Interview with Glenn Jessome, President & CEO of Silver Tiger Metals Inc.
Our previous interview: https://www.cruxinvestor.com/posts/silver-tiger-metals-tsxvslvr-positions-for-growth-as-mexicos-mining-sector-rebounds-6049
Recording date: 1st November 2024
Silver Tiger Metals (TSXV:SLVR) is poised to become a significant silver producer following the release of a robust Pre-Feasibility Study (PFS) on its flagship El Tigre project in Sonora, Mexico. The study outlines a technically simple and economically attractive open pit operation capable of producing over 5 million ounces of silver per year at industry-low costs.
At a base case silver price of $21.50/oz and gold price of $1,750/oz, the El Tigre PFS generates an after-tax NPV (5% discount) of $222 million and IRR of 40%. The project benefits from low initial capex of just $86 million and a rapid payback period of 2 years. Life-of-mine all-in sustaining costs are estimated at $12.14/oz silver, placing El Tigre in the lowest quartile of the industry cost curve.
Importantly, the PFS only considers open pit mining of the El Tigre deposit. The company sees significant potential to expand resources and production through underground development of the historic El Tigre mine, where drilling has intercepted bonanza-grade silver mineralization over wide widths. A Preliminary Economic Assessment (PEA) on the integrated open pit and underground operation is targeted for H1 2025.
Permitting is well advanced, with amendments submitted to convert the existing underground mining permit to include open pit operations. Silver Tiger expects to receive approval in the first half of 2025, allowing for a 12-month construction period and first production in mid-2026. The initial phase of mining will focus on the highly profitable "starter pit", which boasts a grade of 0.6 g/t AuEq and ultra-low strip ratio of 0.3:1.
The PFS envisions a 10-year mine life for the open pit, generating average annual production of 5.0 million ounces of silver and 43,000 ounces of gold. At spot prices (~$25/oz Ag, $1,950/oz Au), the project is expected to spin off over $500 million in after-tax free cash flow. This would be sufficient to fully fund the underground mine development, with potential to boost production to more than 8 million silver equivalent ounces per year.
CEO Glenn Jessome highlighted the transformational impact of the PFS in a recent interview, stating: "You show me a project on this planet where we're going to spend 86 million...and you make a half more than half a billion dollars over a decade after tax free cash flow."
With a market cap of just C$150 million, Silver Tiger is attractively valued relative to the NPV and free cash flow generated by the El Tigre project. As the company advances through permitting and towards a construction decision, there is potential for significant re-rating. The stock also serves as a compelling acquisition target for larger silver producers seeking to bolster their project pipelines.
In conclusion, Silver Tiger Metals offers investors exposure to a high-quality silver development project with robust economics, a clear path to production, and significant exploration upside. As silver prices continue to rise on the back of strong industrial demand and investor interest, the company is well positioned to unlock value for shareholders. The positive PFS is a major milestone and should serve as a catalyst for the stock as Silver Tiger transitions from explorer to developer to producer in the coming years.
View Silver Tiger Metals' company profile: https://www.cruxinvestor.com/companies/silver-tiger-metals
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What is Company Interviews?
An insight into junior mining and opportunities to invest.
Company Interviews, a Crux Investor show, exists to cut through the jargon, bias and bluster.
Matthew Gordon, and guest host Merlin Marr-Johnson hone in on the important factors that indicate a company's strong footing for growth and success.