Magma Silver, well placed in Peru for EPIC silver/gold bull market

Silver (“Ag“) is making a robust move in both absolute & relative terms, outperforming gold (“Au“) in the past month, sending the Au: Ag ratio to ~91:1 from a high of ~107:1 on April 21st, the day Au hit an ATH of $3,500/oz.

Over the next decade, Ag demand will experience significant growth, driven by industrial applications, particularly in green technologies like in solar panels, and also for investment purposes.

As some wonder when Ag will surpass $40/oz — it could be soon — pundits are already talking about $50/oz. When thinking about junior miners, it makes sense to take a longer-term view.

Bank of America forecasts Ag at $65–$75/oz by 2030, citing concerns over monetary debasement & accelerating industrial applications. Goldman Sachs sees $60–$70/oz, highlighting the material intensity of the green transition.

Bloomberg New Energy Finance suggests Ag could reach $70–$80/oz. McKinsey Global Institute sees $55–$65/oz by 2028.

Do those levels sound too high? They’re not! The ATH (adjusted for inflation) was in January 1980. In today’s dollars it’s ~$206/oz. Not only is $55-$80/oz reasonable, there’s a good chance Ag will be north of $100/oz by the late 2020s.

I asked six chatbots for the percentage odds of $100+/oz in 2030. The average response was ~32%. I think the odds are more like 50%, but even $50/oz would be great for most juniors.

Several investment firms & pundits predict Bitcoin will increase by 2x-4x in the coming years, (currently at $107K). Citigroup is calling for $285-$475K by 2030, which would be like Ag climbing to $95-$160/oz. Standard Chartered thinks it could hit reach $500k by 2028.

In the 20 years ended 2011, Ag increased at a CAGR of +23.1%, up +704%. Unlike Bitcoin, Ag has critical, mostly industrial, but also investment applications (see chart below).

The weighted average CAGR is +4.0%, or +3.5% if solar grows by +5% instead of +8%. Where will the Ag come from? Among the Top-10 Ag producing countries are China, Russia, Bolivia & Kazakhstan. Mexico & Peru will remain top Ag producers.

Without getting into the details of the ongoing bull case for Au, suffice it to say that central bank buying is expected to remain strong, or very strong, for years as global debt levels are out of control.

That, and safe-haven demand from geopolitical flashpoints including –> hot wars [Iran/Israel & Russia/Ukraine], cold wars, [U.S./China], [Pakistan/India], trade wars, [U.S./rest of world] and pending wars?? [China/Taiwan].

Magma Silver (TSX-v: MGMA) / (OTCQB: MAGMF) is in the right place at the right time with the right metals and the right team. It has an option to acquire 100% of the Niñobamba (+ Randypata & Jorimina) Ag/Au project spanning 8 km x 2 km in the mineral-rich Ayacucho region of Peru.

The Company is looking for one or two additional projects in Peru and/or Mexico and hopes to have further news on that front in the coming months.

Like many junior miners, Magma benefits from significant historical exploration work, including surface samples, trenching & drilling. Importantly, much of the work was done by highly reputable companies.

Drilling highlights include; [72.3 m of 1.2 g/t Au], [56.0 m of 1.0 g/t Au + 99 g/t Ag], [~200 g/t Ag Eq.], [21.0 m of 1.32 g/t Au + 102 g/t Ag], [~234 g/t Ag Eq.]. The Jorimina zone hosts a high-grade channel sample of 17.4 m of 3.06 g/t Au.

It would not require a large area of fairly high-grade Au to improve upon the average grade + prospective economics of a project, but there’s not enough evidence of high-grade Au mineralization to count on it, perhaps that will change.

The above image shows key members of the Board & Management team. These are high-calibre execs with a lot of experience, especially for a company with a market cap of C$7M ($0.20/share).

CEO/Exec. Chair Stephen Barley has over 40 years’ experience in corporate finance & securities law. He has held several executive & director roles with natural resource companies that had projects (some major ones) around the world.

Director Michael Townsend is one of the founding partners of Altus Capital Partners. He’s a Founder or co-Founder of several small-cap technology & resource companies. Both Barley & Townsend have considerable networks of peers & investment groups backing them.

Below are two advisors, also with decades of experience. Note that Jeff Reeder, P.Geo has over 21 years’ experience in Peru and has spent a lot of time in Mexico. Joe Sandberg has 45+ years under his P.Geo belt, and is an expert in precious metals & copper porphyry systems.

In 2011-12, Newmont completed an internal PEA, meaning that metallurgical work and other critical mine planning metrics passed an initial test of reasonableness.

I don’t have access to the indicative economics, but US$1,200/oz Au & $22/oz Ag were used. Op-ex & cap-ex are probably up +60% since then, but on average, Au & Ag are up twice as much (+120%).

A “Conceptual Exploration Model” for the Niñobamba project’s Main Zone was constructed using historical work completed by AngloGold Ashanti, Mine Gate Exploration S.A., Bear Creek Mining, and Newmont Corp.

Data was compiled from work completed between 2001 and 2013, including historical drilling, trenching, geological mapping & cross-sectional analysis. The team believes the exploration model is robust, providing critical insights on Niñobamba.

Silver on a nice run, is it headed to $40? $50/oz? next year?

Management said in a recent interview that the HISTORICAL, non NI 43-101 compliant resource work points to roughly 550,000 ounces Au + 47M ounces Ag (~98M Ag Eq. ounces).

At spot prices, that’s nearly C$5 billion of in-situ metal value (not including zinc, lead, molybdenum, copper). Yet, Magma Silver’s market cap is just C$7 million. To be clear, in-situ metal value is a commonly cited, albeit arm-waving metric.

Still, C$5B speaks to meaningful blue-sky potential, and management believes with more time, investment & drilling success, the resource size could possibly double.

In today’s dollars, Magma’s properties have seen ~C$20M in exploration. There’s evidence of a large-scale, shallow deposit, potentially amenable to open pit mining + high-margin, low technical risk, heap leach processing.

Permitting & drill programs are planned with a focus on expanding the deposit and completing a NI 43-101 compliant resource. Community consultation & environmental studies are complete for Jorimina. Drilling is expected as soon as next quarter.

Management will revisit Newmont’s considerable work and conduct infill drilling to establish a NI 43-101 compliant resource at Jorimina. Permitting for the Niñobamba North & South zones is in progress, with drill permits expected in Q4/25.

Unlike many projects in S. America, Niñobamba is readily accessible via road and supported by nearby regional infrastructure, including power & transportation links.

Management is proceeding at a measured pace to make sure that local communities are on board with exploration activities and are made aware of future activities.

Magma Silver (TSX-v: MGMA) / (OTCQB: MAGMF) has an exciting project, is looking for one or two more, is led by a strong team, and has a cheap valuation of just C$7M, in the midst of a remarkable Ag/Au bull market.

The Company has a tight capital structure. Although share count will grow, so far Magma has only 34M shares (there are 10M warrants at C$0.10). Drilling later this year could/should deliver impactful news.

Disclosures/disclaimers: The content of this article is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER] ) about Magma Silver, including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is not to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible under any circumstances for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market-making activities. [ER] is not directly employed by any company, group, organization, party, or person. The shares of Magma Silver are highly speculative, and not suitable for all investors. Readers understand and agree that investments in small-cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they will consult with their own licensed or registered financial advisors before making investment decisions.

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