It’s the perfect storm for emerging silver producer Silver Tiger (TSXV: SLVT; FRA: 1OC): the silver price is soaring and recently traded at over 36 USD per ounce; Mexico’s permitting policy for mining projects is easing under the new government, and even open pit mining will soon be possible again. Silver Tiger’s share price has mirrored the explosive rise in the silver chart since the company raised CAD 15 million in fresh cash from institutional investors in mid-April this year.
To a large extent, these are the same addresses from which a good portion of the more than 100 million CAD that the company has raised to date for its El Tigre project originated. Investors include well-known names such as Sprott, MacKenzie, Canada Life, US Global, Franklin Templeton, Merk, and Vaneck.
In October 2024, the company presented a pre-feasibility study for start-up production in the form of open-pit mining at its El Tigre project in the Mexican state of Sonoro. The study assumed a conservative base case scenario of USD 26 per ounce of silver and USD 2,500 per ounce of gold. Even at these prices, the open pit mine would pay for itself after just two years and generate (undiscounted) free cash flow after taxes of around USD 317 million over the modeled 10-year operating life. At current silver and gold prices, free cash flow would double – but even that would only be a prelude. The planned open pit project is primarily intended to serve as a door opener for the much larger and higher-grade underground project.
PEA for Underground Project Expected in First Half of 2025
Still in the first half of 2025, Silver Tiger aims to present a preliminary economic assessment (PEA) for the extensive underground component of its project, which was calculated at an additional 113 million ounces of silver equivalent in the most recent resource estimate. As an exploration target, the company has set a magnitude of 10 to 12 million tons with 225 to 265 g/t AgEq for 73 to 100 million ounces AgEq.
The underground potential of the project can be better assessed by looking back at the historical mining at the El Tigre Mine between 1903 and 1930. Around 100 years ago, a total of approximately 353,000 ounces of gold and 67.4 million ounces of silver were mined to a depth of 450 meters on 16 levels along a 1,600-meter strike. Historical average grades were 1.3 kilograms of silver and up to 7.54 grams of gold per ton. This made the historic El Tigre mine one of the mining projects with the highest silver-gold grades in the world. It speaks volumes about the potential that, according to Silver Tiger’s estimates, only around 30 percent of the project has been explored to date.
Silver Tiger Has Significantly Improved Infrastructure at the El Tigre Project
Silver Tiger acquired the 28,000-hectare El Tigre concession in 2016 and added a further 6,283 hectares in 2019, where most of the exploration has been carried out to date. In total, more than 150,000 meters have been drilled at El Tigre, of which Silver Tiger itself has contributed 119,000 drill meters. Silver Tiger has also made significant progress in terms of infrastructure.
A camp for 60 people has been built and a 46-kilometer road to the nearby village of Colonia Morelos has been constructed. In addition, the historic main portal of the mine has been widened to a diameter of 4 by 4.5 meters over a length of several hundred meters to improve the efficiency of future mining operations.
Conclusion: Silver Tiger is well on its way to becoming one of those “10-years-over-night success stories” because all the conditions are now coming together at once. CEO Glenn Jessome has managed to systematically advance the project against the fierce political headwinds of the left-populist President Obrador, who governed until recently. Only because he and his long-time partner Brad Langille (CEO of GoGold) have already realized four (silver) mines in Mexico could Silver Tiger repeatedly secure fresh capital in the market even under difficult conditions.
This perseverance is now paying off: with much better political conditions and a much higher silver/gold price, Silver Tiger is on the verge of submitting a PEA that should finally reveal the project’s full potential. Another catalyst for the stock in the near term could be the approval of the open pit mine. With Francisco Albelais as VP of Operations, Silver Tiger has one of the most experienced experts in the construction of large heap leach mines in Mexico. In addition, the company is in advanced discussions with lenders for the development of the mine. Once the green light is given, the starter open pit project will only need 18 months to reach production. This could make Silver Tiger the next silver mine to go into operation in Mexico. According to the plan, the development of underground mining would then be financed from cash flow. We are confident that Silver Tiger will be a hot topic in the silver market for some time to come.
