In an updated research note on October 28, Red Cloud Analyst Taylor Combaluzier discussed the news from Blackrock Silver Corp. (BRC:TSX.V; BKRRF:OTCQX) of its initial assay results from the eastern expansion drill program at its fully owned Tonopah West project in Nevada.
"We view these results positively as they returned higher-grades and broad zones of shallow Ag-Au intercepts potentially extending up to 1,200 meters along trend from the DPB South resource shell," Combaluzier wrote. "We expect these results to favorably feed into an updated MRE due in Q1/26. We continue to believe that Blackrock is a prime takeout candidate given its large, high-grade resource in a world-class mining jurisdiction. We view Tonopah West as one of the best junior-owned primary silver projects at the moment. Blackrock Silver is one of our silver top picks."
Combaluzier maintained the firm's Buy rating of the stock with a target price of CA$1.70 per share, a return of 183% at the time of writing.
Highlights of Results
According to Combaluzier, the results showed mineralized extensions up to 1.2k kilometers along trend.
Some highlights included 193.3 grams per tonne silver equivalent (g/t AgEq) over 8.75 meters, including 1,217.8 g/t over 0.82 meters; 263.4 g/t AgEq over 5.67 meters, including 955.9 g/t over 1.1 meters; and 750.3 g/t AgEq over 5.03 meters, including 1,660.6 g/t over 1.83 meters (using a cut-off grade of 150 g/t AuEq), the analysted noted.
The thick mineralized intervals, which demonstrate the potential of the Eastern Expansion Zone, were estimated at 75-85% of the drilled intervals. Assays for 13 drill holes (11 Eastern Expansion holes and 2 DPB South holes) are still pending, Combaluzier said.
These assays follow up on a scout drilling program that previously encountered highlights of 23.47 g/t gold (Au) and 2,223 g/t Ag (4,335 g/t AgEq) over 0.31 meters, he wrote. This earlier drilling began to extend mineralization towards the isolated NW Step Out deposit, suggesting it could integrate those ounces into an updated MRE for Tonopah West by connecting the two zones.
Potential Resource Increase
Extensions of mineralization through the eastern boundary of Tonopah West could add to tonnage in a future resource update, the analyst said.
The September 2025 Mineral Resource Estimate (MRE) outlined approximately 108 million ounces (Moz) at ~519.2 g/t AgEq using US$27/oz Ag, US$2,700/oz Au, and a cut-off of 180 g/t AgEq, the analyst wrote. About 80% of resources are in the inferred category, while ~20% are in the indicated category. The updated MRE included 83 additional drill holes (33,248 meters) drilled between 2024 and 2025.
"We are expecting another updated MRE in Q1/26 that is planned to include NW expansion drilling and eastern expansion drilling," Combaluzier noted. "This expanded resource is anticipated to form the basis for an updated PEA in Q1/26 as well."
Valuation
Red Cloud's Buy rating and target price of CA$1.70 per share is largely based on a Discounted Cash Flow (DCF) model for Tonopah West to determine a post-financing NAVPS5% of CA$3.26 (unchanged), upon which the firm applied a 0.50x multiple.
Some upcoming catalysts for the stock include the ongoing drilling at Tonopah West and an updated Tonopah West MRE and PEA in Q1 2026, Combaluzier said.
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