Silver Storm Mining, Cashed Up, Ready to Rock & Roll!

Silver (“Ag“) is up +24% YTD. We’re in year five of a deficit in annual mined Ag. Among the top-6 Ag producing countries, three are; China! (#2), Russia!! & Bolivia. Mexico is by far the largest Ag producing country.

Given ongoing geopolitical events, including trade, cold & hot wars, to the extent possible N. American companies & investors will seek precious metals from N. America. The U.S. cannot rely on China or Russia for critical materials!

Silver Storm Mining (TSX-v: SVRS) / (OTC: SVRSF), with an enterprise value {market cap + debt – cash} of C$62M. (634M pf shares, $0.125/shr. on 6/5/25) has two exciting projects in central Mexico’s Durango State.

On May 6th, Silver Storm announced the proposed acquisition of Till Capital Corp., owner of 51.8% of Silver Predator Corp. [SPC] + two 1.0% NSRs on SPC properties.

Till had $6.2M in cash on 12/31/24, which goes to Silver Storm once the acquisition closes. In addition, CEO Greg McKenzie is raising an additional $10M in equity highlighted by further participation by Eric Sprott.

The fact that the Company upsized the private placement twice speaks volumes. Despite strong Ag/Au prices, most juniors are still finding it very difficult to raise capital.

Some might wonder why C$16M in equity was needed in the past month, plus a debt facility of up to ~C$24M in debt. Yes, it’s possible that CEO McKenzie is being overly conservative in building a margin for error.

However, excess cash can be applied to debt repayment, expanding operations, and/or developing the giant San Diego project, (more on that later). Once up and running, LP will be a cash-printing machine, but there’s restart risk and the possibility of delays.

A comfortable cash buffer will go a long way towards mitigating issues that arise, and avoiding problems with preemptive measures. Cash on hand could accelerate a move from the initial 3.0M Ag Eq., to 3.5M or 4.0M oz/yr.

As mentioned, Silver Storm holds 100% of two primary Ag projects. The past-producing La Parrilla (“LP“) mining complex sits on 38,128 contiguous hectares just 76 km SE of the Capital of Durango.

LP hosts five underground mines surrounding the mill plus the Quebradillas open pit. There’s an estimated 1M tonne stockpile grading 60-65 g/t Ag Eq., and a 2nd high-grade stockpile of 43,151 tonnes at 217 g/t Ag + 1.80% Pb & 1.84% Zn.

Ignoring Pb/Zn, that’s ~2.3M Ag-only ounces (before recoveries), worth ~C$112M at spot prices. Processing above ground stockpiles, possibly blended with newly mined ore, offers a fairly low risk restart scenario.

The State of Durango hosts two dozen mines, making it a mining-friendly jurisdiction. LP was acquired in 2023, and First Majestic remains Silver Storm’s largest shareholder at ~36% (Eric Sprott owns ~15%).

LP was continuously operated by First Majestic from 2005 to September, 2019. In the four years ended 9/30/19, the average Ag price was ~$17/oz. Ag is now double that $17 figure.

In February, management announced an excellent resource upgrade at LP to 27.0M Ag Eq. ounces (at spot prices). The average grade is ~264 g/t Ag Eq. (~2.75 g/t Au Eq.).

At $36/oz, the operating margin at LP could be $16/Ag Eq. oz = ~C$21.8/oz. Management, led by CEO Greg MacKenzie, plans for 3.0M Ag Eq. oz/yr, but First Majestic operated the complex at up to 4.67M oz/yr (in 2014 when Ag averaged ~$19/oz).

Three million Ag Eq. ounces x C$21.8/oz. margin = C$65.4M in cash flow, 3.5M/yr = $76.3M in cash flow, 4.0M/yr = $87.2M, 4.5M/yr = $98.1M, 5.0M/yr = $109M. Compare those cash flow figures for CY 2026 to the current enterprise value of C$62M.

Readers can haircut those figures to be more conservative. However, there’s a real chance the Ag price will surpass $40/oz in the next 6-12 months.

Bank of America sees a scenario where Au ends the year over $4,000/oz, and Ag north of $40/oz. Citigroup & Saxo Bank are calling for $40/oz in 1H 2026.

Importantly, 75.1% of the economics comes from Ag (70.6%) & Au (4.5%). In the following chart, notice that the peer avg. EV/2026e EBITDA ratio is 7.2x vs. 2.1x for Silver Storm.

LP is not back in production yet, so it deserves to be valued at a meaningful discount to producing projects. 

Silver Storm valued at 2.1x 2026e EBITDA vs. 7.2x producer average…

Yet, that 2.1x figure ascribes zero value to the 100%-owned San Diego project, an asset arguably worth $100M+. The valuable 27.0M Ag Eq. oz. endowment at LP should support 5 or 6 years of operations, and ongoing drilling should extend mine life.

LP’s resource includes blockbuster Ag Eq. intervals such as: [1,810 g/t over 14.6 m], [911 g/t over 13.1 m] & [689 g/t over 9.4 m]. This year’s Ag Eq. highlights include [618 g/t over 18.0 m] and [565 g/t over 7.2 m].

Silver Storm owns the large bulk tonnage, primary Ag, San Diego (“SD”) project, valued at C$110M at the end of 2020 as the sole asset of a predecessor company. Ag is +40% higher since then.

SD is one of Mexico’s largest undeveloped primary Ag assets not owned by a producer, making it both valuable & strategically important. It has 210.8M Ag Eq. ounces grading 112 g/t Ag Eq.

112 g/t Ag Eq. is a very good grade for a bulk tonnage mine scenario, it’s C$176/tonne rock. Compare that to S. American or western Canadian copper giants mining C$50-$60/t rock.

Discovery Silver’s giant Cordero & Bear Creek’s Corani projects are both ~50 g/t Ag Eq. Silver Mines Ltd.’s Bowdens, and Orla Mining’s Camino Rojo projects are ~80-85 g/t Ag Eq.

SGS Canada reported that the resource could possibly (with more drilling) be expanded by 20-50 Mt @ 100-150 g/t Aq Eq., (mid-point = ~140M ounces), from “existing structures + lateral & depth extensions.” 

If those ounces could be booked, that would place SD alone at ~350M Ag Eq. ounces, allowing for a 20-year mine life @ 15M oz/yr, which would be ~C$737M/yr in gross revenue (US$36 x 15M x 1.365 FX).

To be clear, that potential $737M in annual revenue is years away, it may be shared with a strategic partner, and we don’t know how much equity dilution might be needed to get there.

Still, assuming that LP is up & running at run-rate of at least 3.0M Ag Eq. oz next year, investors are getting SD for free — a tremendous option with Ag at $36/oz. Imagine the option value at $40, $50, $60…/oz.

Note: The ATH inflation-adj. price = $207/oz! For those who scoff at $207/oz as an outlier, consider that the entire year of 1980 averaged an inflation-adj. $88/oz, a time before wireless telecom/electronics, EVs, and rampant use of Ag-intensive solar panels.

In my view, if Silver Storm Mining can achieve a US$20/Ag Eq. oz operating cost at LP, that would put it in the middle of the global cost curve, and safe from having to shut down due to low Ag prices.

Once back in production it will be interesting to see how far and how fast Ag Eq. ounces can be ramped above 3.0M/yr. Could management get to 4.0M or 4.5M/yr in 2027?

Might LP grow to be larger than 5.0M oz/yr with additional capital investments into plant & equipment, plus further drilling successes expanding the resource runway?

One of the biggest risks facing juniors is close to being resolved. Subject to a debt facility this Summer, I’m presuming that funding for the LP restart is accounted for. Management believes it will be about 7-9 months to production after the debt facility is in place.

Securing the debt will be a significant de-risking event. Shares of Silver Storm have traded as high as C$0.18 in the past year vs. C$0.125 on 6/4/25. I see considerable upside potential.

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At the time this article was posted, Silver Storm Mining was an advertiser on [ER], and Peter Epstein owned shares in the Company bought in the open market.

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