Financial News
Silver Faces Supply Crunch As Industrial Demand Continues Rising
Silver has traditionally been one of the most sought-after precious metals in the world, but in recent years interest in the white metal has skyrocketed thanks to rising industrial demand. Growing need for clean technology like electric vehicle (EV) batteries and semiconductors paired with a dwindling global production is creating a supply crunch for silver, which could send the prices higher and make it “the best investment of the decade” according to David Morgan, founder of the Morgan Report. As demand continues to rise for silver, both for industrial uses and as a hedge against inflation, it could stand to benefit silver companies like Tier One Silver Inc. (TSXV:TSLV) (OTCQB:TSLVF), Pan American Silver Corp. (TSX:PAAS) (NASDAQ:PAAS), Fortuna Silver Mines Inc. (TSX:FVI) (NYSE:FSM), Aurcana SILVER Corporation (TSXV:AUN) (OTCMKTS: AUNFF), and Silvercorp Metals Inc. (TSX:SVM) (NYSE:SVM).
Tier One Silver Inc. (TSXV:TSLV) (OTCQB:TSLVF) is dedicated to generating value for shareholders and stakeholders by finding world-class silver, gold, and base metal opportunities in Peru. Curibaya and Hurricane Silver are the company’s two premier exploration properties in Peru where they’ve found +1000 g/t high grade silver mineralization.
For its 100% owned Curibaya project in southern Peru, Tier One Silver declared on August 2 that it had received the Declaración de Impacto Ambiental (DIA) environmental license from the Peruvian Ministry of Energy and Mines. This means that they are now able to drill their best silver targets on the project – the Cambaya target region, where they’ve retrieved the best channel samples to date. Under the DIA drill permit, Tier One can drill up to 200 holes from up to 20 new drill pads.
The first phase of drilling at Curibaya targeted the source of the high-grade silver and gold surface mineralization and demonstrated that the mineralization extends to depth. However, the best channel sample results came from the Cambaya target area, which is northeast of the previously defined mineralized footprint and the Phase I drill program. The Cambaya target is at a higher elevation, where less erosion has occurred. Therefore, the Tier One team believes there is a larger window for potentially preserved precious metal mineralization.
In addition, the new DIA permit will enable Tier One Silver to drill test for another potential type of deposit at Curibaya – a copper porphyry. In Phase I of drilling, the company saw several indications that copper mineralization may exist at depth, so in their upcoming drill campaign, they plan to follow up on some drill intercepts from Phase I as well as target a potential copper porphyry deposit. The company is currently carrying out a channel and rock sampling program along with CSAMT geophysics to better define targets for the phase II drill program.
Peter Dembicki, Tier One Silver President, CEO and Director, said: “Receiving the DIA permit is a key milestone for Tier One Silver as it will allow us to drill our highest priority silver and gold target on the Curibaya project, in addition to newly developed copper porphyry targets. Our confidence in the potential of Curibaya has continued to increase as we explore the project. We look forward to our second phase of drilling, which will commence once the results from ongoing surface sampling and geophysical programs have been received.”
On August 26, Tier One silver announced that it had received a receipt for the final short form base shelf prospectus filed with the securities commissions in each of the provinces and territories of Canada.
The purpose of the Shelf Prospectus is to provide the company with financial flexibility. Under the Shelf Prospectus, Tier One Silver may, from time to time for 25 months during which the Shelf Prospectus is in effect, sell and issue up to C$100,000,000 in common shares, warrants, subscription receipts, units, debt securities, or any combination of these. If there is one, the specific terms of any potential future offering of securities will be described in a prospectus supplement that will be delivered to the relevant Canadian securities regulators.
For more information about Tier One Silver Inc. (TSXV:TSLV)(OTCQB:TSLVF), click here.
Silver Mining Companies Report Quarterly Production
On August 10, Pan American Silver Corp. (TSX:PAAS)(NASDAQ:PAAS) reported its mineral reserves and estimated mineral resources as of June 30, 2022. There are thought to be 514.9 million ounces of silver and 3.6 million ounces of gold in proven and probable mineral reserves. Measured and indicated mineral resources are projected to contain 8.1 million ounces of gold and 838.6 million ounces of silver, excluding proved and probable reserves. In addition, there are 5.7 million ounces of gold and 507,7 million ounces of silver in inferred mineral resources. Silver production amounted to 4.5 million ounces in the second quarter, and gold production to 128.3 thousand ounces. Revenue came in at $340.5 million. Pan American recorded a net loss of $173.6 million (basic loss of $0.83 per share), while the adjusted loss was $6.5 million ($0.03 basic adjusted loss per share). Silver segment cash costs and all-in sustaining costs (AISC) per silver ounce were $12.10 and $17.30, respectively. Excluding NRV inventory adjustments, the silver segment’s AISC was $15.90 per ounce.
Fortuna Silver Mines Inc. (TSX:FVI)(NYSE:FSM) announced that Paul Criddle has voluntarily decided to leave his role as chief operating officer for West Africa, ending September 30, 2022. Paul submitted his resignation due to personal circumstances, although he will continue serving as the organization’s senior advisor until the Séguéla Mine in Cote d’Ivoire is fully built. With effect from October 1, 2022, David Whittle, formerly the Vice President of Operations for West Africa, has been elevated to Director of Operations for West Africa. In the second quarter, Fortuna Silver reported gold and silver production of 62,171 ounces and 1,652,895 ounces, respectively. That is an increase of 100% and a decrease of 13%, respectively, compared to Q2 2021. Gold equivalent production was 96.7123 ounces. Net income came in at $1.7 million or $0.01 per share, compared to $16.2 million or $0.09 per share net earnings reported in the prior-year quarter. Adjusted net earnings were $2.1 million compared to $21.5 million reported in Q2 2021. Sales were $167.9 million, a 39% increase from $120.5 million reported a year earlier.
As announced in previous press releases, certain indirect wholly-owned subsidiaries of Mercuria Energy Group entered into certain standstill and restructuring agreements with Aurcana SILVER Corporation (TSXV:AUN)(OTCMKTS:AUNFF) effective March 8, 2022. These agreements included granting Aurcana a waiver of all current events of default and a standstill agreement in connection with the company’s $28 million five-year term loan (and related hedging package). A mortgage and security arrangement in favour of Mercuria is in place on the Revenue-Virginius Mine (the “RV Mine”), which is owned and operated by Ouray Silver Mine Inc., a subsidiary of the firm, to protect payments owed to Mercuria in connection with the aforementioned term loan. Alliance Management, Inc. was named Receiver for the RV Mine by the District Court in Ouray County, Colorado, on July 7, 2022. All civil legal activities against Ouray Silver Mine Inc. and the RV Mine, including all arbitration processes and foreclosure actions, have been stayed as a result of the appointment of the Receiver, who now has control and custody of the RV Mine. As was previously reported, Aurcana and Mercuria attempted to restructure their debt comprehensively, including through alternative financial and strategic agreements, but they were unsuccessful.
A normal course issuer bid started on August 29, 2022, to acquire up to 7,079,407 of Silvercorp Metals Inc. (TSX:SVM)(NYSE:SVM) own common shares, representing approximately 4% of the 176,985,184 common shares issued and outstanding to August 16, 2022. The buyback program will expire on August 28, 2023. Silvercorp believes that the market currently undervalues the company’s shares. If this undervaluation continues, the OPRCA will increase the shareholder value of the company by reducing the number of outstanding shares.. Silvercorp reported adjusted earnings of $13.5 Million, $0.08 per share and an operating cash flow of $40.2 Million for Q1 2023.
Tier One Silver’s management and technical teams have a strong track record in raising capital, discovery and monetizing exploration success.
Featured Image: Megapixl @ Tomas1111
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