Andrew Pollard, President and CEO of Blackrock Silver (TSX.V:BRC – OTCQX:BKRRF), joins me to review the first batch of high-grade silver and gold intercepts returned from this year’s 20,000 meter drill program on the 100% controlled Tonopah West Project, located along one of the largest historic silver districts in North America on the Walker Lane trend in Nevada.
Highlights from this first batch of drill results:
- TXC24-087 returned 2.59 metres of 3,744 grams per tonne (g/t) silver equivalent (AgEq) (1,920.93 g/t silver (Ag) and 20.26 g/t gold (Au)), including 1.07 metres of 8,514.5 g/t AgEq (4,328 g/t Ag and 46.5 g/t Au)
- TXC24-101 returned 1.28 metres of 1,286 g/t AgEq (687 g/t Ag and 6.56 g/t Au)
- TXC24-092 returned 3.35 metres of 952.6 g/t AgEq (470.56 g/t Ag and 5.35 g/t Au), in addition to 1.13 metres of 1,156 g/t AgEq (534 g/t Ag and 6.9 g/t Au)
- TXC24-100 returned 2.26 metres of 898 g/t AgEq (530.30 g/t Ag and 4.08 g/t Au), including 0.92 metres of 1,587.1 g/t AgEq (943 g/t Ag and 7.15 g/t Au)
Andrew discussed how the goals of this drill program are to improve confidence in the continuity of mineralization in the deposit and connect orphaned areas of mineralization, but also to increase the resources and anticipated mine life of 8.6 million annual production that was first outlined in the Preliminary Economic Assessment (PEA). In that initial PEA at the base case gold price of $1,900 per ounce and silver price of $23 per ounce, the Project commands an after-tax net present value (“NPV”) discounted at 5% of $326-million on a low initial capex of $178-million (including $22-million contingency) with a payback of 2.3 years and an after-tax internal rate of return (“IRR”) of 39.2%, and an All-in Sustaining Costs (“AISC”) of $11.96 per silver equivalent ounce basis.
We also discussed the sensitivity to higher metals prices where at a gold price of $2,280 per ounce and a silver price of $27.60 per ounce (base case +20%), the economic profile of the Project escalates to an after-tax NPV 5% of $495-million and an after-tax IRR of 54.0%. If we consider current spot precious metals prices the project economics are even more robust, and this is in a safe jurisdiction, with only precious metals exposure; so I ask Andrew to postulate on why they are not seeing a rerating to a larger market cap and better valuation metrics more in line with peer silver development companies.
In addition to the expansion of resources through drilling in this year’s exploration program, we also review the various project derisking that their team is doing in the background like metallurgical testing and process flowsheet, hydrology studies, environmental studies, permitting, site infrastructure and the potential placement of a decline and processing mill, that will all feed into the updated PEA next year. The Company just raised $10Million in May, bringing in a larger stakeholding from Eric Sprott, and so it is cashed up to continue working on this large drill program and future derisking work.
If you have any follow up questions for Andrew regarding Blackrock Silver, then please email us at Fleck@kereport.com or Shad@kereport.com.
- For full disclosure, Shad is shareholder of Blackrock Silver at the time of this recording.
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