AbraSilver – More High-Grade Silver Drill Results And Positive Metallurgical Test Results From The JAC Zone
John Miniotis, President and CEO and David O’Connor, Chief Geologist of AbraSilver Resource Corp (TSX.V:ABRA – OTC:ABBRF), join us to review more recently returned high-grade silver drill intercepts and positive metallurgical test results from the JAC Zone at the Diablillos Project in Argentina.
On May 25th more exploration news was released where drill hole# DDH-23-024 intercepted 17 Meters at 829 g/t Ag & drill hole# DDH-23-025 intercepted 79 Metres at 238 g/t Ag. There were 6 drill holes released in total in this batch, which continue to intercept excellent widths and grades of silver at JAC in practically every single drill hole. Drilling at the JAC Zone continues to consistently intersect high-grade silver oxide mineralization, with associated gold in some areas, at shallow depths, as well as underlying copper and silver mineralization in sulphides. We discuss how this JAC Zone is really continuous over very wide intercepts, close to surface, and high-grade which is all setting up to be amenable and economic to open pit mine development, and likely would be on the front end of any mine plan.
Next we discussed the news out June 1st that reported positive preliminary metallurgical test results for the new JAC zone and Fantasma deposit, with overall recoveries ranging between 86% – 93% for silver and 82% – 91% for gold. A substantial percentage of the silver at JAC can be recovered by gravity separation on the front end, which increases overall recoveries. Current testwork confirms that the same process flowsheet can be used to process mineralization from the Oculto, JAC and Fantasma deposits.
John outlines why the exploration team is so encouraged by the continued success of the Phase 3 drill program, with 20,000 meters and 85 holes drilled to date, but plans to drill an additional 15 holes to take it up near 100 holes that will feed into an upcoming maiden resource estimate on the JAC Zone targeted for September. Thus far only 52 holes have been released to the market, with roughly half of the holes from Phase 3 still to be reported in the months to come. There is also ongoing work incorporating other metallurgical data, environmental and permitting work, and other project derisking going on into a Preliminary Feasibility Study on the overall Diablillos Project encompassing both the Oculto and JAC depostis by year end.
If you have any follow up questions for John regarding at AbraSilver, then please email me at Shad@kereport.com.
- In full disclosure, Shad is a shareholder of AbraSilver
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Click here to visit the AbraSilver website and read over the most recent news releases.
They also have a lot of shares, if they did a reverse split of one for ten they would still have over 52 million shares and the stock price would be around $3.15, pretty hefty for a developer. A reverse split will be baked into the cake at some point. DT
Right, I don’t like that either.
I don’t like a lot shares or reverse splits. Every reverse split I have seen turns out to attract investors that sell the news or fill gaps … shorts in other words. End up taking price where it was before the split. Kind of like pricing warrants below market.
Yes, there are a lot of shares out for Minera Alamos, but I’ve seen Aussie stocks with Billions of shares out still become multi-baggers to the upside. The market cap will reflect the balance of share price to shares outstanding, so that is a far more important metric for peer-to-peer comparisons.
The larger share count is largely due to the prior management teams decisions, prior to John and Dave taking over the reigns about 2.5 years ago, but every pre-revenue advanced explorer/developer needs to keep raising and diluting so it is the nature of the beast. The question always must be – Is the latest capital deployed truly building value? Again, I’m far more interested in this question of value creation being answered, versus dithering over the share-count, especially if something truly unique is unfolding.
Sure, at one point they may need to roll the shares back, but I’d prefer to see that for the reasons of attracting more funds or getting index inclusion, rather than pandering to the peanut gallery.
What I personally like about the work that AbraSilver has done under John and Dave’s guidance over the last 2.5 years, is they have greatly expanded the primary resources at the Oculto deposit, and removed the legacy concerns about their being too high of a strip ratio, while also locking into a totally new and very robust new deposit that is a game-changer for the company.
This new JAC Zone is that game changer, and yet it is flying under the radar as most casual retail window shoppers or even older geos that may have done site visits many years ago, still have in their minds the AbraSilver of 3-5 years ago, or even 2 years ago…. but have not been keeping up to speed with how much things are changing for the Diablillos Project overall. This is precisely why I started the interview with John the way I did to bring the marketplace up to speed on all the work that has been transforming the company.
The market has not really fully woken up to just how significant this steady series of very large intercept silver/gold drill hits is, or fully appreciated the number of truly bonanza grade results showing that JAC has continuity and the high grades near surface. JAC is going to be the new starter pit, and has moved to the front of the batting order ahead of Oculto now, and most people don’t have a clue this has happened since the end of last year. Additionally, if the other satellite deposits and geomagnetic anomalies of Fantasma and Alapaca end up being of similar mineralogy to the JAC Zone then it could really get interesting, and it would change the game entirely on this project.
What animates me most as an investor, is looking for unrealized opportunities, that the market has not picked up on yet. I’ve made more money getting in early (sometimes too early) to a company with some new value driver or going through a turn around before it is more obvious to the masses, rather than chasing the latest cult stock that everyone is piling into as the flavor of the day.
There is not right or wrong way to invest, of course, but often as people get super bullish on a trending drill-play, they pile into where the market cap gets to ridiculous levels into a blow-off top, right before that stock makes a round trip right back down the other side of the parabola as gravity and reality set in. Then people go from celebrating the management of those companies as rock stars and the project as the next “Fosterville” or “Las Chispas”, to bemoaning the management teams as crooks, for being deceived by the project which is now back to just a run-of-the-mill project, or worse… moose pasture.
During those big runs up or swan dives down, it really comes down to sentiment, momentum, confidence, and ultimately, if the project is legitimately an economically viable future mine. That is what is most important (much more so than how many shares outstanding there are – granted a tighter share structure is preferred when possible). In the case of AbraSilver, they’ve already proved they have an economically viable project with just the Oculto deposit, but after they release the next 50 drill holes from the new JAC Zone (providing they are similar to the prior 50 drill holes just released over the last 9 months or so), and then after they put out their resource on JAC and finally the new combined Pre Feasibility Study on both deposits together later in the year… THEN… I’d anticipate analysts and investors that do serious due diligence to come away eyebrows raised and impressed.
Honestly, it is shocking to me the disconnect in their consistently eye-popping newsflow and very muted shareprice action since the end of last year when JAC Results started hitting the market as some of the best intercepts put out by any exploration company. My thesis is that after the resource estimate and PFS are released that a large re-rating is in order, but again, I’m biased as a current shareholder that gets to talk to management every few weeks and has had the good fortune of having them explain to me just how significant JAC is to the future of this project.
That seems to be system in AUS, with high share count and low share price.
Back in North America, MUX was an exception with a reverse split and then going higher.
Yeah, I was thinking about the Aussie producer Perseus that has 1.3 Billion shares as and example, where it’s gone up 2-3x a few times over the last decade.
As for share rollbacks, yes we saw that with MUX with USAS and more recently with Mako Mining (which I cover with Akiba in an interview we are releasing on Monday). All 3 companies were able to garner more institutional and fund inclusion via the tighter share-count and so that is a valid reason behind a producer rolling back shares. Also a few have done it to be able to qualify for a big-board listing on the TSX or NYSE, so that is also another solid reason to do. Integra just did a rollback after merging with Millennial PMs, to attract larger funds and institutions, so that kind of a reverse-split is more value accretive for the longer term.
A lot of investors feel much richer if they own 50,000 shares at 5 cents instead of 500 shares at $5.00. These stocks more often than not attract a casino mentality rather than a value buyer. DT
I wish they would use more drills. Really interesting developments. They must have a lot of silver