One analyst called Blackrock Silver Corp.'s (BRC:TSX.V; BKRRF:OTCQX) updated mineral resource estimate (MRE) released Wednesday for its historic 100%-controlled Tonopah West project in the Walker Lane trend of western Nevada "blistering."
After incorporating about 25,000 meters of new drilling and reinterpreting the geologic data, the company demonstrated a 135% increase over the maiden MRE released in 2022.
"By breaching 100 Moz Ag Eq (million ounces silver equivalent) of high-grade material on a diluted model basis, we see Blackrock propelling itself into a bona fide silver developer who should now be on the radar screens of investors as an acquisition target," analyst Phil Ker of PI Financial wrote in an updated research note on Wednesday.
Ker rated the stock a Buy with a target of CA$0.80 per share, a nearly 200% increase over its price Wednesday afternoon, CA$0.275.
Analyst Phil Ker of PI Financial rated the stock a Buy with a target of CA$0.80 per share, a nearly 200% increase over its price Wednesday afternoon, CA$0.275.
The updated MRE contains 570,000 ounces gold (Au) and 47.74 Moz silver (Ag), 100.04 Moz Ag Eq. At a 200 grams per tonne (g/t) Ag Eq cutoff, the average grade of the inferred mineral resource is 508.5 g/t Ag Eq, which is a 14% increase over the maiden MRE.
The MRE includes 6.12 million tonnes, a 106% increase over the maiden MRE.
Tonopah, which grew from a strike by Jim and Belle Butler in 1900, was once known as the "Queen of the Silver Camps."
"We are making great strides towards de-risking and reawakening one of the great American silver camps," Blackrock Silver President and Chief Executive Officer Andrew Pollard said. "This updated MRE has seen the footprint of mineralization more than double from the maiden MRE, with the vein corridor now stretching over three kilometers with the inclusion of the new NW step-out target. There are no signs of the system stopping both along strike and at depth."
The Catalyst: Nearly 200 Holes Drilled
The updated MRE captures about 3 kilometers of strike along the Tonopah West vein system, the company said.
Tonopah West is near the town of Tonopah in western Nevada. U.S. 95 traverses the property, and the resource area lies exclusively in the patented mining claims.
The updated MRE could form the basis for a future Preliminary Economic Assessment (PEA) of the project, wrote analyst Taylor Combaluzier of Red Cloud Securities.
The company sunk 198 drill holes for a total of 125,208 meters between 2020 and 2022. The updated MRE encompasses the Victor, DPB, Bermuda, and Northwest step-out areas, Blackrock said.
"Over 160 years since Nevada earned its moniker as the 'Silver State,' and nearly a century since commercial production shutdown, most had assumed the history books had long since closed on this once-renowned district," Pollard said. "This resource marks a pivotal step toward the resurgence of this illustrious mining camp, proving that the final chapters of the queen of the silver camps are yet to be written."
A technical report on the updated MRE was being prepared in accordance with National Instrument 43-101 and would be available within 45 days, the company said.
Potential for Expansion
The updated MRE could form the basis for a future Preliminary Economic Assessment (PEA) of the project, wrote analyst Taylor Combaluzier of Red Cloud Securities in an updated research note on October 11.
"Now more than ever, we believe Tonopah West makes BRC an attractive takeout candidate, given its large, high-grade resource in a world-class mining jurisdiction," wrote Combaluzier, who rated BRC a Buy with a price target of CA$1.60.
There is also "significant future expansion potential" at the site, he noted.
"The mineralized system at the NW step-out area remains open along strike and at depth, boding well for future expansion drilling," he wrote. "Additionally, infill drilling could favorably affect the grade here, as the holes are more widely spaced than in the Victor and DPB areas. Future drill programs are planned based on the updated geological model."
More Silver Mines Needed
Silver is nature's most conductive element, which is why it is used to coat electrical contacts in computers, phones, cars, and appliances — not just for jewelry. It's also an important element in solar technology.
"Silver is not only a precious metal, but also an industrial metal," Sankar Sharma, chief executive officer of Risk Reward Return, told CBS News. "Silver is used in medical applications, solar panels, batteries, nuclear reactors, semiconductors, touch screens, and more."
The World Silver Survey 2023, published by the Silver Institute, said there was a 237.7 Moz deficit between supply and demand for the precious metal in 2022. This deficit was expected to be repeated in 2023, the institute said.
"Mined output over the longer term, four to five years out, is forecast to begin to decline," the report said. "This will be due to losses from grade decline and reserve depletion at existing operations exceeding the new production that is expected to come online from the current project pipeline."
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Newsletter writer Rick Mills of Ahead of the Herd has noted that "to satisfy future demands, it's clear that more silver mines must be developed to reverse this trend. The focus has to be on promising silver explorers and mine developers that could contribute to the future supply chain."
Ownership and Share Structure
Blackrock Silver is headquartered in Vancouver, British Columbia. About 59% of the company is held by institutional and high-net-worth investors, 4% is owned by management and insiders, and 37% is retail, the company said.
According to Reuters, Sprott Asset Management LP owns 2.55%, the CEO Pollard owns 2.56%, Mirae Asset Global Investments (US) owns 2.22%, Executive Chairman William Carl Howald owns 0.58%, and Konwave HG owns 0.32%. The company said other shareholders include First Majestic Silver, the Global X Silver Miners Index (SIL ETF), and Gold 2000.
Its market cap is CA$52.96 million, with more than 192 million shares outstanding. It trades in a 52-week range of CA$0.60 and CA$0.245.
- Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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