Silver Tiger Metals (TSXV: SLVR; WKN: A2P4YL) has presented new economic indicators for its 100% controlled El Tigre silver-gold project in the Mexican state of Sonora. The Canadian company reports on two key components: a Preliminary Economic Assessment (PEA) for underground mining in several high-grade zones and an updated Pre-Feasibility Study (PFS) for the Stockwork Zone, which is to be mined by surface mining methods.
Both studies are based on joint “consensus” price assumptions of US$38 per ounce of silver and US$3,200 per ounce of gold and are intended to provide an updated basis for further project planning. The assumptions in the base case scenario are therefore very conservative, given that the price of silver is currently over $94 and the price of gold is more than $4,700 per ounce…
Essentially, the aim is to map the economic viability of two potentially independent development strands: on the one hand, an underground operation based on the higher-grade areas of the vein zones, which also incorporates historical material such as tailings and overburden into the process. On the other hand, an surface mining and heap leach scenario in the Stockwork Zone, which has already been the subject of previous studies and has now been recalculated with adjusted parameters. Silver Tiger Metals emphasizes that the underground approach is designed as a “bolt-on,” meaning that it can be implemented in principle as a supplement to or independently of the Stockwork development.
Underground PEA: Focus on high-grade zones and historical residues
The new PEA for underground mining focuses on the El Tigre, Sulphide, Black Shale, and Seitz Kelly zones. The underlying mine plan envisages a production phase of around 17 years, but a total project duration of around 18 years is described, as historical tailings are to be processed for several years after the actual underground mining. In the start-up phase, the processing of historical stockpile material with low grades is also planned before underground production is ramped up.
The underground scenario shows a net present value (NPV) of US$304 million at a 5% discount rate, an after-tax IRR of 42.8% and a payback period of 2.6 years. The PEA specifies 15 years of underground mining, supplemented by three years of tailings processing, and cumulative production of 38 million ounces of payable silver equivalent (AgEq) and 453,000 ounces of gold equivalent (AuEq). According to the study, these equivalent figures include 34 million ounces of silver and 130,000 ounces of gold.
The initial investment costs are estimated at US$83.5 million, which also includes estimated reserves (“contingency”). In addition, there will be ongoing investments (“sustaining capital”) of approximately US$213.6 million over the term. On the cost side, Silver Tiger Metals cites average operating cash costs of US$16.05 per AgEq ounce and all-in sustaining costs (AISC) of US$23.98 per AgEq ounce; alternatively.
Updated PFS for the Stockwork Zone: surface mining and heap leach in focus
In parallel, Silver Tiger Metals is presenting an updated PFS for the Stockwork Zone. The scenario is described as surface mining with heap leach processing and covers a ten-year life: one year of pre-production and nine years of production. For this model, the company reports an after-tax NPV of US$456 million (5% discount rate), an after-tax IRR of 65.7% and a payback period of 1.4 years. The PFS cites planned recoveries of 43 million payable AgEq ounces and 509,000 payable AuEq ounces over the life of the mine, which it says consist of approximately 9 million ounces of silver and 408,000 ounces of gold.
The initial investment is stated in the PFS as US$86.8 million, with additional expansion capital of US$20.1 million in year 3 and sustainable investments of US$6.2 million over the life of the project. The PFS cites average operating cash costs of US$11.7 per AgEq ounce and AISC of US$14.5 per AgEq ounce. The planned production rhythm distinguishes between two phases: in years 1 to 3, the feed rate is expected to be 7,500 tons per day, with an increase to 15,000 tons per day planned from year 4 onwards. The process route includes conventional three-stage crushing to a defined grain size, stockpiling on a sealed heap area, and metal recovery using the Merrill-Crowe process to produce gold and silver doré.
In the updated PFS, Silver Tiger Metals reports mineral reserves of 40.3 million tons with an average grade of 0.40 g/t gold and 14.9 g/t silver for the Stockwork Zone. Approximately 60% of the reserve is classified as “proven” based on a Phase 1 starter pit. The waste-to-ore ratio for the life cycle is stated as 1.7:1; according to the study, a total of 108.6 million tons of material movement is planned, of which 68.3 million tons is waste rock and 40.3 million tons is ore. Supply issues such as water and electricity are also outlined in the PFS text: water is to come from drainage wells, and the electricity connection is described as a line to the national grid.
Resource estimate, reserves, and exploration: Northern veins and Lluvia de Oro in focus
Both studies are based on an updated resource estimate as of June 20, 2025. Silver Tiger Metals describes changes from previous models, including adjusted cut-off grades, additional drilling for the underground area, extensive re-logging to increase geological certainty, and more selective modeling of high-grade veins. For the underground portion of the PEA mine plan, the company cites 5.0 million tonnes averaging 331.7 g/t AgEq (equivalent to 251.3 g/t silver and 0.91 g/t gold). A large portion of this volume – including historical tailings and waste rock – is classified as Measured and Indicated, according to the announcement.
Furthermore, Silver Tiger Metals makes it clear that the PEA for the Southern Veins does not include the Northern Veins. For the northern part of the project, reference is made to a historical district where additional resources and target areas have been defined, including an El Tigre North segment approximately 700 meters north of the core areas considered in the PEA and PFS. The company also describes exploration potential along strike and down dip in both the northern and southern vein systems. In addition, the Lluvia de Oro area is mentioned as another focus, whose vein system is said to lie in the same geological unit that is also described as hosting the Stockwork Zone.
Another point in the announcement concerns land and usage rights: Silver Tiger Metals states that it owns 100% of a 6,238-hectare land package that encompasses the planned operating footprint, royalty-free, and has 28,414 hectares of concessions for exploration work along a 25-kilometer-long trend. Overall, Silver Tiger Metals is positioning the combination of the underground PEA and updated PFS now presented as a basis for further refining the next planning steps for El Tigre – separately or jointly – from a technical and economic perspective.
Conclusion: With the updated pre-feasibility study for the stockwork zone and the PEA for underground mining, Silver Tiger provides a first, promising glimpse of the combined economics of the two parts of the El Tigre operation. And, most importantly, at current spot prices for silver and gold – rather than the conservative figures used for both studies –, the Stockwork Zone project alone generates a net present value of approximately $950 million after taxes, while a net present value of approximately $1.2 billion after taxes (at a 5% discount rate) is realistic for the underground portion of the project, as Silver Tiger CEO Glenn Jessome points out. According to Jessome, the stockwork zone project would generate approximately $1.3 billion in net cash flow after tax over the entire mine life, while the underground project would generate an additional $1.85 billion in net cash flow after tax over the entire mine life. In our opinion, these are exceptional figures and we are eager to see how the market digests the extensive information contained in Silver Tiger’s announcement.
