GR Silver Mining (TSX-V:GRSL) Ltd has earned a ‘Buy’ rating and C$0.70 price target, an upside of seven times its current share price of C$0.10, from Red Cloud Securities analysts in their initial coverage of the stock.
In a note to clients, the analysts wrote that GR Silver’s 100%-owned flagship Plomosas silver project in Mexico hosts three past-producing mines and plenty of exploration targets with existing infrastructure facilities along 75 kilometres of a prospective trend in a prominent silver-producing region.
“With about 51 million ounces of silver and about 138,000 ounces of gold in indicated and inferred resources, we believe there is still plenty of exploration potential on the property, in both known resource areas and new mineralized areas,” they wrote.
“We speculate there is potential to expand resources to more than 114 million ounces of gold equivalent in the near term.”
The analysts highlighted the San Marcial area where step-out drilling resulted in the 2022 discovery of a new mineralized, high-grade area underneath the existing resource. Drilling results yielded bonanza grades of over 1,000 grams per tonne gold equivalent, they noted.
“Additionally, drilling has intersected the first occurrences of gold in this area, supporting the hypothesis that there could be a potential new gold discovery here, greatly increasing the value of the project,” they wrote.
“Our target [price] is based on a sum of parts valuation method for the Plomosas mine and San Marcial areas.”
The analysts noted the project’s upcoming mineral resource estimate as a key driver for a warranted re-rating of the stock. Further, they cited the release of the company’s 2023 strategic plan in the first half of the year as another upcoming catalyst.
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