Silver Bullet Mines is an unusual company. It’s run by some people who have been around the block quite a few times and are executing their plan differently to the usual mining timeline from early stage exploration, endless raising of capital to go through PEA, Pre-Feasibility and Feasibility study.
But first, let’s take a look at silver in general as an investment opportunity. Here’s a quick chart of silver for the last year:
Not exactly exciting, right? Where one man sees boredom, another woman sees an opportunity. Silver, along with gold has not been going anywhere this year. And prices across the board are reflecting this.
However, silver companies are hard to come by, so when you do find one, they have historically been expensive. This is in part due to the fact that a lot of the silver produced around the globe comes as a by-product of other minerals such as gold.
Surprisingly, the expensive price tag is an exception with Silver Bullet Mines Corp. Their current market cap is around 15m CAD, which is modest for an explorer. However, this little company is actually a developer.
But why is it so heavily discounted? Silver Bullet is actually going straight into production for one of their assets, Buckeye, even though it doesn’t have a proven NI 43-101 compliant resource.
The reason for this is they are going for a business model that relies on historical reports and findings, which is giving them the confidence to go straight to small-scale production which will, if the plan pans out, finance the exploration and development of the rest of the company’s assets.
This is obviously high risk, and there are some horror stories but management has raised financing and reached into their own pockets to make this happen. To date, more than 1.5m of the financing for their flagship Buckeye project has been subscribed by management. This to me is a good sign of skin in the game. Speaking of management, the board certainly present themselves as people with production experience, with a worthy mention of J. Birks Bovaird, chair of US uranium producer Energy Fuels. It’s not a fail-proof way of vetting company management, but I like to see people with relevant producer and development experience on the board. A good board goes a long way. It shows they’re probably not just fooling around.
They have published a very ambitious and clear roadmap that sees the Buckeye property coming into production, then re-starting the Washington Mine in Idaho. Next one in line is the McMorran Mine pending permitting and more drilling, then finally exploring copper porphyry assets in Arizona.
The ability to execute this plan could make or break the team and I’m very intrigued to find out if they are going to pull it off.
– Fabi Lara