Report Highlights
- We are resuming coverage on Silver X. The company owns the Nueva Recuperada project in Peru, which features an active silver-polymetallic mine. Nueva Recuperada is comprised of the producing Tangana mine, the advanced-stage Plata mining unit, and four exploration projects.
- Earlier this week, the company released an updated resource estimate of 208 Moz AgEq (silver equivalent) across the Tangana Mining Unit (TMU), and the Plata Mining Unit (PMU), reflecting a 40% increase from the previous estimate completed in 2022. The TMU comprises 70% of the total estimate.
- A 2023 Preliminary Economic Assessment (PEA) on the TMU returned promising economics, with an After Tax-NPV10% of $175M, and a high AT-IRR of 39%, using $23/oz silver vs the current spot price of $31/oz. AGX is trading at just 21% of its AT-NPV.
- The company commenced commercial production in January 2023. In 2024 (9M), the mine produced 0.8 Moz AgEq, up 34% YoY. Management aims to reach annual production of 6 Moz by 2028 ($186M in revenue based on the current spot price).
- In 2024 (9M), revenue was up 41% YoY, EBITDA turned positive, and net loss was down 16% YoY, driven by higher production and metal prices, and lower cash costs. Management plans to begin production at the PMU in 2026.
- We believe there is significant resource expansion potential, with multiple veins not yet included in the current resource.
- AGX is trading at just $0.30/oz vs the junior silver producers’ average of $1.50/oz, an 80% discount.
- The mining industry has seen increased M&A activity in recent months due to record commodity prices.
- M&A activity to remain robust this year as larger miners expand their portfolios through strategic acquisitions.
*This report and research coverage is paid for and commissioned by Silver X Mining Corp. – See the bottom of this report for other important disclosures rating, and risk definitions. All figures in C$ unless otherwise specified.
