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Australian based silver miners in the box seat, the TSX boys just don't see it yet!, page-18

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DonaldFrump

3,124 Posts.

546

15/04/24

13:40

Post #: 73349668
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Originally posted by Verily1: ↑

Based on my own risk/reward profileI look at it this way.

- Experience tells me toreduce sovereign riskas much as possible, so I prefer Australian based resources.
- Because thegold to silver ratio is way out of whack- it is 90:1 now when historically it has been less than 20:1. Thisgives silver more upside potential than gold.
- I preferdevelopers over explorers and producersbecause I am looking for a transformation in wealth and the developers provide a better, albeit higher risk than producers, chance of this.
-Developers are so undervalued by any measure it is not necessary to take more risk by investing in explorers.
-There are very few Australian Listed Developers with resources in Australia. This narrows this down a lot.
If you see my chart below you will see the size of resource and the comparable entry prices. I will make some basic comments on each and then you should go to the company websites and look at their project/s. Depending on what you prefer the Latest Investor presentations are a good place to start.

Right now what I would say is that, the silver sector is so undervalued (gold too) that while pricing is important, what is more important is that your portfolio has a decent allocation to this sector.Most people do not, most have a pitiful allocation and they will suffer the consequences for this.

The Australian resourced Developers on the ASX are -

-The lowest entry price is Maronan Metals (MMA) at 40c ounce Ag and 13c ounce Ag Eq. It is a silver/lead developer in Qld and has a large deposit that has been drilled for shallow expansion successfully and awaiting an updated MRE and financial study.Near Cannington and in a rich silver base metal mining area. Has Gold and Copper below too.
- The next lowest entry price is BML Boab Metals a Silver/lead/zinc developer is the most advanced of the developers and on target to be the first to mining.It is the most de-risked. At 46c ounce Ag and 13c ounce Ag Eq. Has excellent exploration potential and has recently had a major exploration success in potentially discovery of the source of their mining deposits - in a deep zone of Zinc and Lead and silver.The mining studies show excellent economics with lead covering all the mining costs (capex and opex) and the SILVERIS MINED FOR FREE.
- Then the old market favourite Argent Resources (ARD).It is Silver/Zinc. It is small and a fair way off from mining. You pay based on today's commodities and share prices - 50c per ounce of Ag (Silver) in the ground and 25c for Ag Eq (Silver Equivalent - all metal resources expressed in Silver ounces). All my numbers are based on AUD and all resources in the ground without and distinction of quality.
-RDM owns 52.5% of Maronanand other projects including what appears to be a massive, low cost REE project Sybella near Mt Isa.Entry into RDM appears expensive but maybe not when the potential value of the additional projects is considered.
- IVR Investigator Resource is an old market favourite. It has other projects too. It is the most expensiverelative to ARD, MMA, and BML, by at least 3X.
-MKR (Manuka resources) owns resources in NSW and has existing infrastructure enabling it to generate income from tailings.It has debt that is expensive and of concern to some. So study carefully. It is cheaper if you factor in their estimate of the replacement value of the mine infrastructure they acquired for very little.
-SVL Silver Mines Limited, it has a big deposit in NSW with some lead. It is one of only two companies on this list that have SILVER RESERVES - the highest quality of resource certainty, the other is BML (BOAB Metals). Silver Mines is an expensive entry point IMHO but it will benefit initially from higher institutional interest as it has the largest market cap and is also part of one of the Gold index funds - either GDX or GDXJ. It also has a great name and long history of fans. But it is more than 3X the entry price of MMA and BML.
- ADT and KCN are there for comparative purposes, but as their resources are in Croatia, Chile and Thailand, I am not interested. Others may think differently. They are both more advanced than an of the above developers - hence more expensive entry points.

There are other development opportunities in Australia such as Metalicity MCT who owns Admiral Bay in WA.It is a sleeper with potentially the largest deposit of silver - albeit over a very large area. It has been set up for a sale or separate listing, but too many legal issues with other projects seem to be a distraction for MCT.

Let me know if you find any other ASX listed developers with resources defined in an MRE and where those are located in Australia. By way of disclosure I hold BML, RDM and MMA and prefer them in that order. Others have different risk return profiles so holdings may differ.

This bears repeating IMHO -Right now the silver mining sector is so undervalued (gold mining too) that while pricing is important,what is more important is that your portfolio has a decent allocation to this sector.

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have you owned MKR? I have.....Garbage management. Went chasing an off reef pipe-dream Vanadium project when they messed up the silver operation. No one should touch them with a ten foot pole.
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0 Great analysis

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