TSXV:SLVR - Post Discussion
Post by
666999 on Dec 16, 2020 11:38am
ECHELON CAPITAL MARKETS - TOP PICK
Silver Exploration/Developer Valuations: In terms of the broader silver developer comps, Silver Tiger is now the third least expensive at an EV/oz of $0.59/oz AgEq, down -36% from $0.92/oz when we initiated coverage on Nov. 2., due to the November equities sector rotation and silver sell-off, and apparent profit taking. - At these levels, we believe that Silver Tiger has good room to run from eventually expanding grade and ounces as the area they're drilling in contains high-grade silver-gold veins relative to the current resource estimate grade. We believe the market may be mis-judging the potential contribution that these high-grade veins could provide within the wider gold-halo mineralization and resource grade.
Top Pick: - Silver Tiger Metals Inc. (SLVR-TSXV, $0.39, Speculative Buy, PT $1.30) – Potential for splashy high-grade drill results. Market may not fully realize that the narrow-high grade veins near-surface run through a large bulk-tonnage gold halo, or that significant potential for even greater bonanza grade at depth exists.
Please see further info below on our Silver comps recent performance and our outlook for the metal going forward.
Silver Exploration/Development Equities’ Valuations and Recent Performance Silver Exploration/Developer Valuations: In terms of the broader silver developer comps,
Silver Tiger is now the third least expensive at an EV/oz of $0.59/oz AgEq, down -36% from $0.92/oz when we initiated coverage on Nov. 2., due to the November equities sector rotation and silver sell-off, and apparent profit taking.
- At these levels, we believe that Silver Tiger has good room to run from eventually expanding grade and ounces as the area they're drilling in contains high-grade silver-gold veins relative to the current resource estimate grade. We believe the market may be mis-judging the potential contribution that these high-grade veins could provide within the wider gold-halo mineralization and resource grade.
The overall group average comparable EV/oz is mostly unchanged since Nov. 2 at $2.18/oz, while the price of silver has only recovered about half of what it lost since the Nov. 6 sell-off. That may portend further gains in silver equities if precious metals prices continue to rise.
Macro-economic Outlook - We have a generally positive view on the macro-economic support for gold and silver given what is expected to be a protracted period of low-interest rates a loose monetary and fiscal policy.
- Next Catalyst: The results of the U.S. senate run-off elections in Georgia could be a significant catalyst for precious metals if the Democratic party captures both senate seats, as that would likely mean higher levels of expected fiscal stimulus than what is currently being discussed in the U.S. Congress and the Republican controlled senate.
Bottom Line - In terms of valuation, both our preferred names Silver Tiger and GoGold appear relatively more attractive to us considering their projects and expected drill results, and given the outsized gains in other silver equity names with what has been, in our view, less impactful exploration results / exploration value to date.
- Despite already having had a good run relative to other silver equities, GR Silver could still get some traction with results from drilling which might be more impactful to their current resource than bellwether Silvercrest.
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