The Yukon is host to some of the world’s highest-grade silver deposits, putting Canada’s westernmost territory in a prime position as demand for the metal with over 10,000 industrial uses – from microchips to microwaves – looks set to soar.
Silver North Resources (TSX-V:SNAG, OTCQB:TARSF) has already seen the future and is preparing for the ride.
Formerly Alianza Minerals, CEO Jason Weber said the company embarked on a major reorganization that culminated with its name change to focus on the potential of its under-explored high-grade Haldane silver project in the Keno Hill silver district in the central Yukon.
Apart from a diverse portfolio of assets that included copper and gold in projects stretching from British Columbia to Nevada, the failure of the Keno Hill silver mine under Alexco Resourc was also a detractor, Weber told Proactive.
Despite its location, a silver stream on Keno Hill’s production to Wheaton Precious Metals made the project unviable.
Hecla Mining Company (NYSE:HL)'s July 2022 acquisition of Alexco and subsequent repurchase of the stream arrangement looked set to revitalise the Keno Hill Mine – and the prospects for Silver North’s Haldane property, Weber said.
As the biggest silver producer in the US, he said Hecla knew how to address the issues facing Keno Hill.
“We felt pretty confident that in a year Hecla would be in a position where Keno would be ramping up towards full operation, and returning the mine back into a profitable operation, and we would have the project next door with all the potential to find the same silver deposits they are mining - essentially in a green fields scenario within a brownfields district,” Weber added.
On-the-ground experience
The last of the pieces to come together included the disposal of the company’s non-silver assets as it wanted to complete the transition from a project generator to a focused silver explorer and maximize the value of its projects in the Keno Hill district for shareholders.
“I've worked in the Yukon for most of my career, our vice president of exploration Rob Duncan did his master’s thesis on a project to the south and east of where we're working, so he's also spent a lot of time in the Yukon,” Weber said.
“We just felt that we had the operational expertise in the Yukon. Couple that with this great silver project and Silver North was born out of that.”
As well as the Haldane property, Silver North also owns the Tim property, a high-grade silver-lead-zinc property that is optioned out to Coeur Mining (NYSE:CDE).
The property is positioned about 19 kilometres northeast of Coeur’s Silvertip project making Coeur an ideal partner given its extensive knowledge of the area.
“The focus will be on these two projects, with Coeur funding all the work at the Tim property as we focus our exploration and our intellectual capital at Haldane,” Weber said.
“Tim is in Coeur’s backyard - they know those rocks really well; they've been really successful exploring and adding to the silver resource at Silvertips so it made perfect sense for them to operate that project.”
Improving fundamentals
Although silver has had its ups and downs, Weber believes sentiment is on its side. While it tends to track the gold price, which recently hit an all-time high, Weber said investors are just waking up to its many industrial uses.
“Almost anything we touch technologically uses silver and the more complicated, the more integrated it gets, the more silver it uses,” he said.
Apart from the “green push” for more electric vehicles (EVs) and hybrid electric vehicles, which use large amounts of the metal, its use in photovoltaics is also growing.
While still a fairly small part of overall silver demand, solar is forecast to make up 14% of silver consumption in 2023, up from around 5% in 2014, according to a report from industry association The Silver Institute. In 2022, silver’s use in photovoltaics increased to 140.3 million ounces.
“I remember when print photography was being phased out, everybody said it was going to kill the silver industrial market,” Weber recounted.
“Well, we're back to where we were on that is just with solar panel, silver demand. And never mind, 5G, technology and EVs.”
High-grade deposits will be the winners
With demand forecast to continue rising and a small cohort of primary silver producers and explorers, Weber said the focus is likely to fall on those sitting on high-grade deposits.
“That's where we get really excited about the silver market,” he said.
“There's so much room for the price to appreciate and the torque on the stocks that will be primary explorers and producers, I think is going to be tremendous.”
Haldane, he believes, is one of those deposits that make the grade.
Previous drilling on the project discovered high-grade silver mineralization including one hole which intersected 4.48 metres averaging 444 grams per tonne (g/t) silver, 0.15 g/t gold, 1.5% lead and 1.3% zinc, while another hole returned 3.14 metres averaging 1,351 g/t silver, 0.08 g/t gold, 2.43% lead and 2.91% zinc.
“The Keno district is one of the highest-grade silver districts in the world and that was the real appeal,” he said.
“In 2019, we made a discovery that proved we had the ability to host very high-grade mineralization - and over significant mining widths. So, you put those two together, and we think we actually have a really special project here in a district that's been in operation for 100 years and has produced over 200 million ounces of silver, yet we can do grassroots exploration, essentially, and find brand new veins.”
Bighorn and West Fault targets
While a 2022 drill program at Haldane identified a number of targets, Weber said Silver North’s immediate focus is on the two that show the most near-term potential: Bighorn and West Fault.
A fall 2023 drill program at those targets was postponed to the late spring/early summer of 2024 as the company embarked on a fundraising in a tough market and decided to wait for optimal weather conditions to get the most out of its investment.
“What we really want is a minimum of $2 million to start a programme up at Haldane and the reason is just that the bigger the program, the better efficiency you have,” Weber said.
“It costs money to set up and mobilise your crews and equipment. So, if you come in and drill three holes, it's way more expensive on a per metre basis than if you can drill 12 holes.”
Cautious approach
Silver North is taking a cautious approach to a 43-101 resource estimate for Haldane. With only nine holes drilled at the West Fault target, and a total of 28 drill holes across the project, Weber said there is at least another year of drilling ahead before the company can think about resource estimates.
Of the over 12 kilometres of potential cumulative vein strike to explore, the company has only explored less than 600 metres, cumulatively, amongst all its targets.
“When you look at something like West Fault, we're still in the process of finding these veins, these are very recent, new discoveries” he said.
“If you think of these veins like a big sheet, within that sheet you're looking for a wrinkle in it that's going to be thicker and higher grade - that's your ore shoot. We haven't found the direction that that ore shoot is going yet. We don't know how wide it is, how deep it might go, although we have an idea of how thick it can be.”
Still, he says the team has ideas and is planning to test for particular orientations of the high-grade shoots, combining its knowledge with what is known from the orientations at the neighboring Keno Hill mine, and is applying that to its targeting.
While a resource estimate is not likely to be published in 2025, Weber said the “smart investors” out there can form their own ideas and come up with their own estimates from Silver North’s data on how big a silver deposit could be.
“I think if we can continue to string together more high-grade silver intersections and West Fault and build on the discovery at Big Horn, that just puts us up the list for a buyout, option/JV or strategic partnership with silver producers and puts us in a strong position to benefit when that happens,” he said.
‘We think Haldane is a pretty special project in a pretty special part of the world."