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2024/11/2 7:22:23
(AGX:TSX.V - AGXPF:OTC)
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Silver X Mining Corp. (AGX:TSX.V; AGXPF:OTC) reported
its Q3 2024 operational results. The announcement marked continued growth in silver production at the Nueva Recuperada project in Peru. Over the first three quarters, Silver X achieved a 30% increase in silver-equivalent output compared to the same period last year. Alongside this production increase, the company mined 52% more ore and processed 42% more. These results underscored the significant growth Silver X has experienced in mining capacity.
The third quarter, while not directly comparable to Q3 2023 due to an operational reset last year, saw steady production amid a return to optimized operations. The company's CEO, Jose M. Garcia, commented on the production gains, stating in the news release, "Our wholly-owned Nueva Recuperada project is producing as expected. We are pleased with the steady growth of the operation and are excited about the future of this project." Garcia added that Silver X anticipates releasing financial results for Q3 in the coming weeks, with silver prices providing a favorable backdrop.
Additionally, Silver X announced a change to its board, as Sebastian Wahl resigned from his position as a director. Garcia expressed gratitude for Wahl's contributions, wishing him success in his future endeavors.
Why Silver?
In a report by Kitco on October 17, industry experts highlighted the persistent demand for silver, with an anticipated 215.3 million ounce deficit. This would be the second-largest in over twenty years. As global silver demand was projected to reach 1.219 billion ounces, Mitchell Krebs, CEO of Coeur Mining, remarked on silver's critical role in the ongoing electrification of the global economy, noting in the Kitco write-up, "I have never seen a better outlook for silver." Matt Watson, President of Precious Metals Commodity Management, reinforced this sentiment, stating, "It's the do-it-all metal on the Periodic Table," underscoring silver's versatility in industrial applications.
Timothy Lee, mining analyst at Red Cloud Securities, reaffirmed his BUY rating on Silver X Mining Corp. on October 25.
On October 25, CBS News reported the sustained growth in silver prices, which saw a nearly 42% increase. This jump positioned silver as a top-performing asset throughout 2024. The global push toward green technology, particularly solar panel production, has also bolstered industrial demand for silver. This demand increase, however, has been accompanied by notable price volatility. CBS observed that silver's dual role as both an industrial and precious metal subjects it to shifts in both investment demand and industrial consumption trends.
Barchart's October 26 analysis provided insights into recent market behavior. The report tracked silver futures' price movements as they approached and briefly surpassed the US$35 mark. The report detailed a cycle of profit-taking and re-entry by buyers and noted key Fibonacci resistance and support levels. Barchart also outlined continued bullish prospects for silver futures as traders capitalized on these fluctuations in response to technical signals and price targets.
The Catalysts Driving Silver X
Silver X's recent growth trajectory highlights a series of strategic catalysts at its Nueva Recuperada project. The company's October 2024 investor presentation outlined a goal to expand production capabilities in one of Peru's largest underdeveloped silver districts. The ongoing underground development supports both new production and expanded resource capacity, aiming for a 720 tons per day (tpd) output , up from the current 600 tpd.
Beyond increasing production, Silver X continues to develop the Plata Mining Unit, which is expected to begin operations in 2025, which will contribute to the overall output. Silver X also highlighted its extensive land holdings of over 20,000 hectares, providing exploration opportunities in a district containing over 500 identified veins. According to the presentation, these development initiatives aim to build Silver X into a premier silver producer with a sustainable resource base in Peru's silver-rich Andes.
Analysts on Silver X
Timothy Lee, mining analyst at Red Cloud Securities, reaffirmed his BUY rating on Silver X Mining Corp. on October 25. Lee assigned a target price of CA$0.80 per share, which represented a potential 125% increase from the recent close of CA$0.36. He also indicated that Silver X's recent production data at the Nueva Recuperada project showcased steady progress. That progress, with year-to-date metal production rising by 30% and tonnage mined up by 52% over the same period last year, aligned with Silver X's ongoing development work at its Tangana Mining Unit. This focus was one that Lee noted as potentially enhancing overall production capacity.
Although Q3 2024 saw a slight decline in metal production, primarily due to lower grades and reduced gold recovery, Lee observed that these variations were anticipated and did not detract from Silver X's long-term outlook. According to Lee, "Silver X could benefit significantly from further production ramp-up in this strong precious metals price environment," particularly as the company continues to expand its production base.
Lee's target valuation factored in a sum-of-parts approach, including a discounted cash flow (DCF) model for Nueva Recuperada and a nominal purchase value for Silver X's Coriorcco asset.
| | Retail: 75% |
| | Management and Insiders: 15% |
| | Institutions: 10% |
75.0%
15.0%
10.0%
*Share Structure as of 7/11/2024
This balanced assessment, despite recent production variability, underscored Red Cloud's positive outlook, driven by potential advancements at Plata as a secondary ore source. With these developments underway, Lee highlighted Silver X's capacity to leverage favorable market conditions, pointing to strong fundamentals for the silver sector as a whole.
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..
The company said institutional investors own 10%, including Baker Steel Resources Trust Ltd., which owns 9.73%. The rest is in retail.
Silver X has a market cap of CA$47.08 million and a 52-week trading range of CA$0.16 and CA$0.35 per share.
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