Source: Streetwise Reports
September 8, 2023 (Investorideas.com Newswire) This company is pivoting to a new silver project in Mexico. Officials have given conditional acceptance to the purchase.
Fabled Silver Gold Corp. (FCO:TSX.V; FBSGF:OTCQB; 7NQ:FSE) said it has received conditional acceptance of its agreement to acquire a silver project in Chihuahua, Mexico.
The company announced earlier this year it had entered a binding letter of intent with Kootenay Silver Inc. to buy the Mecatona property.
The move comes after Fabled terminated its option agreement for the Santa Maria project 7 kilometers to the southeast.
The TSX Venture Exchange has given conditional acceptance to the Mecatona purchase. Fabled is now working toward completing the final documentation and entering into a definite agreement with Kootenay.
"The company will provide a further update on the closing of the Proposed Transaction in due course," the company said in a release. "Closing of the Proposed Transaction is subject to the completion of final documents, final approval of the Exchange, and the completion of the Company's private placement, which was previously announced."
Fabled had announced a non-brokered private placement of up to CA$500,000 at CA$0.05 per unit to help the company pay for a Phase 1 exploration program at Mecatona and capital expenses. The company is also preparing a National Instrument 43-101 technical report on the property.
Each unit consists of one common share in the capital of the company and one common share purchase warrant of the company. Each warrant shall be exercisable to acquire one common share at a price of CA$0.10 per share for a period of 24 months from the closing date of the offering.
Closing of the placement is expected to be concurrent with, and conditional upon, the closing of the Mecatona transaction, Fabled Silver said.
The Catalyst: Virgin Territory With High Grades
The Mecatona project comprises 2,857 hectares in the Parral silver mining district south of the city of Parral in Chihuahua state. It has never been drilled.
The project covers a silver-dominant epithermal mineral system in veins and breccias. Kootenay traced one mineralized structure for 1.7 kilometers, which remains open along strike. Another anomalous area outline featured a northeast-trending zone outlined by stockworks and quartz veinlets within an 80-meter-wide argillic alteration zone.
In 2018, Kootenay took 78 channel and grab samples on the property and reported silver values ranging from trace to 735 grams per tonne silver (g/t Ag) and gold values ranging from trace to 6.94 g/t. The company also sampled up to 3.5% lead and 8% zinc, Fabled Silver said.
According to Stockhead, grades at silver mines averaged about 125 g/t in 2020. However, some projects can see higher, consistently higher grades, including more than 1,000 g/t.
In 2019, Kootenay discovered a previously unknown silver, copper, and gold zone hosted in pervasive skarn-altered lower Cretaceous turbidites of the Mezcalera group, Fabled Silver said.
In one 200-by-400-meter zone, silver, copper, gold, and anomalous cobalt mineralization is distributed uniformly. Fifty-one samples taken in that zone returned silver values averaging 110 g/t Ag to 486 g/t Ag.
Additionally, 12 of 51 samples graded more than 100 g/t Ag, with 86% returning more than 20 g/t Ag. The average copper result was 1.7%, with 30 samples returning more than 1%, the company said.
Fabled Silver Gold also has received permission from local landholders to work on the property. It has plans to start drilling by the end of the summer, President and Chief Executive Officer Peter Hawley said.
"What happens below surface can only enhance the property-wide potential," Hawley said.
Pivoting Projects
The company decided to pivot to the new project after a review process found it couldn't make the required payments under the Santa Maria option agreement.
Under the agreement with Kootenay, Fabled Silver will issue the vendor 2 million common shares on closing of the proposed transaction to acquire 100% of the property. It will also pay Kootenay US$10,000 twice a year. When commercial production starts, Fabled Silver will pay the greater of US$15,000 or a 2% net smelter royalty (NSR), each to be paid on a quarterly basis.
The 43-101 report will be based on previous exploration campaigns made by Kootenay and more than 400 samples Fabled Silver has taken on the property, which Fabled Silver believes has the potential to host high-grade vein-type silver deposits.
Precious Metal, Industrial Metal
Silver is nature's most conductive element, which is why it is used to coat electrical contacts in computers, phones, cars, and appliances - not just for jewelry. It's also an important element in solar technology.
"Silver is not only a precious metal, but also an industrial metal," Sankar Sharma, chief executive officer of Risk Reward Return, told CBS News. "Silver is used in medical applications, solar panels, batteries, nuclear reactors, semiconductors, touch screens, and more."
The World Silver Survey 2023, published by the Silver Institute, said there was a 237.7 million ounce (Moz) deficit between supply and demand for the precious metal in 2022. This deficit is likely to be repeated in 2023, the institute said.
"Mined output over the longer term, four to five years out, is forecast to begin to decline," the report said. "This will be due to losses from grade decline and reserve depletion at existing operations exceeding the new production that is expected to come online from the current project pipeline."
Ownership and Share Structure
Trading for Fabled Silver has been halted until the completion of the proposed transaction, the company said.
It last traded at CA$0.07 on February 21, the day the agreement was announced.
About 5% of the company is owned by management and insiders, including Director David Smalley with 2.63%, Hawley with 2.6%, and Director Luc Pelchat with 0.14%, according to Reuters.
The rest, about 95%, is retail, the company said.
Fabled Silver's market cap is about CA$3 million with about 43 million shares outstanding, about 41 million free-floating.
It trades in a 52-week range of CA$0.475 and CA$0.07.
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