecting confidence in the company's ability to deliver shareholder value through strategic resource expansion and project optimization.

The Catalyst: Could Silver Outperform Gold This Year?

Both gold and silver recently hit four-week highs, and gold is expected to have another solid year, but investors should brace for some volatility and temper their upside expectations, Kirill Kirilenko, Senior Analyst at CRU, told Kitco News' Neils Christensen.

He predicted gold prices would average around US$2,580 per ounce in 2025 as markets react to Trump's proposed economic policies. The analyst had more optimism for silver, forecasting an average price of US$31.35 per ounce for the year.

"Silver could slightly outperform gold this year, driven by an increasingly tight fundamental outlook," he said.

Bob Moriarty of 321gold gave another reason for looking at the white metal. "Silver is absurdly cheap," he said earlier this month. "My belief is if you're faced with three or four different alternatives for investing, you should buy what's cheap, and you should save."

Silver's record of US$49.95 per ounce was set in 1980. It was US$30.55 per ounce on Tuesday.

"Silver has got a long way to run," Moriarty said. "My opinion is silver will always be the most attractive investment in the resource sector."

Ownership and Share Structure

According to Refinitiv, the top six strategic entities own 21% of AbraSilver. The top three shareholders are: Eric Sprott with 9.9%, Kinross Gold with 4%, and Central Puerto with 4%.   

Additionally, the top three insiders are CEO Miniotis with 1%, Director Hernan Zaballa with 0.83%, and Chairman and Director Robert Bruggeman with 0.86%.

Nine institutions hold 6.84% or 8.58 million shares. The Top Three are Mirae Asset Global Investments (USA) LLC with 2.1%, ETF Managers Group LLC with 1.74%, and Sprott Asset Management LP with 1.2%.

The company has 129.51 million outstanding shares. Its market cap is CA$333.5 million. Its 52-week high and low are CA$3.58 and CA$1.30 per share, respectively.