Silver Mines Limited

, it's with pleasure I introduce our next speaker, Speaker to provide an update on Silver Mines Limited. I introduced man director Joe Manswe. Thank you, Paul, thanks for the intro, thanks to everybody. here we go, we up, that's the. So the obligatory disclaimer if you want to read, I'll leave that to you for later, Just start with this side, we always do, I think it's important to sort of highlight what's happened over the last 12 months. I mean, I, I stood here last year. A month after having had our. Our development consent removed from us through a court of appeal decision., very important to point out that going through the going through the, the permitting process, for, for Bowden's, in, in New South Wales, we elected to go through a public hearing process, with the independent planning commission. The benefit of that is that by coming through that, it it completely extinguished all merits-based appeals. So for a very small group of activists that make a lot of noise, the only way they could really derail this or defer it was to look for a procedural error in the in the process, so they lodged a JR in early 2024, late 203, early 24, that was dismissed. By the Land and Environment Court and they appealed it, and, and, and to be honest, they, they threw a bit of a Hail Mary to use a North American NFL term, and no one really expected them to win the appeal and they did, on a judgment that a lot of people still believe that that the judge got wrong, however, we move on. It, it, it changed the face of, of planning and the planning protocols in New South Wales, particularly for large renewables energy projects or or state significant developments, which is anything above $30 million in New South Wales. Fortunately for us and for for for anybody trying to do anything in New South Wales of any major scale, the government realized that the, the, I guess that the authorities had been had been removed from the planning departments, they moved very quickly to update legislation. They changed legislation within 7 to 8 weeks. So where are we at since then? Well, we're just now following a pathway that is, is has been largely unknown by both us and the Department of Planning, and the IPC. We think we're very close now. We've provided the government with all of the information they've required. It's been reviewed by barristers and the time frame for us now, we expect in the next in a matter of a few weeks that the information that we've provided to the Department of Planning will be referred across to this independent planning commission. Once that's done, that will go up on the public planning portal, bit of a mouthful. So everyone will see that, and the statutory deadline or statutory timeline for the IPC is in 50 calendar days. So, I thought we'd have this permit back by July, We were wrong, but, but, but it was based on on on on a on a system that's completely out of our hands. so we're we're we're, we're very confident we will have this consent back by the end of the year. I like this chart, the share price chart, trading history chart, really because it just shows the value of having a consent. And when we lost that consent in August last year, our share price fell 50%. Historically, we've always had a very strong correlation to the silver price, and despite there being a few other names in the sector now, I still think we're we're the largest silver company on the ASX by market cap. We've regained that correlation with the silver price after after a bumpy 12 months. And our belief is that when we get this consent back, there's there's gonna be a a fairly nice bump for for for for investors and shareholders to, to reclaim that that value of the consent. In terms of cash, we reported $19 million at the end of June. We've subsequently raised $34 via replacement through our friends at Petra and a small SPP we're sat at around 46, 47. We've got about $10 million in options that are out there at the moment from a placement in December and very encouraging. We had the first of those exercised recently, so we see ourselves as very much funded through through the financial investment decision at this point. For those not familiar with the with the project itself in terms of location, look, it, it, it, it is a terrific location, for, for, for anywhere in the world, you know, we're 3.5 hours northwest of Sydney in New South Wales. it's, it's, we're in farming country, you know, the, the land we own, despite, the action group, despite their comments, it is, ours is very poor quality, agriculture, grade 3, grade 4 agricultural land, And we're very close to some very, very large mines. We're 40 km south of three of the largest open pit and underground coal mines in the world, and our nearest major town, Mudgee, which is, About 25 km to the west, population of around 13, 14,000, there is a significant amount of that population that drive north to those coal mines every day. So again, Very, very well supported by the community in general within this region, and you can see on the map there there's two small towns to the southeast Louis and Canos sorry Raston and Canos. We've got very, very strong support from that district. We've always talked about how how significant Bowden's is relative to the global silver space and and this this chart hopefully represents that. On the left hand side we look at it from a resource perspective, and no offense to some of our peers, but we, we only tend to look at MNI. We're we're not really sort of too concerned about large inferred resources at this point. We've got 164 million ounces of M&I and just silver, again, we're not looking at silver equivalent here. And it puts us about the 5th largest in the world, undeveloped, the chart on the right, looks at the reserves. And also the studies that are available for our peer group and, and also, you know, the flags of the location, which is quite interesting and a lot of the interest we get from from global investors is, you know, there's a dearth of silver projects out there, as you can see I mean there, there's literally 10 that are running through with reserves that are running through advanced stages of of study, But the appeal is that we're advanced, but we're also, we're, we're not in Latin America, we're not in China, or or Central America, and I, I'm not saying those locations are bad. We're told by our investors that, you know, we, we offer an appeal that we can provide. Incredible silver leverage through to production in a in a in a relatively safe country, if those guys want to get Mexican exposure or Peruvian exposure, they can go and buy it, but it's very hard to buy silver exposure without having exposure to those countries. Just on our optimization, I mean, we ran this in, or we, we released this in December last year, we, we're very happy with the numbers, we ran this at $29 silver and obviously since then, you know, silver has continued to run. just to give you a sense of, of leverage here, the MPV and payback periods, I mean, on, on, on this morning's silver price currency and and and and base metals prices, that MPV is is north of $1.1 billion., payback's 2.5 years and the, and the operator margin is, is, a smidge under 22 billion. what appeals here to a lot of people is we've got longevity and. I always, I always sort of point out that, you know, silver in Australia is a bit of an orphan commodity in that, you know, there, there hasn't been that many successful silver projects, and I always, well, I actually point out there's been two really. One was Broken Hill and the other's Cannington. Anything outside of that has either been too small, very high grade, and with, with limited, limited ability to. Fix, fix the project if you don't get it right in the first year, due to mine life. Well, we, we've got 17, 16.5 year mine life, internally, we believe that, that'll go beyond 20. Our resource to reserve conversion at the moment on the MNI is about 44%, so we think there's a lot more silver that's going to come into the mine plan here over time. We're not particularly focused on that yet. I mean this is all about getting this first stage development into production. And we've made some significant changes over the years to this project, and we've really tried to try to dumb it down for want of a better term, and I don't want to be flippant because there's there's no such thing as an easy mine development. However, what we've done here is we've taken the mining back to slightly larger gear, less people, which means it's day shift mining only. We're looking at 2 million tons per annum of of throughput. Had a strip ratio of 1.4 to 1 or just under 1.5 to 1. The 1st 5 years of waste haulage is downhill., on the processing side, originally we were looking at two streams of a two stream concentrate process, so a lead silver, and then the remnant zinc or zinc with remnant remnant silver. we were, well historically we were sort of optimizing this project on lead as opposed to silver, which didn't make a lot of sense. So we went to, went out to the market and talked about sort of, you know, what a, what a, if, if they would be interested in a bulk concentrate. And it turns out there's a lot of interest in bulk concentrate. So now we've we've dumbed down the processing to a single bulk concentrate flow. We'll produce about 25,000 tons of concentrate a year that will contain about 5 million ounces of silver, so it's 6 7000 g per ton, and with around about 20% lead and 20% zinc in as well. Essentially, over the last 15 years, every lead smelter in the world has, Put it or put on a bolt bolted on a silver recovery plant, so it turns out that they don't really care about the level of lead anymore, but they really are, they really do care about the amount of silver. The difference between running the two concentrate stream and the bulk concentrate stream on our price deck over the life of the mine was an additional $200 million so it made a huge, huge impact on the economics. The other thing by by going to a greater silver recovery and greater silver payability is that we now offer huge leverage to the silver price from a revenue perspective. On our numbers, 85 it's actually 87% of our revenue is from silver, prior to the optimization that was running just just above 70%. If we look at spot numbers today, it's about 92%. There's only one company that we can find that offers greater leverage to the silver price at the moment and that's AR Gold and silver with their with their projects in Morocco. Here's a, here's a production schedule, I mean this is really sort of high level in in that, you know, we we've we've we've mainly put the silver on here, we, we, I was asked by a couple of, Investors to include the lead and the silver just to just for sort of interest, but our 1st 10 years, you know, we're at 4.2 million ounces of silver, head grade of 83 g. We're always told, oh, this project will never work because the head grade is too low. Well, 83 g is not that low these days, and with a strip ratio of 1.4, 1.5 to 1, you know, the economics are quite compelling. What I do point out here is that that ramp up through to year 5 up to 5.5 million ounces, we then get a bit of a bit of a drop in the profile, which is which is grade related. There's a bit of a cutback as well. We believe that we at this point we have plenty of levers to pull to flatten that out and and we believe that you know, over the course of the next 12 months, we'll be able to show this slide again with a with a a production schedule that's. Essentially 5 million ounces a year out for, you know, 10+ years, and we'll go through a little bit of that now. What are those options? Well, you know, we have, we'll be building a brand new 2 million tons per annum plant invariably when you run those, when you've run a new plant for 1 to 2 years, you, you, you find out where the bottlenecks are. So you know, we think there's options to, to increase the throughput for the plant relatively early., generally, you know, bottlenecks in plants are around pumps and filters. The number I got from my GM was there's about $8 million worth of pumps and filters on this plant, so it wouldn't, it's not a lot to, to, to, to de-bottleneck that. The other aspect we've got is we've done 3 trial pits here about 18 months ago, which were all of that material was sent off for all sorting. Now unfortunately the low grade material didn't work and the high grade material didn't work. High grade not so worried about that because we'll process all of that anyway. But what was really interesting was that the medium grade, we saw mass rejection of 54% and grade uplift of 104%, with about 9% metal loss, but. There's a significant amount of volume that sits below and around the periphery of the of the mine reserve that we believe, you know, could could could come into an all sorting scenario. I would hate to think you need all sorting to make a project fly, and we don't need it. To see it coming in later down the track is a bit of a marginal improvement. I've got no problem with that, so we're we're, we're quite happy with that., the, the, the leverage we also provide to a higher silver price is demonstrated just by that third picture there, which is just shows the outline of the, of the current open pit design. Which is genuinely a very small footprint that was done on a whittle shell of 2750. Now to make sure that we're not sterilizing any of the any of the ore body with respect to placing infrastructure, we just ran that 2 times revenue factor, and that's the dotted yellow line. This pit becomes very big very quickly when you, when you start putting in higher prices and and. We bought this project off Kingsgate. They were originally looking at a 4 million ton per annum scenario. Now I'm not saying we're going to go to 4 million. But this is, this is just a discussion about how do we fill that hole in, in years 67 and 8, and I, and I think we've, we've got, we've got plenty of optionality to do that. In terms of the exploration around the mine itself, and, and also this plays in part to filling that filling that hole in years 67 and 8, we believe there is significant potential here to, to introduce a a a high or higher grade underground mine. These all these open pits are very shallow. The deepest there is about 180 m. We're seeing continuation of, of slightly narrower but high grade mineralization at depth, particularly to under the north west zone and the Aegean zone, and some of those grades are quite sort of Mexican-esque. We've not done the work on this yet, but, but we believe that, you know, one of the, one of the projects we'll be looking over the course of the next 12 months is to see whether we can bring in a 2000 to 300,000 ton per annum underground mine. In year 345, producing grades of 3 to 5 times the open pit and and and that that just goes straight down to the bottom line. So we're in the process right now of, of, of separating the company out into sort of silver mines corporates because we've bought some assets in North America, which we'll touch on in a minute, and then we, we, we're also setting up, you know, Bowden and silver as a, as an operating site. So all the exploration here will be, will be moved into the mine operating team and and and the mine geology team, so. That they're gonna have their hands full. I mean just to conclude on Bowden's, you know, it is the largest silver development in in Australia and, and, and one of the largest in the world, huge resources, exceptional leverage to a higher silver price, and, and we're, we're pretty bullish silver, even though we've only got $29. I was, I was told the other day that we should be using $100. I, I, I'm I'm not, I'm not getting enough to do that just yet. Low risk jurisdiction maybe some would counter, well, you lost your permit, so it's not that low risk. That was, that was a technicality in local planning law that is being resolved by the state government, and we believe we 100% believe that we'll have that back very shortly. So fundamentally, Bowden's is one of the most leveraged silver projects in the world, and one I think that will generate a lot of interest once we once we get the consent back. I'm just gonna very briefly touch on some exploration projects we acquired about 3 months ago. One of, one of my mandates when I came in was to try and build out the project pipeline for the company. we have 5 million acres of land in New South Wales, so with, with many targets, the problem we have in New South Wales is land access is getting very, very difficult, and we've got 3, currently got 3 projects that are undergoing, Mediation arbitration to get access. Now we have no doubt we'll get access to it, but it's how much does it cost you and how long does it take you? On the flip side, we believe we're going into, you know, feed and and detailed engineering in the first quarter of next year, with, with the intention of wanting to break first ground by the end of next year. So that gives us an 18 month period post commencement of construction, excuse me. Where we don't really have a lot of news flow, so the intention was to go out there and, and, you know, Michael, my, my general manager of Geology and I, we, we spent 18 months. Looking at 350 silver assets around the world, it came down to, you know, a a a a very small suite that weren't in Latin America or Central America, and we ended up buying two projects in California and everyone says, oh my God, California, you know, you must be crazy or is New South Wales not hard enough for you? well, look, these assets are in San Bernardino in California and you know our take on that is that yes it's in California and you know there are some NGOs and green groups that you're gonna have to deal with. But it's almost more like Nevada, and you know, we spent 2 weeks ago in California, dealing with all the stakeholders, you know, the supervisors of the 3rd and the 1st and the 3rd districts. The water board, the EPA, BLM, and, and it was like talking to regulators in Western Australia. I mean they are pro-business. One of the stats they told us is that that, you know, there are more mines in San Bernardino County than any other county in America, which, which is quite staggering. So anyway, what have we bought, we've bought a silver project and we bought a gold project. The silver is Calico North, it's all BLM land, there's been no exploration here for over 100 years. Historical high grade mining, I think it won more than 25 million ounces. we're adjacent to Apollo Silver, who have got 175 million ounces in their Waterloo and Langre projects. We're really excited by this. This is there's a bit of work to to work this up. We've got over 40 kilometers of strike extent of potential mineralized surfaces or or or zones of of alteration. so this is a, we start mapping in a few weeks, then we geophysics geochem and build it up over the next 12 months. So it's also got a lot of barri in it as well, which is a critical mineral, and we think that's going to help us on the permitting front. The second one was Kramer Hills. This is a gold project. We're really excited about this, even though it's gold, it's a 7 kilometer long shear zone with an old gold rush on it that was that was very unsuccessful because as all the reports suggested, the veins very quickly went into mic one gold, which is sort of 2 g dirt. this previously had 5 pits fully permitted for a heap bleach. They tried mining the first one, hit a load of clay, didn't work. That was in the 80s. Since then it's been owned by a prospector who unfortunately died about 18 months ago, so. Really exciting, a project's not been in anyone's hands, you know, recently, so we're we're we're we're looking forward and we, we, we aim to be drilling here in January. I think I've just hit my time. Bang on Joe, so we might leave it at that. Thank you very much for your update. Cheers.