Is this Canadian Silver Corp Sitting on the Last Great American Gold Mine?
May 1, 2023 (Investorideas.com Newswire) Gold production has been declining since 2019, when the BBC announced that 'peak gold' had likely been reached. However, an upstart Canadian firm remains confident that it's secured the last great easy-to-access gold reserve in the United States.
Arizona Silver Exploration Inc. (AZS:TSX; AZASF:OTC) is engaged in junior mining exploration primarily in the Western United States, focusing on exploring gold-silver properties in western Arizona and Nevada.
Its projects include the Philadelphia property, the Silverton Gold project, the Ramsey Silver project, and the Sycamore Canyon project. The Philadelphia property is located in Mohave County, Arizona, and comprises approximately 2,400 claims. The Ramsey Silver Project and the Sycamore Canyon Project are also located in Arizona.
The Silverton project is a Carlin-type gold exploration property in Nye County, Nevada, with approximately 77 unpatented lode mining claims covering some 1540 acres.
The Catalyst: America's Last Great Gold Mine?
"The Philadelphia Property is one of the few gold systems remaining in the Western U.S.A. that has never been evaluated using modern exploration concepts," explains Greg Hahn, Arizona Silver's VP of Exploration.
"Our recent discoveries using the model of 'Boiling Zones' resulted in an immediate discovery. Discovering the bulk tonnage target answered my question as to why we see such a remarkable alteration feature at surface. All this project needs is drilling to demonstrate its real potential."
CEO Mike Stark explained that "We are in the process of drilling out one of the most exciting new gold discoveries in Arizona and anticipate having a large gold-silver resource defined in 2023 - 2024."
On April 25, the company announced that it had commenced core drilling to test the western edge of the Red Hill CSAMT geophysical anomaly.
Hahn said they "look forward to testing the down dip extension of the HW Vein below the last drill intercept in hole PC22-91, the interpreted feeder zone to the Red Hill CSAMT anomaly, and the western edge of the anomaly itself with two core holes."
Details of the uncut drill length intercepts of PC22-91 were as follows:
- High-grade vein interval: 176.59-178.96 metres, 2.38m, 6.71 gpt gold, 22.6 gpt silver
- Total Mineralized Zone: 173.5-252.1m (end of hole): 78.7m, 0.964 gpt gold, 9.20 gpt silver.
Why This Sector? Plateauing Production
If the sources cited by the BBC turn out to be correct, and global gold production has passed its peak, remaining sources of easily-accessible, in-ground ore are poised to become very valuable fairly quickly.
Gold ended 2022 at US$1,825 per ounce, with many analysts forecasting considerable price growth in a roundup piece published by GoldSilver.com.
Ole Hansen of Denmark's Saxo Bank predicted that "In general, we are looking for a price friendly 2023, supported by recession and stock market valuation risks - an eventual peak in central bank rates combined with the prospect of a weaker dollar and inflation not returning to the expected sub-3% level by year-end - all adding support. The gold price will be higher once markets realize global inflation will remain hot despite monetary tightening."
As Juerg Kiener of Swiss Asia Capital points out, "Gold is also the only asset which every central bank owns."
Of course, gold isn't the only metal Arizona Silver is poised to pull out of the ground. As the company's name implies, where there's gold, there's silver, and analysts are equally bullish about the white metal.
Speaking to CNBC, Janie Simpson, managing director at ABC Bullion, pointed out that "Silver has historically delivered gains of close to 20% per annum in years inflation is high. Given that track record and how cheap silver remains relative to gold, it wouldn't surprise to see silver head toward US$30 per ounce this year, though that will likely offer significant resistance."
Nicky Shiels, head of metals strategy at precious metals company MKS PAMP agreed with that assessment in the same report. "Silver is in a shortage," she explained, "and there is a notable drawdown in the available physical stocks held in New York and London's physical hubs, more so than seen in gold."
It's quite possible that, as with gold, silver production has peaked for good. As President of Wheaton Precious Metals, Randy Smallwood details, "We hit peak silver supply back about five, six years ago. Silver production on a worldwide basis has actually been dropping, and we're not seeing as much silver produced from the mines."
Why This Company? Untapped Reserves
While the market scrambles to find alternative sources of silver and gold, Arizona Silver appears to be sitting on a considerable swath of rich ore, almost ready to be mined.
"We've only looked at forty acres out of our 2,400-acre parcel," CEO Stark explained in a recent interview. "We're not even scratching the surface here."
In private communications with Streetwise Reports, he explained that the company has "one of the tightest share structures - not blown up - management has a big stake as well, never selling a share either."
The "company has an extremely low burn rate - money goes into the ground advancing the property for higher shareholder value. The Philadelphia Project is becoming larger with every single drill hole with 100% drill hole hits on all Patented ground drilling since 2021 at minable grades."
Why Now? Last Chance at Pre-Development Prices
As Clive Maund stated in an analysis published on April 16, Arizona Silver's stock has "done exactly what was expected in the last update . . . when we observed that it had just broken out of a Head-and-Shoulders bottom and was poised to accelerate to the upside - that it has done, gaining over 48% in less than a month. The purpose of this update is to point out that it is now extremely overbought and closing on a target at last year's high at CA$0.60." [OWNERSHIP_CHART-10692]
Ownership and Share Structure
Management and advisors hold over 28% of the company. According to Reuters, Advisor Brandy Stiles has 14.11% at 9.77 million shares. VP of Exploration Greg Hahn has 4.68%, with 3.24 million. President and CEO Mike Stark has 3.79%, with 2.62 million. CFO Dong H. Shim has 1.16%, with 0.80 million, and Director Eugene ("Gene") Spiering has 0.09%, with 0.06 million.
9.9% of Arizona Silver is held by institutions. Reuters notes that Wealth Management AG has 8.11% with 5.62 million shares, and Moloney Securities Asset Management LLC. has 0.01%, with 0.01 million.
Family and friends investors control roughly 41%.
The rest is held by retail investors.
The company's monthly burn rate is some CA$28,000, spent primarily on drilling.
Arizona Silver Exploration Inc. has a market cap of CA$33,500,000. The company has 69,201,075 shares outstanding, alongside 8,521,426 warrants and 5,487,250 options.
1) Owen Ferguson wrote this article for Streetwise Reports LLC as an independent contractor. They or members of their household own securities of the following companies mentioned in the article: None. They or members of their household are paid by the following companies mentioned in this article: None.
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