Dear Silver Range shareholder:
May I start by extending the compliments of the season to you and yours and best wishes for 2022. Perhaps like you, I'm glad to see 2021 in the rearview mirror, but nonetheless grateful for progress made in spite of adverse conditions. Here's a summary of what Silver Range accomplished in 2021 and some prognostications for the new year.
What do we do & how do you benefit? Silver Range is a prospect generator. We identify potential projects through research and reconnaissance field prospecting. We then stake prospective targets and explore them to locate attractive drill targets. Finally, we vend our prospects to companies looking for drill-ready prospects. In return, we get compensation in the form of cash, tradeable shares, royalties, future contingent success fees and other arrangements of benefit to the company. We may choose to spin out a particularly attractive target into a new company if this could provide superior returns to shareholders. In general, we avoid drilling on our own account in order to invest our capital in a larger number of targets; we leave the drilling to our partners. You'll note that many of our more recent agreements call for a minimum drilling commitment.
Silver Range is focused on gold and silver targets in Nevada, Nunavut and the Northwest Territories. We have a number of legacy projects in the Yukon as well. We have branded ourselves in the market as the "High Grade Prospect Generator" by concentrating on acquiring targets with surface mineralization grading better than 5 grams per tonne gold (g/t Au) or, equivalently, greater than 400 grams per tonne silver (g/t Ag).
How do you as a shareholder profit from all of this? If our partners drill and make a significant discovery, you benefit from share price appreciation and a more liquid market in which to capture some of that profit. If we spin a project into a new company, you receive shares in that new company and they too may appreciate and be readily saleable in the event the new company makes a discovery. We are prospectors and to succeed we have to make statistics work for us. The odds of a mineral showing eventually becoming an operating mine have been estimated at around 1,000 to 1. If you invest in a one or two project company, you are facing long odds. If you invest in a project generator such as Silver Range, you face much better odds of eventual success provided the company has a large project portfolio
and it gets that portfolio into the hands of partners willing to drill them and make discoveries. Silver Range currently has optioned 14 of its 43 projects and generated four additional royalty projects. Your odds of success are now 55:1. As we develop the business by acquiring and vending new projects, these odds will continue to improve.
There are problems along this road. A company focused on drilling one or two projects is of more interest to the general investing community than a prospect generator. A one-project company can more readily raise money and its stock is more volatile, providing investors with more opportunities for short term gains. David Cole, founder of the very successful EMX Royalties once joked that prospect generators are on the "get rich slow program". There's some truth to this. In general, we've noted that prospect generators are not market darlings and a long-term commitment is necessary to reap a reward. Gamblers will find one-project companies more exciting. A prospect generator that sticks to its knitting might in the end be a much better bet, however.
Prospect generators have one advantage over their flashier, single project cousins, as they can minimize share dilution and related share price decline. Single project juniors have to drill. This is expensive and they are constantly raising money by selling shares. At the end of their life cycle (after striking out several times), they have a mountain of shares outstanding and can no longer attract investment. The company is then forced to roll back their share structure, exchanging 10 or 100 old shares for 1 shiny new share. The retail investor / shareholder invariably takes a loss. A successful prospect generator, on the other hand, eventually becomes self-financing when option / sale proceeds defray operating and exploration costs. With sufficient cash flow, they can even look at normal course issuer bids to buy back shares to support their share price when markets are soft. Our sister company, Strategic Metals, has done this for years.
Let's take a deeper look at our operations, starting with our investment performance and finances, look into sales and finally, summarizing some notable successes this year.
Stock performance & financing 
Our stock performance this year has been disappointing. I won't speculate on factors outside of our control. With respect to factors under our control, constricted news flow may have contributed to a softer share price. In 2021, we concentrated on advancing some of our better projects rather than adding a lot of new grass roots projects. This, together with delays of up to 3 months in getting assay results, constrained both operations and news flow. Our discussions with the assay labs suggest that the situation is likely to improve in2022. In any event, we will be putting out a lot of news on Nevada projects in the coming months as the backlog is clearing. Finally, the Broden Mining deal, discussed below, might significantly lift our share price in the New Year. We live in hope. If it's any comfort, I have been steadily accumulating Silver Range shares over the past four years and feel the pain as well.
We conducted one financing during the year raising $585,500 at a price of $0.25 per share with a $0.33 three-year warrant. In hindsight, the timing appears to have been perfect. Currently we have 84,708,923 shares outstanding. Management intends to minimize additional financings by relying on returns from option agreements to finance operations.
Financial performance Silver Range turned a profit of $159K in 2020 and is on track to turn a profit of approximately $1.2M for 2021. At year end, we will have approximately $500K in cash and $3.1M in working capital, largely tied up in relatively illiquid shares. We have maintained general and administrative expenses at slightly less than $400K. We would like to see this lower and continue to work on this. Nonetheless, I should point out that we have the fourth lowest G and A of the 29 prospect generators listed on the TSXV / CSE. To further minimize cash drain on the company, I have personally been taking half of my compensation in shares over the past couple of years.
Project options & sales Sales is the path to glory for a prospect generator and we have tried to concentrate on improving our sales performance in 2021. We completed five transactions covering 11 projects in 2021. A major achievement was selling our South Kitikmeot Gold Project in Nunavut (7 properties) to Viridis Mining & Metals, an Australian company seeking an ASX listing in the New Year. We also sold the Michelle Project in Yukon to Silver47 in return for a significant share position. Both of these transactions are significant as the properties were located in jurisdictions which are out of favour with mining companies. We also optioned or sold three projects in Nevada, converting the Yuge and Cold Springs projects into royalty interests in the process. Our Legal Tender project was optioned to private miner Quartz Lake Mining LLC, which recently also acquired the currently producing Lodestar Mine near Goldfield and bought a mill near Mina. Sometimes success is avoiding failure and in the case of our Skylight Project, we have been able to assist our partner Rush Gold in maintaining the option and getting listed hopefully in Q1 2022.
Partner drilling During 2021, several of our partners completed drill programs totaling over 7,200 m and results from their programs may benefit the company in the year ahead. GGL Resources completed a 15-hole (2,874 m) drill program at Gold Point with significant positive results including 2.22 g/t Au and 13.6 g/t Ag over 12.19 m, including 5.17 g/t gold and 24.8 g/t silver over 4.57 m in one hole. ATAC Resources completed a 16-hole (4,000 m) drill program at our East Goldfield Project following up on very successful surface exploration work. One of their targets was beneath a rock outcrop which returned a chip sample of 4.16 g/t Au over 8.0 m. Results from this program are pending. Victory Resources drilled 10 shallow holes (496 m) drill program on our Loner Project, intersecting low grade gold in granite. They returned the project, and we look forward to seeing their results in the near future. Two other programs have results pending: (i) Silver47 conducted a drill program at our Michelle Property in the northern Yukon; and (ii) Arctic Fox Minerals Corp. drilled our high grade Up Town Gold Property next to the Giant Mine in Yellowknife. Finally, Rover Metals drilled 31 holes at Cabin Lake in the NWT; initial results from 9 holes included intersections up to 6.4 meters of 4.63 g/t Au.
Broden Mining Perhaps the most significant development of the year was progress on an option agreement we signed in 2016. Broden Mining holds an option on our Silver Range Project north of the Faro Mine in central Yukon and has spent five years negotiating an agreement to acquire certain assets comprising the former Faro Mine complex. The assets and parties involved in this transaction are listed in a
Strategic Metals News Release dated August 31, 2021. The assets include five deposits with non-43-101 compliant resources in all categories totaling more than 5.38 billion pounds of zinc, 3.54 billion pounds of lead, 111 million ounces of silver and 870,000 ounces of gold. At current market prices, the in-situ metal is worth more than C$15B. The Keg Deposit, on our Silver Range project, is one of the five deposits in the deal.
To acquire the various Faro Mine assets, Broden Mining has partnered with the Ross River Development Corp. and formed an operating company (Tze Zul Development Corporation). Silver Range has a 10% interest in
Broden Mining to be carried through until all of the asset acquisition agreements with the Ross River Dena Council, the Yukon Territorial Government and the Government of Canada have been completed. Broden Mining plans to go public once the asset agreements are in hand. It seems likely that Silver Range's share price will adjust to reflect our holdings in Broden once the market has an opportunity to value the deal.
Our shares of Broden Mining could be of interest to a larger operator once the Faro land package has been assembled. To preclude this from happening in a manner not in the best interests of our shareholders, the Silver Range Board adopted a rights offering plan described in
a Silver Range News Release dated November 22, 2020.
Project exploration Silver Range concentrated on enhancing our more promising Nevada prospects during 2021. Property work was conducted on the Enigma / Cambridge, Steptoe, Strongbox and Bellehelen Properties. We formed a joint venture with Auburn Gold Mining LLC out of Sacramento, CA to consolidate our joint holdings in the Cambridge Mining District. The land package now covers the former Cambridge Mine and the Price Lode trend (Enigma Property) to the west. In 2020, Precision Geosurveys completed a property-wide airborne total magnetic field and radiometric survey. In May of 2021, we conducted property-wide rock sampling program returning grab samples up to 80 g/t Au and chip samples up to 12.75 g/t Au. A soil survey focused on the main Price Lode, Cambridge and North trends identified over 1 km of highly prospective strike. Detail soil sampling at 12.5 m was conducted in early September and results recently received. We are ready to begin trenching in February.
Reconnaissance soil surveys, rock and stream sediment sampling was completed in two passes at our expanding Steptoe Project in the Egan Range in eastern Nevada. This is a prospective Carlin-style target in lower Paleozoic sediments, similar in geological setting to Long Canyon and Kinsley Mountain further north. Results are pending. At Strongbox, a property-wide soil sample grid covering 2.5 km of strike was completed. Final results are pending.
In addition, a major program including geological mapping, soil sampling and staking was completed at Bellehelen. Geological mapping, previous geophysical surveys and alteration mapping supplemented by XRF geochemistry defined two craters within the larger Bellehelen Caldera and a central younger vent / fracture zone. The latter appears to localize much of the structurally hosted high grade silver mineralization in the district and extends for several kilometres. Finally, at the north end of the district, an intriguing large low grade disseminated gold target was located. This target is in a low-lying area with poor exposure but grab samples from isolated outcrops have returned 0.5 – 1.0 g/t Au along several hundred metres of strike length. Results from a soil geochemical survey over this target are pending. All in all, we expect to release some solid results defining drill targets on these projects early in 2022.
New Projects During 2021 we conducted several reconnaissance projects and staked four new targets. Alimony is a joint venture with local Goldfield prospect Todd Ganno. It covers silica-flooded Milltown Andesite flows north of our East Goldfield Project. Near Yerington, we staked the Opulent Property after a prospecting program located a mesothermal quartz vein system returning assays up to 37.2 g/t Au with a quarter of the samples collected returning greater than 5 g/t Au. Late in the season, we staked the Tonto del Pueblo (Village Idiot) property in northern Nye County, following up high grade gold samples in the public record. Tonto del Pueblo sample results are pending. Finally, we staked the very high-grade Silver Mountain project on the flanks of Death Valley. Sampling there returned grab samples grading kilos of silver per tonne. We also conducted wide ranging reconnaissance programs elsewhere in northeastern and east-central Nevada but alas, these did not yield high grade gold results. The search continues.
Looking ahead to 2022 Silver Range will likely concentrate its exploration efforts in Nevada in the coming year. We are able to explore very cost-effectively in the Silver State in comparison to working in Northern Canada and have enjoyed some real success in Nevada. Our Cambridge Project may end up in a spin-out if results continue to exceed our expectations. We look forward to conducting a major trenching program there in February. Trenching of soil anomalies will be conducted at Strongbox and we look forward to defining a target at Steptoe once all results are in. Bellehelen might yield a very favourable surprise if soil results from the northern grid meet expectations.
On the corporate front, we look forward to Broden Mining closing the asset acquisition and launching its IPO, perhaps in Q2 2022. We intend to ramp up our property sales efforts. In December, John Gilbert was appointed Chief Corporate Development Officer. In addition to working as a contract geologist (M.Sc. in structural geology), he was an early mover in New Brunswick, staking and selling claims to mining companies eager to get in on a minor gold rush in recent years. With his help, we hope to continue placing projects in the hands of partners willing to drill our prospects and unlock hidden value.
Prospectors to the core, we look forward to new discoveries and sales success in the coming year. We count our shareholders as Silver Rangers too and hope you will continue to ride with us in 2022.
Sincerely,
"Michael A. Power" President, Chief Executive Officer and Director