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Savvy Stockhouse investors know good business is where you find it. And equally savvy mining explorers and geologists know that certain mineral regions and the target areas within them consistently produce dependable high-grade results. Billionaire mining investors is acutely aware of the geophysical occurrences and often huge capital investments in early-stage junior exploration companies that show great promise because they hold the drilling rights to great properties. Pretty simple math, eh?
That’s why Mr. Sprott has put his money where his mouth is to the tune of $15 million in a private placement (aggregate gross proceeds). The beneficiary is
AbraSilver Resource Corp. (ABRA) (
TSX-V.ABRA,
OTCMKTS: ABBRF,
Forum)
– formerly AbraPlata – a well-funded Toronto-based, multi-asset mineral exploration company that’s offering investors exposure to silver, gold, and copper through projects at various stages of exploration…from drill-ready to the preliminary economic assessment stage.
The Company is providing excellent leverage to silver and gold through a 100-percent interest in its large-scale, high-grade Diablillos project, which has a measured and indicated resource base of over 140 million ounces of silver-equivalent in the mining-friendly Salta province in Argentina. Its other key projects include the Arcas Copper-Gold Project in Chile – which is partnered with Rio Tinto – and the La Coipita Project located in one of the world’s most endowed copper-gold belts in Argentina.
Stockhouse Media’s Dave Jackson was recently joined by President and CEO John Miniotis to discuss recent company news, what’s to come down the gold & silver exploration pipeline, and investment opportunities the extremely robust South American metals & mining sector.
TRANSCRIPT BELOW:
SH: So to start off, John, can you tell us a bit about yourself and the history of the company?
JM: Sounds great. Yeah, I'd be happy to. I'll start off with the history of the company which has been around since 2016. So back then the company was called AbraPlata. It acquired a hundred percent stake in an advanced stage silver gold project called dear believers, as you mentioned from SSR mining. So the project already had over 40 million us spent on exploration. So it already had a large resource base of 80 million ounces of silver, 730,000 ounces of gold. All of which in the indicated category. And then under the former management team, they put together an economic study which showed very good returns using quite conservative commodity price assumptions comparedto these prices. So, you know, showing that this is already an economic project and now myself and my management team, we were running another company called Athon Minerals which was looking for acquisition opportunities.
And so we came across the oblique close, we actually did a lot of due diligence on the project and identified some significant exploration targets which were previously untested. So we ended up merging the two companies back in December 2019. So about 15, 16 months ago now. And then started our exploration campaign, which has been thankfully very successful today. And I'm surewe'll talk about that in more detail shortly, but anyhow, I mean, now the company's in very strong financial shape. We're continuing to drill. We expect to be coming out with an updated resource within the next three to four months here. And that that's a high-level history of the company. So in terms of my background, just, just briefly I've been in the mining industry, my entire career.
So about 17 years now, I've been focused on corporate development and capital markets side of the business. So I've worked for a number of larger companies. So Barrick Gold, Lundy mining, or Rico Metals. And then of course I was running Athon Minerals, which has now merged into our silver. And in addition to myself, I mean, I'd say that our company is very fortunate, and we have a very strong exploration team based down in Argentina. And so will our team knows this asset now very, very well. I'd say they continue to identify new targets for us across the property. So I'd say overall, we have a good balance of capital markets experience as well as a very strong exploration team combined with a very, very good asset. So I feel we have all the right ingredients in place here to continue to be successful.
SH: Can you update our investor audience and your AbraSilver shareholders on any new company developments, especially in the wake of COVID-19?
JM: Yeah, for sure. I'd say thankfully,we've been quite fortunate, so other than increased health and safety precautions, which of course we're all taking. And so that site, I mean,we test all the workers that go up every two weeks. We've implemented a number of social distancing measures at camp, etcetera. But aside from those, COVID, hasn't really had a major impact on us at all. To date I'd say so knock on wood. We're very thankful for that. Our chief geologist, the rest of our exploration team live in Salta, which is the same province where our projects located. So there haven't been any travel restrictions at all, for them going up to site whenever needed, they, they drive up to site. And so yeah, for the company, I'd say 2020 has really been all about drilling.
And with the good results we've been achieving we've, up-sized our drill program several times. So we started off with 3000 meters initially upsize that to 13,000 meters, and now we've ended up drilling 15,000 meters as part of this phase one program. Soit's been one of the busiest years at site in the project's history. Sodespite COVID and so now where we're at, I mean, we're wrapping up our phase one drill program, and then that we're immediately going to roll into our phase two program, which will be another thousand meters at minimum testing several step out targets across the property. So, you know as we get back all the results from phase one program, as I mentioned, we'll come up with an updated resource. And yeah, later this year, we'll publish an updated economic study as well. So weexpect definitelyanother busy year for sure.
SH: The Company just recently announced Continued Drilling Success with “intersects of substantial high grade, near-surface silver & gold mineralisation at Diablillos.” Can you expand on this for investors and what the initial drill results look like?
JM: Sure. Soactually every few weeks herefor a number of months you know, we went down the, the latest drill results as, as we get them back from the lab. So we've been coming out with press releases very regularly, we expect that to continue going forward. So what's important to note of our last several press releases. I mean, it's a mineralization that we've been encountering here. It's not just high grade. But it'simportantly over very broad intercepts, like over broad thicknesses. And importantly, again, we'll get a close to surface. So it's definitely going to help us add economic ounces pretty quickly I'd say so we we've had several hybrid intercepts. So out of the, I think we we've announced a 36 drill holes now to date. I believe over 30 of them I've had intercepts, which were more than double the existing resource grade.
So we've definitely been hitting high grade consistently almost in practically every hole we've drilled here. And so, you know, our, our best drill intercept to date was announced about a month ago now that was 103 meters of over 500 grams per ton, silver equivalent. And that started at a depth of only full a 140 meters down hole. So very shallow again, open pittable within oxides. So we expect very economic mineralization fromholes like that. And in that same release we hit another hole, which was 125 meters away. And that hit again, I think it was over 60 meters of very good silver and gold grades at similar depth. So right now what we're doing is we're drilling five holes in between that, you know, 125-meter distance and just trying to testthe potential of that current zone, which could potentially be much higher grade than, than one was estimated under the old resource.
SH: These intersects followed up some excellent results in early February. Can you unpack these as well?
JM: Sure. Yeah, So throughout the year, I mean, essentially it has been three different zones that we've been focused on drilling. And we expect to add resources from, from all three zones when it comes down to come out with, with our updated statement. So our initial target was actually what we called the peeper gold zone. So within oxides, that was basically at the base of the proposed pit shell. And so we had identified several high-grade targets in that area Joel doze out and got some excellent high-grade intercepts. So, you know, over 20 grams per ton of gold over several meters’ thicknesses. So it was a very good result from this deeper gold zone, but as we were drilling these deeper holes, I mean, we were hitting very good grade mineralization within the first hundred meters from surface as well.
So that was a bit of a positive surprise. And so we identified what was sort of a shallow gold zone. This was initially you know, initially referred to as a waste in the previous PA study. And so, you know,we drove tested that as well. I've announced some, several high-grade hits from, from that shallow gold zone. And so again, that could significantly improve the economics going forward as we were essentially turning what was waste material in the old study into now, you know, economic mineralization that would have had to be mined out anyways and for, for the open pit. And that was the second zone. And then the third zone where we've been intersecting most recently just our last press release. We talked about a hole in the Northeast zone, so this is a step out, I think it was 200 meters away from the current pit in the Northeast zone. And that last hole, again, its multiple zones of high-grade mineralization throughout the whole. And so that's now priority target for us as well. And so as part of this next phase, the phase two drill program, we'll be testing that, that step out zone in a lot more detail, but we're very, very pleased. I'd say today, it's looking like this, this has significant potential for expansion here.
SH: The Company looks set for strong growth continuing this year, following up a great start to year. For company shareholders and potential investors, what further exploration and drill programs do you have planned?
JM: Yeah, so I mentioned we're rolling straight into our phase two drill program now, which will be a minimum of 10,000 meters, which we should have complete sort of by the end of July, I'd say. And then at that stage we'll of course consider expanding the program. If there are still several targets were withdrawing beyond that. And so that's around the same time as we'll be coming up with our updated resource estimate as well from the phase one drilling. So we, we expect that could be a material catalyst for us. So yeah, no, certainly a busy year ahead. We continue to drill, continuing to have you know, announcements every few weeks. And yeah, going into the phase two trial program and then the updated resource estimate, which like I said, could be material for it.
SH: I have to mention your stock has had a very nice run over the last 12 months…nearly a ten-bagger in value since April 2020. What can you tell our investor audience regarding the current valuation of your stock and why you think it’s still a good buy right now?
JM: So, so I'd say the stock's definitely done quite well. I meanwe're of course happy. I mean, yeah,we started off admittedlyat a very extremely low base, so that definitely helped. So essentially our replat under the former management team had completely run out of cash. And so it was trading as is almost a shell company. So it had a market cap of under $10 million. But of course the project had merit. And so now of course we're in a completely different shape. So this company has undergone a really quite a radical transformation here with $18 million of cash in the bank. So strongest financial position we've ever had as a company, we've proven the multiple exploration targets here you know, and, and continue to do so. And I'd say even though the, the share price has had a good run especially on a, on a percentage return.
I think I feel strongly, I mean, we remain under value and at the moment, I think we're where we're trading at right now. If you look at the PA study and that was previously put out adjust that for, you know, close to current commodity prices, I think we're trading at like 30 cents on the dollar still based on that study, of course assumes a bit of an outdated resource estimate now. So there's still a lot of blue-sky potential here. And so, yeah, we're, we're continuing to advance the project forward and we imagine that the share price should hopefully take care of itself over time.
SH: Can you tell our audience a little bit about your corporate management and board, along with the experience and innovative ideas they bring to the metals & mining space?
JM: Sure. So, we have a verylean management team. So I'd say that's one of the distinguishing features of us as well, we're quite unique. So in that certainly helps keep G and A costs at an absolute minimum. So there's really only four of us. They need management. So, you know, I already mentioned myself or chief geologists who lives down in Salta. And in addition to that, we have a CFO out of Toronto and a country manager of one of those areas in Argentina. And both of them are very,experienced as well. So that's really, it I'm extremely lean team of only four people. And then of course, in terms of our board members, we're very fortunate. Again, we have a very strong board, I'd say with an excellent mixof skills. So we have several members with investment banking and corporate development experience similar to myself, but then we have, you know, one of the top mining lawyers on our board and in Argentina an Argentinian mining lawyer was a co-founder of the company as well as a very seasoned geologists. We spent years studying similar projects across South America as well. So very complimentary skill set, I'd say, certainly makes my job easy. Just having all the support around me and a great team in place.
SH: What’s the long-term strategy for the company moving into 2021 and beyond, and what retail and institutional investors should be looking out for?
JM: Yeah. So, I'd say the strategies, honestly, it's pretty simple. I mean, continuing to grow the project, advance it forward towards a construction decision. So, you know, this is quite an advanced stage project already, as I mentioned. And we think we get expected construction decision can be made here in less than 24 months time. The goal is to have a construction ready project, all permits in hand. And we see this as being one of the few primary silver projects globally that will have costs in the lowest portal that will be construction ready within the next few years. And, you know, it should be economic really under any foreseeable commodity price environment. So there's definitely very high scarcity value earwith what we have. And we're moving the project forward as quickly and aggressively as possible. I'd say. So that's a strategy is continuing to grow this and events at closer toa construction decision.
SH: And finally, John, if there’s anything I’ve overlooked please feel free to elaborate.
JM: Perfect. No, no, thanks. Thanks again for the opportunity. I mean, hopefully that was a good overview of the company. I'd say, you know definitely stay tuned for more exploration use. Certainly, investors should, should look out for the updated resource an economic study, which we'll be releasing later this year. And in the meantime, we'll, we're just going to stay focused on executing, continue to unlock value for shareholders and, you know, hopefully I think the fun is just getting started here for proper silver.
For regular updates, visit
www.abrasilver.com.
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.